The Inata Gold Mine – taking the next steps 19 th May 2010
Overview of Avocet Mining (West Africa) Gold mining company, active in 2 Belahouro INATA highly prospective districts (1.7 Moz) •West Africa •South East Asia •Group Reserves and Resources of 1.5 Moz and 5.6 Moz respectively Koulékoun Excellent growth profile (0.7 Moz) •2009 production: 109,000 oz West African ounce figures are 43-101-compliant Mineral •2010 target production: +200,000 oz Resource figures, 100% basis. See appendices for details •2011 target production: +240,000 oz (South East Asia) PENJOM NORTH (1.2 Moz) LANUT West Africa – new mine on schedule & Bakan to double Group’s production in 2010 (1.0 Moz) •Inata (Burkina Faso) South East Asia – 2 operating mines Seruyung Doup (1.0 Moz) •Penjom (Malaysia) •North Lanut (Indonesia) South East Asian ounce figures are JORC-compliant Mineral Resource figures, 100% basis. See appendices for details 2
Q1 results and 2010 objectives Inata, Production in West African exploration Burkina Faso South East Asia Geophysical and VTEM Gold production of Gold production of survey to define priority 19,838 oz in Q1 2010 targets at Bélahouro 25,039 oz in Q1 2010 underway Production target of 10,000 oz in May ‘10 Cash costs of Drilling commenced on US$735/oz in Q1 2010 Souma Trend Production after May ‘10 to exceed 10,000 oz per month Monthly production of Drilling to commence at 8,500 oz in Q2 2010, Substantial upside along key prospects in Guinea increasing to 9,500 oz in strike – initial drill results in Q4 2010 H2 2010 expected in Q3 2010 3
Financial summary Project finance Corporate Cash position Gold hedge facility facility • Cash at bank • 400,000 oz at an • US$25m corporate • US$65m project US$47.1m 1 finance facility with average US$970/oz, revolving credit required by project facility with Standard Macquarie Bank finance facility (Inata Chartered Bank • Net debt US$42.9m 1 production only) • First repayment by September ‘10 • Unhedged production until first delivery in Q3 2010 • c.20% Group production in 2010 • c.40% Group production in 2011 4 1 As of 31 December ‘09
Oslo listing – on schedule April • Resolution of outstanding technical requirements and due diligence April • Introduction meeting with the Oslo Stock Exchange and final application submitted Late May • Completion and approval of listing prospectus • Approval of listing application at the Oslo Stock Exchange board meeting, and public advertisement Early / Mid June • First day of listing in Oslo 5
Strategy “Avocet Mining is committed to becoming a leading gold mining and exploration company” +300,000 oz p.a. and growing +5 M oz reserves Junior gold Mid-tier gold producers producers +10 year mine lives Avocet Mining ....... Cash costs <$600/oz Avocet’s medium-term strategy is to build a portfolio of gold mines producing in excess of 300,000 oz p.a. 6
The Inata Gold Mine 7
Gold Mining in Burkina Faso • 2003 mining code o Provides stability o Demonstrates govt. support for mining Essakane (IAMGOLD) Inata (Avocet) • Rapidly expanding mining sector Taparko (High River) o Only 1 gold mine Kalsaka (Cluff) operating in 2007 o 6 gold mines to be operational by end 2010 Mana (SEMAFO) o Mines to produce over 500,000 ounces in 2010 Youga (Etruscan) • Over 20 listed gold producers and explorers Prospective Birimian geology operating in country Gold deposit / resource Producing gold mine in 2010 8
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 9
Wega transaction • Offer for all outstanding shares in Wega declared wholly unconditional on 17 June ‘09 and settled on 24 June ‘09 o 97% acceptances received from Wega shareholders o Takeover completed in 70 days o Issued 72.6 million Avocet shares, representing 37.3% of the enlarged company o Overall transaction value: US$109 million (plus assumed debt) o Gold price at time of settlement: US$931/oz • Acquired: o Inata Gold Mine and surrounding exploration licences (Bélahouro) o Houndé group of licences Divestment announced January ‘10 Present transaction value: c.US$6.5 million o Guinean exploration licences o 58.1% stake in TSX-listed Merit Mining Divestment announced in November ’09 Present transaction value: c.US$5.5 million o 36% stake in privately-owned Metallica Mining 10
Inata management team Interim Chief Chief Executive Executive Officer Officer (from 1 June ‘10) Jonathan Henry Brett Richards Executive Vice President, Operations West Africa Richard Gray Directeur General – General Manager, General Manager, Operations – Inata Administration Gold Mine (West Africa) Colin Belshaw Saidou Ide 11
Inata management team General Manager, Operations – Inata Colin Belshaw Safety Deputy GM Environment General Mining Maintenance and Security Technical and and Services Finance Manager Manager Training Manager Services Processing Community Manager Manager Manager Michel Frans Daniel Kell Manager Manager Sharon Guy Riopel Labbe Gonsalves Terry Gagnon Monro Bob Voisey Nick Shirley Kell Wilhelm 12
Inata – on track to produce +100,000 oz p.a. • 19,838 oz produced in initial 3 months o First gold pour 20 December ‘09 o Gold production of 9,166 oz in April ‘10 o Project remains ahead of schedule o Production of +10,000 oz beyond May ‘10 o Gold to be sold at spot prices until Q3 • Steady ramp up continues on schedule AVM Ownership 90% o Plant recoveries currently >93% Burkina o Commercial production moved forward from Location Faso Q3 to 1 April 2010 Reserves (oz) 1 932,400 • Set to produce over 100,000 oz in 2010 Resources (oz) 1 1,693,200 2010 c. 100,000 • Final construction cost: US$195m Production (oz) 2011 c. 140,000 Cash costs ($/oz) LoM 525-575 Estimated Mine Life (years) 7+ 1 NI 43-101-compliant Reserves and Resources as of 31 December 2009. 13
Inata – ramp up • Recoveries budgeted to increase to 90-95% over ramp up period; actual recoveries to date over 93% • Extensive rectification work carried out by Avocet since June ‘09 takeover of Wega Mining • LoM mine grade estimate is 2.07 g/t • Mined tonnages reconciling well with resource model 14
Project geology, mineralisation and ore • Deposit hosted in Birimian greenstone belt o Birimian (2.1-2.2 Ga) volcano-sedimentary series o Gold mineralisation at Inata is commonly associated with mesothermal stockwork and sheeted quartz–sulphide veining • Extensive weathering and lateritisation of the mineralisation and surrounding host rocks, resulting in oxide mineralisation up to 100 m depth • Recoveries seen during production have corroborated pre-production testwork, which indicated recoveries of 90-95% Au • The Bond work index determination showed the oxide ore to be soft to moderately soft (Wi of 6-10.5 kWh/t), increasing to 15.0 kWh/t for sulphide ore 15
Inata orebody – broad zone of mineralisation W E • Simple structure at deposit scale • Broad spacing of drill holes at depth • Peripheral holes contain significant mineralisation o 41m @ 7.12 g/t Au (INDD0040) • Kriged model smoothes grades o Better grade definition in data o Will be able to mine higher grades • High confidence in deposit model 0.3 – 0.7 g/t Au o Reflected in reconciliation to date 0.7 – 2.0 g/t Au 2.0 – 5.0 g/t Au > 5.0 g/t Au 50m 16
Resource model reconciliation • Mined grades reconciling well with resource model • RC drilling and rip-line surveying methods used to test in pit mine grade 17
Plant to mine reconciliation PLANT FEED DATA RECONCILIATION • ROM pad feed grade and Mining Values Plant Values Months Tonnes Grade Ounces Tonnes Grade Ounces tonnage reconciles well Dec-09 62,000 2.6 5,000 62,000 2.3 5,000 with plant actual Jan-10 75,000 2.5 6,000 75,000 2.6 6,000 Feb-10 77,000 2.5 6,000 77,000 2.9 7,000 • Slight increase in grade Mar-10 61,000 2.8 6,000 56,000 2.9 5,000 Apr-10 70,000 2.8 6,000 74,000 2.9 7,000 and ounces but too early to Total 345,000 2.6 29,000 344,000 2.7 30,000 determine significance 18
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