Avocet Mining

A 59% gold resource boost to 3.36m oz at its Inata project in Guinea has brought renewed cheer to Avocet Mining (AVM). The AIM-quoted company, which recently received $170m (£106m) of the $200m sale proceeds for its former South East Asian assets, says the new resource, with a low average grade of 1.46 grammes of gold per tonne of ore, comprises 979,600 measured oz, with nearly 1.6m indicated oz and almost 823,000 inferred oz. 

Increasing Inata's resource estimate to 3.36m oz brings Avocet's total West African resources, in Guinea and Burkina Faso, to 5.03m, oz of gold, more than twice the figure prevailing when the company obtained them in 2009. Inata is already producing at a potential annual rate of 162,000 oz and Avocet has set itself a production target of 245,000 oz of gold a year.

Chief executive officer Brett Richards points out the extra resources at Inata have come at a discovery cost of less than $10 an ounce, against today's market price of $1,886.5. He has pleased the market by altering the company's hedging arrangements, so that most of its production will be sold at spot prices.

Recommended by Growth Company Investor at 73.75p in 2009 and later at 190.75p, Avocet's shares now trade at 260.5p. Hold on for now.