Avocet Mining

Avocet Mining targets annual gold production of 220,000 oz after lifting interim output 74% to 97,747 oz and achieving a £10m profits turnaround.

AIM-listed Avocet, which has been switching its focus from South East Asia to West Africa, turned a $4.5m (£2.9m) loss into $11m pre-tax profits in the six months to June, on turnover up 70% to $92.1m.

The main boost came from its new Inata mine in Burkina Faso, which contributed 51,063 oz to the total, at a cost of $569 an ounce, against an average sale price of $1,170 an ounce. Interim chief executive officer Brett Richards, a former luminary of Canadian-owned and Congo-focused Katanga Mining, says Inata, which produced nearly 11,500 oz of gold in the month of June alone, is now the principle focus of the company.

Avocet now sees falling production and rising costs at its former mainstays, Penjom in Malaysia and North Lanut in Indonesia. By contrast, the company cites 900,000 oz of gold reserves and potential resources of 1.6m oz at Inata and has the goal of doubling reserves there and also doubling production in two years.

Richards says the company is reviewing options for disposing of its South East Asian operations, which sport a claimed discounted net asset value of $190m (£120m). At 125.25p, the shares, despite previous disappointments, could now repay a strong-nerved medium-term punt.