24 May 2004NO. OF PAGES: 2Company Announcements OfficeAustralian...

24 May 2004
NO. OF PAGES: 2

Company Announcements Office
Australian Stock Exchange Limited
4th Floor
20 Bridge St
SYDNEY NSW 2000


Dear Sir/Madam,


Re: UPDATE ON HIGGINSVILLE GOLD PROJECT ACQUISITION

Avoca Resources Limited (the “Company” or “Avoca”) is pleased to advise that a key Conditions Precedent to the Higginsville Gold Project acquisition has been satisfied following satisfactory results from the metallurgical test work on the Poseidon South Extended (“PSE”) mineralisation. The metallurgical test work returned an average total recoverable gold from eight composite drill samples of 96.9%.

Avoca is also pleased to advise that the $2 million worth of Avoca shares payable to St Ives Gold Mining Company Pty Ltd (“Gold Fields”) as part consideration for the acquisition of the Higginsville Gold Project, will be issued to Gold Fields (subject to shareholder approval which will be sought at a General Meeting to be held on 17 June 2004) at the higher of 16.7 cents per share or the Volume Weighted Average Price 20 days prior to settlement.


Metallurgical Test Work Results

Lakefield Oretest Pty Ltd was commissioned by Avoca to provide metallurgical test work on a total of eight composite ore samples collected from mineralised reverse circulation (“RC”) drill holes that intersected the PSE deposit.

The eight mineralised samples represent a broad spectrum of ore type and thickness from the PSE deposit. All eight samples were tested for recovery by conventional gravity concentration and then for recovery by leachable gold using cyanidation and carbon-in-leach (“CIL”) techniques.

The total extractable gold using only the gravity concentration technique for all eight samples showed an average recovery of 85.7%. The ranges for recovery by gravity concentration of all samples were 74.4% to 94.4%. The results confirm that a significant amount of gold from the PSE deposit will be recoverable through conventional gravity concentration, which is an efficient and low cost treatment process.

The average total extractable gold using the combined gravity concentration and cyanidation / CIL process showed a recovery of 96.9%, with ranges from all eight samples between 93.7% and 99.5%. This result compares favourably with the historical average recovery of gold from previous mining at Higginsville being 96%.

The results from the metallurgical test work satisfy a key Condition Precedent of the offer made by Avoca to Gold Fields for the purchase of the Higginsville Gold Project.


Issue of Avoca Shares to Gold Fields

Avoca’s initial offer of $4.5 million for the Higginsville Gold Project payable on settlement comprises a cash payment of $2.5 million plus $2 million worth of Avoca shares. Previously the number of shares to be issued to Gold Fields was to be calculated at the volume weighted average price (“VWAP”) 20 days prior to settlement.

Subsequently Gold Fields has agreed to the calculation of the share price to be the higher of 16.7 cents per share or the VWAP 20 days prior to settlement.

Following settlement of the transaction, Gold Fields holding in Avoca will increase to 19.9%.

Settlement is planned to occur shortly after the General Meeting to be held in Perth on Thursday 17 June 2004, where Shareholders will vote on the Company’s acquisition of the Higginsville Gold Project.


Presentation at VSA Resources’ Australian Mining Conference to be held in London.

Following Avoca being selected as the successful bidder for the Higginsville Gold Project, it has been invited as one of only 7 ASX listed companies to present at VSA Resources’ 5th Annual Australian Mining Conference to be held in London on Wednesday 26th May 2004. This conference provides Avoca with an excellent opportunity to gain wide exposure to the European investment community as a potential new Australian gold producer.


Please contact Rohan Williams on 08 9226 0625 for any further information

Yours faithfully,

AVOCA RESOURCES LIMITED