Gold Fields out of Avoca; Swiss in Paul GarveyMonday, 22 January...

Gold Fields out of Avoca; Swiss in

Paul Garvey
Monday, 22 January 2007

SOUTH African miner Gold Fields has cashed out its stake in emerging Western Australian gold play Avoca Resources, pocketing $23.2 million after offloading its stake to UK-registered, Zug-advised Pala Investments Holdings.

Gold Fields picked up the bulk of its stake in Avoca in 2004 when it sold the explorer the Higginsville gold project, now under development. As part of that transaction, Gold Fields was issued Avoca shares at an average price of 20.3c apiece.

The 19.85 million Avoca shares previously held by Gold Fields are now owned by Pala Investment Holdings, a $US900 million ($A1.14 million), Jersey-registered investment fund focused on the mining sector. The fund's exclusive adviser is Zug-based group Pala Investments.

Pala paid around $1.32 per share in its off-market purchase of Gold Fields' stake in Avoca.

Avoca chairman Robert Reynolds said he welcomed Pala as the company's largest shareholder, with a representative of the fund to be invited on to the Avoca board.

"Pala is a very knowledgeable investor in the mining sector and we look forward to a close working relationship," he said.

Pala managing director Jan Castro described Avoca as a high quality, emerging gold producer, and said Pala looked forward to providing additional capital to the company for the development of Higginsville.

Once it comes into operation later this year, Higginsville will produce 160,000-190,000oz of gold a year at an average cost of $369 per ounce.

Shares in Avoca were steady at $1.32 at the close of trade today.