Companies: AVM   

AIM-quoted gold producer Avocet Mining has reported a near-four per cent fall in production to 173,000 oz from Penjom in Malaysia and Zeravshan in Tajikistan, but says it is ‘optimistic recent trends in costs and production will reverse’. Robert Tyerman reports.

Total gold output from Penjom slipped from 124,432 oz, though the fourth quarter brought a 2,200 oz increase to 32,260 oz, while full-year cash-only extraction costs are estimated to have risen from $192 to $203 an ounce – against a $429-an-ounce market price.

At Zeravshan, annual production fell 21 per cent to 44,241 oz, with a 5,200-oz fourth quarter drop to 9,827 oz, with estimated annual cash costs up 37 per cent to a clearly uneconomic $439 an ounce. Avocet, headed by chief executive John Catchpole, insists these developments should be reversed ‘in the next six months’, when the Jilau Main open pit at Zeravshan ‘becomes a far more significant source of ore’.

Avocet’s Zeravshan subsidiary has begun feasibility studies for the possible development of two underground mining projects there, Taror and Chore, on which the company has put the objective of adding 100,000 to 150,000 oz of annual gold production within the next two years. Up 3.5p today to 76.5p, Avocet shares, which once traded at nearly £2 when the company was a fully-listed tungsten venture, are a long-term speculation.