avoca res / heron res

Heron sells 6 million unlisted options in Avoca.

If anyone had any idea how good Avoca's next anticipated drilling results were going to be, then one would think that Heron might.

Interesting to note that the report lodged late in the day yesterday can be construed in several ways.

(1) That Heron is doing the right and proper thing in selling the Avoca holding before the AVO results are released. (good or bad)
One would have thought that the upside potential for Avoca from todays s.p. is outstanding. So why sell?

(2) Heron needs the dollars to continue its expensive PFS at Kalgoorlie and needs cash in a hurry - otherwise one would have thought that they would await the AVO drilling results.

(3) The AVO results will not be as good as expected?

I personally think that it is a combination of 1 and 2 above and the professionalism of the Heron management.

Below is the report to ASX.

Heron Resources Limited (ASX HRR) is pleased to announce that it has increased its cash reserves by an additional $712,000 following the sale of six million Options in Avoca Resources Limited (ASX: AVO) These funds will be applied to further drilling and metalurgical studies for Heron's Kalgoorlie Nickel Project (KNP)

Exploration Director Mathew Longworth said Heron continues to realise value for its shareholders while progressing the development of the KNP
"This transaction reflects our ongoing strategy of divesting or joint venturing our non core assets on favourable terms." said Mr. Longworth.

Heron acquired the Options as part of spinning off its gold assets to Avoca in February 2002.
The 21 million shares acquired in the sale transaction were previously ditributed to then Heron shareholders as a 1 for 5 in specie distribution.

"The Avoca in specie distribution has been an outstanding success for Heron shareholders, being a process significant value through the high quality of Avoca's projects, management and strategies" he said.

The sale of the Options and recent resignation of joint director Ian Buchhorn, concludes a corporate strategy which has delivered real benefits to both Heron and Avoca.

The options were sold to institutional investors. The transaction was coordinated by Heron's corporate adviser Argonaut Capital Limited.

Yours........
M. Longworth

****************************************

Well the next success story might just be the other spin off that Heron did in forming the junior - Pioneer Nickel and the next and probably last spin off being Regent Resources from which Heron shareholders will yet again benefit!!...........I must say special thanks to Joe Gutnick because without him Avoca may have never been born.

WELL DONE HERON!! WELL DONE AVOCA!! WELL DONE PIONEER.