Avocet Mining PLC Prospectus December 2011

Avocet Mining PLC
West African Projects
6.1.2 Royalties, Permits and Environmental Liabilities
Avocet Mining is committed to pay land taxes of amounting to US$10/km 2 /year for the first
term, US$15/km 2 /year for the second term and US$20/km 2 /year for the third term. These
are paid, in addition to renewal fees, at the time of renewal. There are no set minimum
expenditure rates for the permit, but the Government of Guinea does hold companies to the
expenditure set forth in the work plan that must be submitted every year.
Following completion of a feasibility study, the Government of Guinea has the right to a 15%
free‐carried interest in the operating joint venture company, with the right to acquire an
additional 20% for a consideration to be agreed. The government also charges a 5% royalty
on gold sales.
The whole of the surface of the Project area is owned by the local village. As part of the
Exploration Licence, WMG has preferential use of the surface but will have to pay
compensation to the village for crop disturbance and potential property take.
No official environmental studies have been completed to date as the project is currently in
an early phase of development.
6.2 Accessibility, Climate, Local Resources, Infrastructure and Physiography
The Koulékoun Project is located approximately 90km northeast of Kankan and access is
possible via the Kankan‐Mandiana road. It is an all season gravel road which is in poor
condition after years of limited maintenance. The Koulékoun project area is accessed via the
village of Loϊla along a 10km dirt track which is problematic in the wet season. The normal
route for personnel travelling to the site is a 5 to 6 hour drive, of approximately 350km, from
Avocet Mining’s regional office in Bamako, Mali to Kankan, crossing the international border
at Kouremale.
The Fié River is located at the eastern extent of the Project Area, flowing north into the Niger
River. The Boumaninko River is a small tributary of the Fié River, flowing eastwards, located
in the northern half of the Koulékoun permit. The Boumaninko River and its tributaries
generally lie within a wide, flat valley gently sloping eastwards.
The Koulékoun area lies between 430m and 480m above mean sea level. The topography of
the area is characterised by moderate elongated ridges lying above the floodplain of the Fié
River covered primarily with wooded savannah and areas of slash and burn agriculture.
Koulékoun is subject to northern hemisphere seasons with hot and humid; monsoonal‐type
rainy season between July to October with south‐westerly winds; dry season (November to
June) with north‐easterly hot and dry winds off the Sahara. Maximum temperatures in the
summer are typically experienced in May with temperatures often exceeding 36°C during
the day and minimum temperatures of 15°C in December nights. Annual rainfall is
approximately 1,700mm.
The Koulékoun project area is in a rural, under developed area of Western Africa with no
infrastructure. There are no local services available and only limited mobile telephone
coverage. The project is self‐sufficient in regard to water supply, electricity generation, and
satellite communications.
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