Avocet Mining PLC Prospectus December 2011

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March 2010 and therefore the nine months ended 31 December 2009 and the twelve months ended
31 March 2009 exclude any revenue from the sale of gold or costs. During these periods, the main
part of Group operating cash flow was generated by the now discontinued operations, and the Group
recorded a net operating cash inflow of US$26.9 million and US$25.8 million during the twelve
months ended 31 March 2009 and the nine months ended 31 December 2009 respectively.
Net cash generated from/(used in) investing activities for continuing operations
Net cash generated from investing activities for the continuing operations was US$133.4 million for
the six months ended 30 June 2011, compared with US$11.1 million of cash used in investing
activities during the corresponding period in 2010. During the six months ended 30 June 2011,
US$158.2 million was received from the net proceeds of the South East Asian assets sold in the
period, while US$16.5 million was also received from the sale of shares in Avion. Exploration
expenditure during this period was US$19.2 million, which was undertaken within the West African
licensed areas, and payments for property, plant and equipment were US$22.0 million. The US$11.1
million outflow of cash during the six months ended 30 June 2010 includes payments for property,
plant and equipment, and the exploration and evaluation expenditure incurred at Inata and the other
West African exploration companies held by the Group, as well as Inata’s revenues of US$21.5
million and costs of US$14.3 million during the period before it reached commercial production,
which were capitalised.
Net cash used in investing activities of the continuing operations was US$37.0 million during the
twelve months ended 31 December 2010, which was a 44 per cent decrease from the US$66.7 million
used during the nine months ended 31 December 2009. During the twelve months ended 31 December
2010, US$44.0 million was used to acquire property, plant and equipment for Inata. Also during this
period $9.9 million of net proceeds were received from the disposal of investments.
During the nine months ended 31 December 2009, US$42.8 million was invested in property, plant
and equipment in addition to US$21.1 million of net funds used in the transaction to acquire Wega
Mining ASA.
Net cash used in investing activities of the continuing business was US$2.2 million during the twelve
months ended 31 March 2009. This was lower than in the nine months ended 31 December 2009 and
the 12 months ended 31 December 2010 as the Group did not own Inata during the 12 months ended
31 March 2009. During this period net cash used in investing activities related solely to deferred
consideration and exploration costs.
Net cash generated from/(used in) financing activities for continuing operations
Net cash used in financing activities of the continuing operations during the six months ended 30 June
2011 was US$37.0 million, compared with US$0.5 million used during the corresponding period in
2010. During the six months ended 30 June 2011, US$37.0 million was used to repay loans, which
included the US$25.0 million Standard Chartered Bank revolving facility, as well as US$12.0 million
in principal repayments of the Macquarie Bank Limited project facility. In contrast, no loan
repayments were made during the comparative period. However, during this period US$1.9 million
was received as proceeds from the issue of equity and US$2.4 million of transaction costs were
incurred as part of the Oslo Børs listing.
During the twelve months ended 31 December 2010, US$12.1 million was used in financing activities
for continuing operations, compared with US$34.2 million generated in the nine months ended
31 December 2009. The cash received during 2009 related to the drawdown of the US$25.0 million
Standard Chartered Bank corporate revolving facility as well as a US$9.2 million draw down of the
Inata project finance facility. In 2010 US$12.0 million of principal repayments were made in respect
of the Macquarie Project Facility (no repayments in the nine months ended 31 December 2009).
During the twelve months ended 31 March 2009, US$21.4 million was used in financing activities
relating to the continuing business. This primarily related to the US$20.8 million cost of closing out
Avocet Mining’s gold collar contract, in August and September 2008.
Credit facilities
The Group inherited, through its acquisition of Wega Mining ASA in 2009, a US$65.0 million project
finance facility with Macquarie Bank Limited. Interest on the loan is calculated at market rates
(LIBOR) plus a margin. The weighted average interest on the loan during the six months ended 30
June 2011 was 5.3 per cent (twelve months ended 31 December 2010: 5.8 per cent; the nine months
ended 31 December 2009: 5.3 per cent; the 12 months ended 31 March 2009: not applicable). Interest
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