Avocet Mining PLC Prospectus December 2011

c105718pu020 Proof 5: 7.12.11_13:36 B/L Revision:
broadly similar to 2011. Higher stripping and mobile maintenance throughout 2012 means that cash
costs are expected to rise compared with 2011, although this will depend on key commodity prices
that affect input costs (such as fuel, steel, cyanide, and gold prices, which determine royalty levels).
11. History of Avocet Mining
(a) Key events in the history of Avocet Mining
1995
Avocet Mining was incorporated in England and Wales.
1996
In 1996, the Company was admitted to the Official List and to trading on the Main Market of the
London Stock Exchange. At that time, the Company’s strategy was to build a focused and profitable
mining business based on developing gold deposits in Malaysia and Peru, as well as its tungsten
interests in Portugal, Peru, and California. In the same year the Company commenced production of
gold at Penjom in Malaysia.
1998
In 1998, the Company installed at Penjom a new proprietary process using resin-in-leach which
resulted in increased recoveries.
1999 to 2002
Between 1999 and 2002, the Company decided to divest its tungsten operations in order to focus on
gold mining and exploration. In 2002 Avocet Mining cancelled its listing and was quoted on AIM,
and in the same year acquired an 80 per cent interest in the North Lanut contract of work in North
Sulawesi, Indonesia and a 49 per cent interest and management control in ZGC in Tajikistan.
2003
In 2003, Avocet Mining completed a bankable feasibility study for a mine at North Lanut, Indonesia,
raised US$15.5 million through a share placement and commenced the development of a new mine in
Indonesia. Gold production in the North Lanut mine commenced in 2004, becoming Avocet Mining’s
third operating mine.
2004 to 2005
Between 2004 and 2005, the Company reached an agreement with the government of Tajikistan to
increase ownership of ZGC to 75 per cent and subsequently commenced dump leach production.
2007
Throughout 2007, Avocet Mining expanded its Indonesian operations in South East Asia through
achieving high grades at North Lanut, acquiring a majority interest in Banda Properties and
upgrading its Mineral Resource at North Lanut. The Company also restructured its Malaysian
exploration assets and acquired a 19 per cent interest in TSX Venture Exchange listed Monument
Mining Limited. In July 2007 the Company announced the completion of the disposal of ZGC to a
subsidiary of Zijin Mining.
2008
During 2008, Avocet Mining added to its exploration portfolio and agreed to acquire the Seruyung
project in Kalimantan, Indonesia. The Company also experienced continued drilling success at Penjom
with an upgraded Mineral Resource, and at North Lanut which indicated a potential significant
Mineral Resource increase. In August and September 2008, the Company eliminated a historic gold
collar position for a total cost of US$20.8 million, leaving all production exposed to spot prices
(b) Acquisition of Wega Mining in 2009
Overview
In 2009, Avocet Mining acquired Wega Mining, a Norwegian listed mining company focused on
exploring, developing and operating gold deposits. Wega Mining was incorporated in March 2006 and
its shares were traded on the Oslo Axess list of the OSE (ticker WEMI).
Wega Mining’s main asset was Inata in Burkina Faso, West Africa, which was under construction at
the time of the acquisition. Wega Mining also had exploration prospects in Guinea and Mali. Wega
Mining held a total of 27 exploration licences and one mining licence in West Africa. In addition,
Wega Mining owned 58 per cent of Merit Mining, a Canadian junior mining company listed on the
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