Avocet targets resource upgrades
16-MAY-2008 Intellasia | Investegate
May 16, 2008 - 7:00:00 AM
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Avocet Mining PLC ('Avocet' or 'the Company') announces revised gold resource and reserve estimates for the Company's wholly owned Penjom gold mine in Malaysia. The Co has now added nearly one million ounces of gold resources and close to 600,000 ounces of gold reserves at Penjom since 2002.
Resources Recent geological modelling and grade estimation have resulted in total JORC classified Measured, Indicated and Inferred Resources of 9.41 million tonnes with a grade of 3.16 g/t Au, above the economic cut-off of 0.8 g/t Au used at the mine, for a total resource of 954,900 ounces including stockpiles. This includes Inferred Resources of 3.16 million tonnes grading 3.35 g/t Au and containing 339,700 ounces of gold. The new resources, which are reported below the 31 January 2008 topographic surface, represent an addition of 47,400 ounces.
The new resource follows the completion of 182 reverse circulation and diamond drill holes (27,160 metres) to the end of November 2007. This drilling has focused on infill holes to ensure a high degree of confidence in the resource model at depth. The addition of 47,400 ounces to resources before depletion since 31 March 2007 reflects the Company's focus on this infill drilling. A programme of step out drilling will recommence this year, assisted by a new larger drill rig, capable of drilling to greater depth and extending the resource further. This rig is expected to be commissioned on site in May.
In addition, a further rig is soon to be ordered, these two new drills will allow the operation to carry out a major deep-drilling programme to investigate the potential for a larger open pit and a focused underground operation.
The Co has continued infill drilling in key areas since November 2007. The reverse circulation drill rig has completed 80 holes (12,350 metres) to the end of February 2008. These holes have returned several significant intercepts that are typically higher grade than the current resource model indicates. This is expected to translate into production upside in the coming years. Table 1 at the end of this announcement summarises the better intercepts, which include 4m @ 62.3 g/t Au, 8m @ 21.5 g/t Au, 4m @ 42.4 g/t Au, 7m @ 22.8 g/t Au, 4m @ 33.3 g/t Au and 2m @ 50.6 g/t Au at Kalampong, as well as 5m @ 25.0 g/t Au and 3m @ 19.4 g/t Au at Manik-Janik. All intercepts are reported using a top cut of 100 g/t Au. Many of the more significant intercepts include assays above 100 g/t Au with a highest grade of 1m @ 707 g/t Au in Kalampong.
The resource has mainly grown in the area of the west wall of the Kalampong pit where the grades are lower than the deposit average, but the mineralisation is closer to surface and requires a lower amount of waste stripping.
The revised Proven and Probable Reserves at Penjom are 3.77 million tonnes grading 3.27 g/t Au (396,600 ounces of gold). The open pit design includes 0.65 million tonnes containing 77,900 ounces of gold (3.73 g/t Au average grade) of Inferred Resources, making a total Life of Mine forecast (including stockpiles) of 4.42 million tonnes grading 3.34 g/t Au and containing 474,500 ounces of gold. The table below summarises the Life of Mine plan as at the end of January 2008.
The new Proven and Probable Reserves incorporate pit design changes based on a US$700/oz gold price and higher consumable costs than last year. The most significant changes in the Life of Mine plan are in the Inferred Resources contained within the new designed pit. Escalated drilling in 2008 will target resource expansions that the Co is targeting to translate into increased reserves during 2009.
Jonathan Henry, Chief Executive Officer, commented: 'Since Avocet built the Penjom mine in 1996 it has produced over one million ounces of gold, compared with an original five year mine life of 223,000 ounces of gold. The drilling campaign last year indicates that Penjom has at least another five years of production to come at current production rates, with some very encouraging intercepts from the last phase of drilling. We look forward to bringing new drilling capacity to site which should allow for further resource expansion and a better understanding of the long-term future at Penjom, particularly with the potential of underground mining in the short to medium term as well as maintaining production from the highly successful open pit operations.'
Avocet is a mining company listed on the AIM market of the London Stock Exchange (Ticker: AVM). The Company's principal activities are gold mining and exploration in Malaysia (as 100% owner of the Penjom mine, the country's largest gold producer), and Indonesia (as 80% owner of the North Lanut gold mine and Bakan project in North Sulawesi). The Co has a number of other advanced mining and exploration projects in South East Asia.
All references to resources and exploration results have been approved for release by Peter Flindell, BSc (Hons) MAusIMM, Chief Geologist for Avocet, who has more than 20 years experience in the field of activity concerned and is a Competent Person as defined by the JORC Code (2004). He has consented to the inclusion of the material in the form and context in which it appears. All references to reserves have been approved for release by Eric Vesel, BSc (Hons) MAusIMM, Chief Operating Officer for Avocet, who has more than 20 years experience in the field of activity concerned and is a Competent Person as defined by the JORC Code (2004). He has consented to the inclusion of the material in the form and context in which it appears. All resources and reserves referred to above are classified according to the definitions outlined in the JORC Code of 2004 (Australasian Joint Ore Reserves Committee).
Table 1: Significant drillhole intercepts at Penjom, Malaysia Hole East North RL Azimuth Dip Depth From To Interval Grade Comments ID (m) (m) (m) (o) (o) (o) (m) (m) (m) (g/t Au) KEP639 29321.9 50307.0 887.6 90 -75 210 190 192 2 10.4 incl 1m @ 20.1 g/t Au from 190m 194 197 3 7.15 incl 1m @ 14.6 g/t Au from 195m KEP641 29302.6 50342.4 883.3 90 -70 180 113 116 3 3.81144 147 3 5.16
Note:
Individual gold assays have a top cut of 100 g/t Au and a lower cut of 0.8 g/t
Au for intercept calculations.
Maximum interval waste allowed is 0.5m and minimum mineralised interval is 0.5m.
All holes are drilled from surface using conventional reverse circulation
drilling techniques.
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