Company Information for Avocet Mining PLC

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Company Statement

Avocet Mining PLC is a gold mining company with assets in West Africa and South East Asia. It operates three gold mines – Inata, (Burkina Faso, West Africa), Penjom (Malaysia) and North Lanut (Indonesia). Avocet also has a pipeline of exciting exploration projects in both highly prospective regions and strong professional management teams in place at each of its business units.

Group Overview
Avocet is a gold mining company that was originally admitted to the Official List of the London Stock Exchange in 1996 and moved its listing to the Alternative Investment Market (AIM) - part of the London Stock Exchange, in July 2002. Following the takeover of Oslo-listed Wega Mining ASA in June 2009, a significant proportion of the Company’s shareholders are now based in Scandinavia. As a result, the Company has now listed on the Oslo Stock Exchange (ticker: AVM), and began trading in June 2010.

Avocet Mining is committed to becoming a leading gold mining and exploration company. The Company aims to be at least a 300,000 ounce per annum gold producer, with a portfolio of operations, which include long life mines and a broadly sustainable reserve base, all underpinned by a strong financial base and world class practices with regard to health and safety, people, community, the environment and operational performance criteria.

In late June 2009, Avocet completed the acquisition of Wega Mining ASA - an Oslo-listed gold development and exploration company. The acquisition of Wega brings Avocet majority ownership of the Inata gold project in northern Burkina Faso, West Africa. As of April 2010 is in commercial production at an annualised rate of 120,000 ounces per annum, following first gold pour on 20 December 2009. In the Wega-takeover, Avocet also acquired over 20 exploration licences in Burkina Faso, Guinea and Mali, including the Tri-K gold exploration project in Guinea, which has a NI 43-101 compliant gold Indicated Mineral Resource of 666,500 ounces.

Current Operations

Operations

Burkina Faso – Inata
In late June 2009, Avocet completed the recommended, share for share, acquisition of Wega Mining ASA (‘Wega’). The main asset of Wega is the 90% owned Inata gold mine (‘Inata’) in northern Burkina Faso.

As announced on 17 April 2010, gold production in Q1 2010 was 19,838 ounces, reflecting 228,830 ore tonnes milled at a grade of 2.8 g/t and recovery of 95%. As previously announced, gold production reached its target rate of over 10,000 ounces per month in May 2010. Plant throughputs are now approaching design capacity, with monthly equivalent throughput rates over the final 5 days of May above 95% of design capacity. Inata remains on track to produce over 100,000 ounces in 2010, and has now enabled the Group’s total gold production rate to rise to over 200,000 ounces per year. Mining is scheduled to accelerate from Q3 2010 with the ongoing expansion of the mining fleet. All gold will be sold at spot prices until Q3 2010.

Commercial production was brought forward from Q3 2010 to Q2 due to the successful commissioning and ramp up achieved to date. Accordingly, all revenue and costs for the March quarter have been capitalised and no unit cash cost was reported. From 1 April, all revenue and costs will be recognised in the income statement and unit cash costs will be reported from that date.

The current life of mine (‘LOM’) plan has determined an operation that will produce at least 120,000 ounces of gold annually over an initial 7 year mine life. Current NI 43-101-compliant Mineral Resources at Inata are 1,693,000 ounces of gold and the Ore Reserves at Inata stand at 932,000 ounces. It is anticipated that additional gold resources from the exploration licences surrounding the 26 km2 Inata mining permit will be defined in due course for incorporation into the Life of Mine plan. Now that the project is in production, Avocet has recommenced exploration activities on the prospective tenements that surround the Inata mill.

The gold mineralisation at Inata can be traced over a continuous 4 km strike length and occurs within silicified volcaniclastic rocks, porphyries and vein quartz that occur within a large shear zone. The 932,000 ounces of proven and probable reserves will be mined from three principal pit areas: Inata North, Central and South. Three smaller pits will be developed during the life of the project.

Indonesia – North Lanut
The North Lanut gold mine, located 150 km south-west of Manado, on the northern arm of the island of Sulawesi in Indonesia, was developed by Avocet from the exploration stage and has produced over 270,000 ounces since it was commissioned in 2004. Avocet purchased an 80% interest in PT Avocet Bolaang Mongondow ('PT ABM'), an Indonesian company holding a 6th generation Contract of Work (‘CoW’), from Newmont Mining Corporation in 2002. The North Lanut gold mine is located within the CoW, which includes exploration and mining rights over approximately 50,000 hectares in an area highly prospective for gold. An Indonesian company, PT Lebong Tandai, owns the remaining 20%.

Gold production commenced in October 2004 following a one year construction period. Gold is extracted by heap and dump leach techniques at a production rate of 1,200,000 to 1,400,000 tonnes per annum. This particular treatment process results in no tailings being discharged from the mine site. Site management are presently able to treat a combination of the oxide (which exhibits more favourable leaching characteristics) and transitional ore types (less amendable to leaching) to achieve an overall recovery of 66% Au in the 9 month period ended 31 December 2009. The fresh, unoxidised ore does not yield sufficiently high recoveries by heap leaching techniques at present, although testwork is being carried out on various processing options. Ore and waste is presently transported from the Riska and Rasik pits by articulated dump trucks, which allow the mine to operate in very wet weather. The mine employs approximately 400 people, approximately 80% of whom are from the local community.

Malaysia – Penjom
The Penjom gold mine is Malaysia’s largest gold producer and was developed by Avocet after applying modern technology to grass roots exploration in an area of historic alluvial mining. The mine is located in Pahang State, approximately 120 km north of the country’s capital, Kuala Lumpur. The mine was commissioned in December 1996 with reserves of 223,000 ounces. Successful resource development means Penjom has produced over one million ounces of gold to date and still has over 1.2 million ounces of resource. In the late 1990s, Avocet was able to overcome initial problems of carbonaceous ore at Penjom by developing unique processing systems, including complex gravity circuits and resin-in-leach ('RIL') technology. These processes have potential applications at other carbonaceous orebodies. In 2008 Penjom expanded its mining and plant capacity with plant throughput increasing from 570,000 to over 700,000 tonnes per annum to compensate for decreasing mined grades.

Production at Penjom has been between 60,000 and 100,000 ounces per annum for the last three years. The table below shows the recent operating statistics at Penjom. The Penjom deposit is geologically and metallurgically complex and contains coarse gold that gives a significant nugget effect; such factors all result in a significant degree of variability in gold production, with periods when the mine has considerably exceeded planned gold production and periods when it has underperformed expectations. In order to facilitate more reliable short and medium term planning, a major drilling programme of over 80,000 metres has recently been completed. In March 2010, following this drilling the Company released an updated Mineral Resource estimate for Penjom that increased resources to over 1.2 million ounces (an increase of over 47%). The current mine life is approximately four years, but this will be reviewed once the updated resource model has been incorporated into the existing life of mine plan.

Exploration

Burkina Faso
Avocet, through its 100%-owned local Burkinabe subsidiaries, holds eight exploration licences covering 1,660 km2 that are strategically positioned within the highly prospective Belahouro district, which surrounds the Inata gold mine in the northern Burkina Faso.

As announced in May 2010, the evaluation of projects in West Africa has identified several known gold mineralised systems in the 100 per cent Avocet-owned Bélahouro group of permits that cover an area of 1,660 km2 surrounding the Inata gold mine in northern Burkina Faso. These include the 16 km long Souma Trend, 12 km long Damba Trend and near-mine gold prospects at Pali, Filio and Inata North. This work has also identified significant areas of young Saharan sand cover that potentially conceals additional targets.

Avocet has contracted Geotech Airborne Limited to conduct a 9,100 km heliborne VTEM geophysical survey over the entire Bélahouro District. This is part of an initiative to map all prospective geological structures and develop an inventory of viable targets to guide exploration going forward. The survey commenced in April 2010 and should be completed by the end of June 2010, with interpretation being conducted during the wet season (July and August) and completed by September 2010. Results from near the Inata mine are yet to be fully analysed but are encouraging enough to indicate at this early stage that the mineralised gold bearing system that hosts the Inata deposit is likely to extend in a number of directions. If proven to be the case, this has the potential to significantly increase Inata’s resource and reserve base over time.

The Company has also contracted West African Drilling Services, a subsidiary of Layne Christensen Drilling, to conduct a 22,000 metre scout drilling programme at the Souma Trend. This will focus on the core gold mineralised prospect of Dynamite, south of Souma village, where previous RAB and RC drilling, conducted prior to Avocet’s entry in West Africa, returned up to 6 metres at 13.0 g/t Au from 87 metres depth and 30 metres at 3.06 g/t Au from 20 metres depth, respectively. Drilling will also target other mineralised vein zones within the Souma Trend where earlier RC drilling intersected up to 23 metres at 15.5 g/t Au from 16 metres depth. The scout drilling programme commenced in May 2010 and will be completed prior to the onset of the wet season in July 2010.

The above two initiatives will lead on to a more aggressive exploration programme in the second half of the year, with the objective of developing new open-pittable gold resources in the Inata area.

Guinea
Prior to takeover by Avocet, Wega Mining ASA was active in Guinea from 2005, through its local Guinean subsidiaries and principally through the advancement of the Koulékoun gold project which now has a 666,500 ounce gold 43-101 compliant Mineral Resource. A new discovery at the nearby Kodieran licence has yielded initial drill results which include: 43 metres at 3.23 g/t gold, 20 metres at 6.43 g/t gold and 60 metres at 2.01 g/t gold over a strike length of 300 metres of a 3.5 kilometre gold-in-soil anomaly.

Additional exploration licences and applications in Guinea are strategically located in the Mandiana and Siguiri Préfectures in the northeast of the country (see the map on right).

Many gold exploration companies have been attracted to Guinea over the past 10 years because of Guinea’s potential to host large gold deposits including Toronto listed Crew Gold and AngloGold Ashanti Limited - one of the world's largest gold producers.

Guinea is proving to be another exciting new destination in West Africa for gold companies, and Avocet has a number of high quality gold exploration projects in the northeast of the country. These include the 986 km2 Tri-K Block that hosts the Koulékoun and Kodiéran gold prospects, the 142 km2 Balandougou permit and the 130 km2 Kankan permit. Avocet owns 95% of the Koulékoun permit and 100% of all the other permits.

The Tri-K Block consists of eight permits, where soil sampling and geochemical surveying will be undertaken in Q2-Q3 of 2010. Drilling is planned to commence in Q4 2010.

Only two of twelve main gold anomalies in the six sampled permits have been drilled to date. Infill drilling over a small area at Koulékoun led to the estimation of Indicated Mineral Resources of 12.69 Mt @ 1.55 g/t Au and Inferred Mineral Resources of 0.72 Mt at 1.49 g/t Au (667,000 ounces gold in total above a 0.5 g/t Au cut off), while scout drilling at Kodiéran returned 20 metres at 6.43 g/t Au from 35 metres depth and 60 metres at 2.01 g/t Au from 72 metres. Mineralisation is hosted by metallurgically-clean feldspar porphyry intrusions at both prospects. The remaining ten geochemical gold anomalies are untested. Work in the second quarter will focus on mapping and pitting of these untested anomalies with a view to defining targets for a scout drilling programme in the second half of the year.

Bakan Project
The Bakan District contains a prospective, epithermal system located approximately 25 km west of the Company’s North Lanut gold mine on the same CoW. Drilling commenced at Bakan in 2005 and was completed in 2007. An internal pre-feasibility study completed shortly thereafter showed that the project was viable at a production rate of approximately 50,000 ounces per annum over a 4.5 year mine life and warranted a full feasibility study. Since then, delays to the permitting process have been encountered on account of areas of protected forest that overlap one of the two primary deposits. These permitting delays have meant that the start of construction is now likely to be pushed back to beyond 2010. The environmental impact assessment, known locally as an AMDAL, was approved in July 2007. The technical aspects of the project remain robust and the feasibility study remains close to completion, pending all permitting approvals. Meanwhile, limited cash resources are being spent on the project.

Malaysia
Exploration around the Penjom gold mine remains the Company’s priority in Malaysia, although there continues to be an active but low-key generative programme. The team has focused exploration efforts in the last year on infill drilling to upgrade the confidence in the resource and facilitate improved life of mine planning. Grass-roots exploration work has led us to a number of early stage targets in East Malaysia that the Company is pursuing.

Geographical Spread

Inata, (Burkina Faso, West Africa), Penjom (Malaysia) and North Lanut (Indonesia)

Board of Directors and Key Management

A M Norris	Executive Director
N G McNair Scott	Non-executive Chairman
Harald Arnet	Non-Executive Director
R A Pilkington	Non-Executive Director
M J Donoghue	Non-Executive Director
RP Edey	Non-Executive Director
JW Rourke	Non-Executive Director

Company Address 3rd Floor - 30 Haymarket London, United Kingdom SW1Y 4EX Telephone: (44) 207 766 7676 Facsimile: (44) 207 766 7699 Email: avocet[at]avocet.co.uk Website: http://www.avocet.co.uk

Capital Number of shares in issue 196,491,602 Number of shares in treasury nil Number of shares with voting rights 196,491,602

Year End 31 December

Nominated Brokers J.P. Morgan Cazenove 20 Moorgate London EC2R 6DA Ambrian Partners Limited Old Change House 128 Queen Victoria Street London EC4V 4BJ

Nominated Advisors Ambrian Partners Limited Old Change House 128 Queen Victoria Street London EC4V 4BJ

Major Shareholders

Elliott Associates	16.3%
Datum A.S.	12.5%
J.P. Morgan	5.3%
BlackRock	5.1%
Management	3.5%
Invesco	3.2%

Related News

06/07/10 - Avocet Remains Committed To Asia, For Now, But The Real Production Growth Will Come From The West African Gold Operations
17/03/10 - The Balance Of Avocet Mining’s Business Is Gradually Tipping Westwards
02/03/10 - Avocet Mining Looks All Set To Become Aim’s Biggest Gold Producer By The Middle Of This Year
17/11/09 - Avocet Mining Heads Tentatively Towards Production Of Over 200,000 Ounces Of Gold Per Year
15/04/09 - Avocet Mining Buys West Africa Specialist Wega Gold To Take Production Up Towards 300,000 Ounces Of Gold Per Year

Most Recent Statement

10/08/10 - Positive Gold Grades In Drilling
28/07/10 - Interim Results
09/07/10 - Directorate Change
05/07/10 - Hounde Definitive Agreement
16/06/10 - AGM Presentation and Corporate Update
10/06/10 - Statement re Press Speculation