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| November 14, 2005 Avocet News Release: Avocet to Acquire Strategic Interest in Chinese Gold Company | |
| Avocet Mining PLC ("Avocet" or "the Company") is pleased to announce that it has agreed to purchase shares and rights to shares of Dynasty Gold Corporation ("Dynasty") for an undiluted interest in Dynasty of up to 35.6%. Dynasty is listed on the TSX Venture Exchange in Canada. Dynasty controls a large area of prospective ground in Western China (figure 1). This includes 1,000km2 at Hatu in Xinjiang Province, 100km2 at Red Valley in Qinghai Province (within an Area of Mutual Interest of 1,000km2) and 2,000km2 at Wild Horse in Gansu Province (Area of Mutual Interest of 13,000km2, where permitting is awaited). The Hatu property encompasses an ENE-trending basin approximately 1,200m above sea level. The Qi-2 deposit on the tenement is the most advanced project and has an independently verified inferred resource of 16,855,400 tonnes at 1.68 g/t Au (912,600 ounces gold) using a cut-off grade of 1.0 g/t. Dynasty can earn up to 80% of the Hatu tenement by spending US$12 million with no conditions on the timeframe in which this expenditure must be made. So far Dynasty has spent approximately US$3 million towards this commitment. The Company believes there is substantial opportunity to increase the resource at Qi-2. The deposit is currently at the stage where infill drilling will bring the resource up to a measured and indicated category and we believe Dynasty could put the project into production within a relatively short period of time. Avocet views its investment in Dynasty as a strategic step towards expanding its presence in Central Asia and as having synergies with its existing business. The Company's operations in Tajikistan, a country which borders western China, has existing supply arrangements in the region which could be beneficially extended. Avocet has proven experience in the development and operations of projects similar to the Hatu project. The transaction requires Avocet to pay certain shareholders of Dynasty cash consideration of approximately US$1.35 million. Completion is expected by the end of November but is subject to TSX Venture Exchange approval in Canada. Additionally Dynasty has recently announced a Cdn$1.55 million private placement of units at Cdn$0.18. Each unit entitles the holder to one common share to be issued at Can$0.18 and one common share purchase warrant exercisable at Cdn$0.30 and valid for one year. Avocet has agreed to take 2.75 million units in the placement. Following completion of these transactions Avocet will own 21.4% of Dynasty. This interest will increase up to 35.6% if and when shares are issued by Dynasty under purchase agreements which have been assigned to Avocet. Avocet is a mining company listed on the AIM market of the London Stock Exchange. The Company's principal activities are gold mining and exploration in Malaysia (as 100% owner of the Penjom mine, the country's largest gold producer), Tajikistan (as 75% owner of JV Zeravshan LLC, Tajikistan's principal gold mining company), and Indonesia (as 80% owner of the North Lanut mine in North Sulawesi). For further information please contact: Avocet Mining PLC John Catchpole (Chief Executive) Jonathan Henry (Finance Director) 020 7907 9000 | |
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