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Gold producer Avocet Mining says its latest year’s profits will exceed market forecasts of £11 million pre-tax.

Overall production from AIM-quoted Avocet, which mines gold chiefly in Malaysia and Indonesia, fell from more than 208,000 ounces to 178,318 ounces. Expansion work at Penjom in Malaysia, where cash costs rose $242 to $351 an ounce (against today’s price of $673), interrupted production, forcing the company to rely on lower-grade stockpiles. Meanwhile, unseasonal rainfall at North Lanut in Indonesia, where cash costs rose from $201 to $354 an ounce, necessitated a re-engineering of processing facilities.

Chief executive officer Jonathan Henry said exploration has increased Penjom’s gold resource to one million ounces and confirmed a resource of more than 300,000 ounces at Bakan in Indonesia. He added that Avocet is ‘at an advanced stage’ in talks with the Tajikistan Government and others about divesting or selling down the company’s stake in the uneconomic Zeravshan joint venture in that country.

Avocet, which traded at more than 170p ten years ago, has come a long way since problems in its former tungsten business sent its shares down to 13p in 2002. Even so, at 125.75p, the shares have almost halved in a year.

They could make progress as a recovery punt.

Avocet Mining	AIM	£82.35m	68.25p	-1.75p
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Avocet sees output gain			30/10/2008
Avocet on the prowl			22/10/2007
Avocet on expansion trail			11/07/2007
Avocet signals profits growth			02/05/2007
Evolution			11/12/2006