Exploration

Overview

Avocet is committed to organic growth through exploration. During the year the Company spent US$13.9 million on resource development and greenfield exploration in Malaysia and Indonesia, and drilled 72,470 metres. The Company continues to generate and explore new targets in its existing countries and in other South East Asian countries, and has approved an exploration budget of up to US$28.0 million for the next year. This includes US$11.4 million for resource development programmes at Penjom, North Lanut and Bakan. The remainder is focused on greenfield exploration and includes a contingent amount of US$8.5 million that will only be spent if earlier phases of exploration justify further expenditure.

The Company anticipates that its resource base may grow to over 6 million ounces in the next two years from these programmes. Strict performance measures are applied to ensure appropriate prioritisation and that all projects fit an optimal development pipeline as shown below. Where possible, projects that are deemed non-core to the development pipeline will be divested for value, as occurred with the Buffalo Reef prospect in Malaysia.