Malaysia – Penjom

The Penjom gold mine is Malaysia’s largest gold producer and was developed by Avocet after applying modern technology to grass roots exploration in an area of historic alluvial mining.  The mine is located in Pahang State, approximately 120 km north of the country’s capital, Kuala Lumpur. The mine was commissioned in December 1996 with reserves of 223,000 ounces. Successful resource development means Penjom has produced over one million ounces of gold to date and still has over 1.2 million ounces of resource. In the late 1990s, Avocet was able to overcome initial problems of carbonaceous ore at Penjom by developing unique processing systems, including complex gravity circuits and resin-in-leach ('RIL') technology. These processes have potential applications at other carbonaceous orebodies. In 2008 Penjom expanded its mining and plant capacity with plant throughput increasing from 570,000 to over 700,000 tonnes per annum to compensate for decreasing mined grades.

Production at Penjom has been between 60,000 and 100,000 ounces per annum for the last three years. The table below shows the recent operating statistics at Penjom. The Penjom deposit is geologically and metallurgically complex and contains coarse gold that gives a significant nugget effect; such factors all result in a significant degree of variability in gold production, with periods when the mine has considerably exceeded planned gold production and periods when it has underperformed expectations. In order to facilitate more reliable short and medium term planning, a major drilling programme of over 80,000 metres has recently been completed. In March 2010, following this drilling the Company released an updated Mineral Resource estimate for Penjom that increased resources to over 1.2 million ounces (an increase of over 47%). The current mine life is approximately four years, but this will be reviewed once the updated resource model has been incorporated into the existing life of mine plan.