Highlights of the Offer
§ ASX 200 mid-tier gold producer, Avoca Resources Ltd (ASX:AVO), announces offer of 1 Avoca share for every 2.82 Dioro Exploration NL shares, which values Dioro at $0.53 per share1.
§ This represents a substantial and attractive bid premium of:
o 34.2% to Dioro’s closing share price on ASX of $0.395 on 9 April 2009, the last trading day prior to this announcement;
o 37.0% to the 1 month volume weighted average price (“VWAP”) of Dioro shares on ASX of $0.387 prior to this announcement; and
o 58.2% to the 3 month VWAP of Dioro shares on ASX of $0.335 prior to this announcement.
§ Avoca has already acquired a 14.95% relevant interest in Dioro by entering into unconditional share purchase agreements with Dioro’s two major shareholders, Harmony Gold and Baker Steel Capital Managers.
§ The Combined Group will be a leading, growth oriented, WA-focused gold company with:
o Three producing assets, all south of Kalgoorlie, producing approximately 250,000 ounces of gold per annum2 in FY20103;
o Low cash operating costs and potential operational synergies;
o A strong and highly credentialed Avoca management team;
o A 4,000,000 ounce resource base4 within a 3,800 sq. km highly prospective tenement holding;
o Greater market liquidity and access to capital markets with strong institutional support; and
o Well positioned in the Australian gold industry for further growth.
Overview
Avoca Resources Limited ABN 30 097 083 282 (ASX:AVO) (“Avoca”) announces its intention to make an off-market scrip takeover offer (the “Offer”) for all of the issued shares in Dioro Exploration NL ABN 31 009 271 532 (ASX/TSX:DIO) (“Dioro”).
A combination of Avoca and Dioro (the “Combined Group”) would create a leading ASX 200 Western Australian focused gold producer with three gold mining operations2, all located south of Kalgoorlie, producing approximately 250,000 ounces per annum (see Figure 1) in FY20103, and a portfolio of quality exploration targets that are expected to deliver future growth.
§ Three mining operations – Higginsville, Frog’s Leg2 and South Kalgoorlie producing an estimated 250,000 ounces per annum in FY20103 at low cash operating costs. The close proximity of all three operations will potentially provide operating synergies and an efficient management structure for all sites (see Figure 2);
§ Combined resource base of approximately 4,000,000 ounces4;
§ 3,800 sq. km of highly prospective exploration tenure lying adjacent to the new 1 Mtpa Trident treatment plant and the 1.2Mtpa Jubilee treatment plant;
§ Larger and stronger balance sheet providing a solid platform to achieve Avoca’s long term target of increasing annual gold production to 500,000 ounces; and
§ Increased liquidity and institutional support will enhance the Combined Group’s access to capital markets. Furthermore, the Combined Group may receive a market re-rating due to its increased scale and liquidity.
Avoca’s Chairman, Robert Reynolds, said “The combination of the two companies is compelling and would bring together three gold operations all located south of Kalgoorlie, including two of the most exciting producing operations in the Eastern Goldfields region – Higginsville and Frog’s Leg (in which Dioro has a 49% interest) – for the benefit of all shareholders.”
Avoca’s Managing Director, Rohan Williams, said “Not only are Dioro shareholders being offered a significant premium, they will also gain exposure to a larger gold company that is listed in the ASX 200 and enjoys strong institutional support.”
“Avoca’s Board is confident that putting the Avoca assets together with the Dioro assets and potentially realising the upside offered by the Combined Group will be a dramatic value driver for the shareholders of Dioro and also Avoca.”
“Following a successful transaction, Avoca would be the single largest Australian-domiciled tenement holder south of Kalgoorlie.”
§ ASX 200 mid-tier gold producer, Avoca Resources Ltd (ASX:AVO), announces offer of 1 Avoca share for every 2.82 Dioro Exploration NL shares, which values Dioro at $0.53 per share1.
§ This represents a substantial and attractive bid premium of:
o 34.2% to Dioro’s closing share price on ASX of $0.395 on 9 April 2009, the last trading day prior to this announcement;
o 37.0% to the 1 month volume weighted average price (“VWAP”) of Dioro shares on ASX of $0.387 prior to this announcement; and
o 58.2% to the 3 month VWAP of Dioro shares on ASX of $0.335 prior to this announcement.
§ Avoca has already acquired a 14.95% relevant interest in Dioro by entering into unconditional share purchase agreements with Dioro’s two major shareholders, Harmony Gold and Baker Steel Capital Managers.
§ The Combined Group will be a leading, growth oriented, WA-focused gold company with:
o Three producing assets, all south of Kalgoorlie, producing approximately 250,000 ounces of gold per annum2 in FY20103;
o Low cash operating costs and potential operational synergies;
o A strong and highly credentialed Avoca management team;
o A 4,000,000 ounce resource base4 within a 3,800 sq. km highly prospective tenement holding;
o Greater market liquidity and access to capital markets with strong institutional support; and
o Well positioned in the Australian gold industry for further growth.
Overview
Avoca Resources Limited ABN 30 097 083 282 (ASX:AVO) (“Avoca”) announces its intention to make an off-market scrip takeover offer (the “Offer”) for all of the issued shares in Dioro Exploration NL ABN 31 009 271 532 (ASX/TSX:DIO) (“Dioro”).
A combination of Avoca and Dioro (the “Combined Group”) would create a leading ASX 200 Western Australian focused gold producer with three gold mining operations2, all located south of Kalgoorlie, producing approximately 250,000 ounces per annum (see Figure 1) in FY20103, and a portfolio of quality exploration targets that are expected to deliver future growth.
§ Three mining operations – Higginsville, Frog’s Leg2 and South Kalgoorlie producing an estimated 250,000 ounces per annum in FY20103 at low cash operating costs. The close proximity of all three operations will potentially provide operating synergies and an efficient management structure for all sites (see Figure 2);
§ Combined resource base of approximately 4,000,000 ounces4;
§ 3,800 sq. km of highly prospective exploration tenure lying adjacent to the new 1 Mtpa Trident treatment plant and the 1.2Mtpa Jubilee treatment plant;
§ Larger and stronger balance sheet providing a solid platform to achieve Avoca’s long term target of increasing annual gold production to 500,000 ounces; and
§ Increased liquidity and institutional support will enhance the Combined Group’s access to capital markets. Furthermore, the Combined Group may receive a market re-rating due to its increased scale and liquidity.
Avoca’s Chairman, Robert Reynolds, said “The combination of the two companies is compelling and would bring together three gold operations all located south of Kalgoorlie, including two of the most exciting producing operations in the Eastern Goldfields region – Higginsville and Frog’s Leg (in which Dioro has a 49% interest) – for the benefit of all shareholders.”
Avoca’s Managing Director, Rohan Williams, said “Not only are Dioro shareholders being offered a significant premium, they will also gain exposure to a larger gold company that is listed in the ASX 200 and enjoys strong institutional support.”
“Avoca’s Board is confident that putting the Avoca assets together with the Dioro assets and potentially realising the upside offered by the Combined Group will be a dramatic value driver for the shareholders of Dioro and also Avoca.”
“Following a successful transaction, Avoca would be the single largest Australian-domiciled tenement holder south of Kalgoorlie.”
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