AVOCA OPENS ITS OFFER FOR DIORO TO CREATESIGNIFICANT WA GOLD...

AVOCA OPENS ITS OFFER FOR DIORO TO CREATE
SIGNIFICANT WA GOLD PRODUCER
Highlights:
• Avoca opens its offer to acquire 100% of the shares in Dioro and commences dispatch of its Bidder’s Statement to Dioro shareholders.
• Dioro shareholders will receive a substantial 51.7% share price premium to the closing price of Dioro’s shares on 9 April 2009 – the last trading day prior to the announcement of this takeover and based on yesterday’s closing price for Avoca shares.
• Using the 3 month VWAP of Dioro’s shares up to and including 9 April 2009, the premium offered by Avoca is a significant 78.8% based on yesterday’s closing price for Avoca shares.
• Creation of an ASX 200 WA focused gold producer with: estimated production of 250,000 ounces per annum, a highly experienced and proven management team; a strong financial
position, increased institutional support, greater liquidity and a demonstrated ability to access capital markets on favourable terms.
• Avoca has already acquired a substantial 14.95% interest in Dioro from its major shareholders. Importantly, these shareholders retain exposure to Avoca’s potential growth
by holding Avoca Shares.

Overview
ASX 200 mid-tier gold producer, Avoca Resources Limited (ASX: AVO), has today opened its offer to acquire all of the shares in Dioro Exploration NL (ASX: DIO) and is in the process of dispatching its Bidder’s Statement to Dioro shareholders outlining the compelling logic of its offer.
The Offer is on the basis of 1 Avoca Share for every 2.82 Dioro Shares. Based on yesterday’s closing price for Avoca shares of $1.69, this values each Dioro share at 60 cents, representing:
• a significant 51.7% premium to the Dioro closing share price of 39.5 cents on 9 April 2009, the last trading day prior to the offer being announced; and
• a significant 78.8% premium to the 3 month VWAP for Dioro shares of 33.5 cents up to an including 9 April 2009, the last trading day prior to the offer being announced.
The offer is subject to conditions, which are set out in the Bidder’s Statement, and will close at 5:00pm (Perth time) on 14 July 2009, unless extended. As announced yesterday, one of Avoca’s key conditions has now been fulfilled in that Avoca has received foreign investment approval to acquire 100% of the issued capital of Dioro.
As previously announced, Avoca purchased 14.95% of Dioro’s issued share capital from Dioro’s two major shareholders, Harmony Gold Mining Co. Limited and Baker Steel Capital Managers LLP.
Importantly, they retain exposure to Avoca’s potential growth by holding Avoca shares they received in exchange for the sale of their 14.95% interest in Dioro.
Avoca Chairman Robert Reynolds said that all Dioro shareholders will now be able to accept Avoca’s compelling offer to acquire their shares in Dioro.
“Early support for Avoca has already been demonstrated by our purchase of the 14.95% interest from Dioro’s major shareholders, who have already recognised the benefits of accepting Avoca shares,” Mr Reynolds said.
“Combining the two southern Kalgoorlie gold companies is a logical step forward and the Avoca Board is confident that it will provide a dramatic value driver for the shareholders of both companies.
“Not only will Dioro shareholders receive a significant premium for their shares, they will also gain
exposure to a larger, ASX 200 gold company with first-class assets and a proven management team with a demonstrated ability to rapidly unlock the value in its projects,” Mr Reynolds said.
Avoca is confident it will produce 180,000 ounces in FY2009 / 2010, at cash costs of approximately A$450/oz (net of royalties), and recently delivered a new weekly gold production record of 4,280 ounces from Trident.
Avoca’s Managing Director, Rohan Williams said a combination of Avoca and Dioro would create a WA focused gold producer with three gold mining operations in close proximity; Avoca’s flagship Trident operations and Dioro’s Frog’s Leg (49% interest) and the South Kalgoorlie operations.
“Combining these assets into one company would create a significant WA gold producer with a portfolio of quality assets, and an achievable objective of becoming Australia’s pre-eminent mid-tier gold producer,” Mr Williams said.
“The primary projects for the two companies are in close proximity and we believe there are potentially significant cost savings that may be realised from operational synergies.
“Following a successful transaction, Avoca would be a 250,000 ounce per annum gold producer and, with the largest tenement holding in Australia’s richest gold belt: the Kalgoorlie to Norseman gold belt; it will be well positioned to advance towards its long term goal of producing 500,000 ounces of gold per annum,” Mr Williams said.