Avocet Mining PLC Prospectus December 2011

c105718pu030 Proof 5: 7.12.11_13:38 B/L Revision:
the financial markets, increased risk aversion, inflation concerns due to quantative easing programmes,
the weakening of the US Dollar and fear of global recession. Since the beginning of 2008 the US
Dollar has lost approximately 50 per cent of its value relative to gold.
The change in attitude to commodities in general has also contributed to gold’s rising price. The
development of the gold ETFs has helped to broaden the access to gold for the average investor,
without incurring the storage and insurance costs associated with a physical gold holding, and
allowing liquidity for the asset to be easily bought and sold. Gold ETFs have therefore opened up a
new avenue for gold investment – physical investment traded on a stock exchange.
The gold price has been positively affected by the US economic downturn and more recently the fear
of a second global recession in the wake of the European debt crisis and US credit downgrade. This
has been accompanied by rising inflation and a falling US Dollar, which has boosted demand for
gold as a US Dollar and inflation hedge.
Sources: AME Mineral Economics, GFMS 2011, World Gold Council
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