The Inata Gold Mine 1
Inata management team General Manager Inata Gold Mine Colin Belshaw Environment Safety and Maintenance Deputy GM Mining Security General Finance Technical and Training Geology Manager and Projects Manager Manager Services Manager Services Community Manager Manager Manager Manager Frans Michel Daniel Manager Guy Riopel Kell Monro Terry Alex Hagan Bob Voisey Labbe Gonsalves Gagnon Sharon Kell Nick Shirley Wilhelm 2
Chronology of Inata Project 1998 – 2004 BHP - Resolute Ltd Joint Venture Metres drilled: 49,000m Joint venture with BHP (1998-2001) Resolute sole operator until 2004 Resolute outlined 750,000 oz resource 2004 – 2007 Goldbelt Resources Ltd 69,000m Acquired properties in January 2004 for Outlined reserves and resources of TSX-V listed cash and shares worth US$6.5 million 0.944 Moz and 1.7 Moz respectively 2007-2009 Wega Mining ASA No drilling at Inata Entered US$65 million project finance facility agreement with Acquired Goldbelt Resources in 2007 for C$130 million in cash MBL 2009 – present Avocet Mining PLC Step-out drilling commenced April 2009 announced takeover of Wega First gold pour in December 2009 and June 2009 acquisition completed in all-share deal commercial completion by March 2010 3
Inata 2010 – A very successful year! • 91,524 oz poured in initial 9 months o First gold produced December ’09 – 152oz o Production (poured) of 40,461oz Q3 ‘10 o Gold now sold at hedge and spot prices • Ramp up to name plate thru’put (285tph) achieved Sept 2010 (and showing potential for greater capacity) AVM Ownership 90% o Plant recoveries currently >93% Burkina Location Faso o Commercial production planned for by Q3 Reserves (oz) 1 1,081,500 2010. Actually achieved from 1 st April 2010 Resources (oz) 2 1,310,700 • Set to produce over 120,000 oz in 2010 2010 c. 120,000 Production (oz pa) LoM c. 165,000 Cash costs ($/oz) LoM 525-575 Plant feed grade (g/t) LoM 2.12 Estimated Mine Life (years) 7+ 1 NI 43-101-compliant Reserves as of 31 August 2010 2 NI 43-101-compliant Resources as of 30 June 2010 4
Inata – progress and YTD performance • Extensive rectification work by Avocet post June ‘09 acquisition of Wega Mining – ore to mills 28 th November 2009 • De-bottlenecking completed October 2010 • Recoveries as planned at 93%+ • YTD feed grade of 2.65gpt • Mined tonnages reconciling well with BFS resource model 5
2010 – Other achievements and milestones • Successful Inauguration by the Prime Minister, His Excellency Mr Tertius Zongo • Increased Resources and Reserves • Set up Geology and Exploration facilities on site – teams working closely with each other • Improved Chart of Accounts and management accounting • Completed numerous infrastructure projects incl. Gendarmerie 6
Inata North Pit 7
Geological Settings and Prospectivity • Deposit hosted in Birimian greenstone belt of volcano- Avocet Mining sedimentary series INATA 1.8 Moz Au • Folded metasediments and ovoid granites intrusives • Gold mineralisation commonly associated with quartz – sulphide veining along sheared zones and contacts of volcanic intrusives VTEM Map Of Inata Prospect 8
Ore Deposit – Mineralization Style N • Generally NE trending fold axial plane structures • Extensive weathering and lateritisation of the mineralisation and surrounding host rocks, resulting in oxide mineralisation up to 100 m depth • Mineralization associated and\or in close proximity to the graphitic shales, quartz veins and sulphides • Simple structural domain at deposit scale s 9
Reserve Potential • Mineralization open both along strike and at depth • Grade improves with depth • Good correlation between Resource Model and Grade Control Model 0.3 – 0.7 g/t Au 0.7 – 2.0 g/t Au > 2.0 g/t Au • Revision of Grade Control Processes Ongoing INATA NORTH _SECTION 1588475N
Grade Control Processes A plan view of 285mRL showing mining outlines from the GC model A section along 1588392N showing the GC model with the GC RC drill holes • Robust, wide and continuous ore body being delineated from the Grade Control modelling. • Mining outlines wide and well defined
Reconciliation - GC and Resource Model • Revision of GRADE CONTROL RESOURCE MODEL-NEW INATA NORTH Grade Control RL Tonnes Grade Ounces Tonnes Grade Ounces Processes TOTAL INSITU ORE Ongoing 285-282,5 63,049 3.35 6,786 63,074 2.88 5,841 282,5-280 63,693 3.17 6,502 63,514 2.85 5,830 • Good 280-277,5 63,693 3.06 6,269 62,124 2.96 5,917 reconciliation 277,5-275 63,322 3.01 6,121 61,967 2.95 5,885 275-272,5 59,117 3.01 5,722 56,472 3.03 5,510 between GC 272,5-270 57,902 2.87 5,348 56,429 3.03 5,502 Model Mined and GRAND TOTAL 370,776 3.08 36,748 363,580 2.95 34,485 Resource Model ORE GRADE PROPORTIONS MARGINAL ORE 11% 16% 2% 5% 19% 1% • Positive LOW GRADE ORE 32% 43% 14% 29% 44% 13% reconciliation HIGH GRADE ORE 58% 147% 85% 66% 131% 86% being observed VARIANCE 2% 4% 7%
Reconciliation Resource, Mine Production vs Processing • Good reconciliation between Mined and Resource Model • Good reconciliation between Mining and Processing head grade and Ounces 13
2011 – Inata Processing Plant 14
Inata - increasing production capacity • Forecast gold production for Inata life of mine increased to 165,000 ounces p.a. from 120,000 ounces p.a.: • Capital required: US$25 million o Mining equipment: US$15 million o 1 x PC2000 excavator o 5 x 777F dump trucks o 1x 988H wheel loader o 1 x D9R dozer o 1 x L8 blast hole rig o Plant upgrade: US$10 million o 2 nd elution circuit and electro-winning cells o Upgrade CIL inter-tank screens and piping o Upgrade lime supply system o Expand gold room o Extra raw water and process water pumps o Dust collection systems – crusher and reclaim o CIL tanks oxygen supply system 15
The 3 rd Mine Fleet A Third Mine Fleet of value US$15M is required for the following reasons, both of which represent opportunities created by successful resource development and plant expansion: • Exploit the new Inata Resource Model completed August 2010 − 235,000 oz additional Ore Reserve announced September − Evaluation of economic pits completed, new designed pits − Ore Reserve increased as a result, 25% increase to 1.08M oz − LOM waste to ore strip ratio increased from 7:1 to 9:1 as a result of deeper pits • Enable the expansion of existing Inata plant − Increase from 285t/hr to 340t/hr − Reduce % of annual production that is hedged from ~70% to 55% − Increase spot price exposure at time of increased gold prices 16
Expanding the plant • Planning for expansion of processing capacity has been progressing since July • Processing plant reached nameplate capacity of 285 tph in August as planned and has run steadily since • Expanding capacity by fully utilising installed milling capacity and further debottlenecking to reach target of 340 tph by July 2011 17
Increasing mining capacity 18
Mining equipment • Existing mining fleet: • Ordered 3 rd mining fleet: − − Excavator: 1 x PC2000 Excavator: 1 x PC2000 − 2 x PC1250 Dump Trucks: 5 x 777F − − Production Loader:1 x WA 800H ROM Loader: 1 x 988H − − ROM Loader: 1 x 988H Dozer: 1 x D9R − − Dump Trucks: 6x 777F Blast hole drill rig: Atlas Copco L8 6 x HD785-7 − Track Dozer: 1 x D9R 1 x 375A − Wheel Dozer: 1 x 834H − Grader: 1 x 16M 1 x GD825A − Water Truck: 2 x HD475-7 − Blast Hole Drill Rig: Atlas Copco L8 − RC Drill Rig: Atlas Copco L8 19
Life of mine plan • Current life of mine plan outlines the following: o 7 year initial mine life, subject to ore body extensions and/or additional greenfields discoveries o Overall strip ratio of 9.4 (rising from 6.5 in 2010 to 12.7 in 2011/2012, declining thereafter) o Expanded plant capacity of 2.7 Mt p.a. o LoM plant feed grade of 2.12 g/t o Budgeted recoveries of 90-95%; currently >93% 20
Mining schedule • Optimisation of pit designs and LOM schedule • Schedule focuses initially on higher grade Inata North Inata North pit Sayouba • Mining fleet performing as budgeted • Mining in 2.5 m flitches to reduce dilution • Currently achieving 920k BCM per month • Production to increase to 1.3M BCM per Inata Central month with arrival of 3 rd fleet Q3 2011 • Large stockpile of ore maintained on ROM o Stockpile of 500,000 tonnes at +2.05 g/t (as of 30 November ‘10) Inata South • Mining from Inata North and Central Starter Pits 21
Mining challenges and opportunities • Operator training o Mining is new to Burkina Faso o Lack of skilled operators • Optimise drill and blast operations • Minimising dilution and ore loss • Resource model performing well • Diesel consumption per tonne and tyre wear lower than expected 22
Plant key components • 7 x 1.8 MW (de-rated) Generators • 1 x 110 kW Primary Crusher • 1 x SAG Mill • 2 x Ball Mills • 1 x Cyclo-Pac (20 cyclones) • 6 x 1980 m 3 CIL Tanks • 1 x Falcon Concentrator o Installation progressing 23
Process flow chart 24
Gomde barrage • Capacity of 120 Mm 3 • Current monthly usage of 0.3 Mm 3 o Evaporation in dry season accounts for 5.2 Mm 3 per month 25
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