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11 August 2009
Avoca extends for 1 week and declares Offer FINAL
ASX200
gold producer, Avoca Resources Limited (Avoca) (ASX:AVO)
has today:
extended,
by one week,
the Offer period under its unconditional takeover Offer for all of the shares
in Dioro Exploration NL (Dioro), so that it will now close at 5.00pm
(WST) on Wednesday 19 August 2009; and
declared
both its Offer price and Offer period FINAL Avoca will NOT be further
extending its Offer period nor increasing its Offer price.
Avoca’s Offer values Dioro at 75.7
cents per share. This
represents a premium of approximately 92% to the 39.5 cent closing price
of Dioro Shares on 9 April 2009 (the trading day immediately prior to the
announcement of Avoca?s Offer).
Avoca Chairman, Mr Robert
Reynolds, said that today’s announcement makes it clear
to all Dioro shareholders that Avoca’s unconditional Offer is final, and
will close on 19 August.
Any shareholder who wishes to receive Avoca’s
generous Offer (of 1 Avoca share for every 2.3 Dioro shares held), and
accelerated payment terms, needs to ensure they accept before that time.
We encourage Dioro shareholders to ACCEPT IMMEDIATELY before it
is too late, said Mr Reynolds.
We would also fully expect the Dioro
directors to provide their shareholders with a recommendation in good time
prior to the close of the Avoca Offer. We do not believe they need to
wait for Ramelius? bidder?s statement - there is more than enough information
about both companies in the market for them to assess which is offer is
superior.
Avoca believes its Offer is far superior to
the proposed Ramelius offer and provides Dioro shareholders with greater tangible
benefits now and in the longer term. The reasons for this are set out in
Avoca’s Fifth Supplementary Bidder?s Statement, but the key reasons
include that:
Avoca
has a planned production profile from Higginsville of 160,000 to 200,000 ounces
per year for the next 8 years. In contrast, Ramelius has announced a
planned production profile from its Wattle Dam underground gold mine of only
approximately 70,000 ounces, finishing in the third quarter of 2010 (i.e. only
one year), and with no subsequent or future production plans.
Ramelius
Wattle Dam mine has no JORC reserve ounces. Considerable uncertainty
exists over Ramelius? planned production from Wattle Dam underground, which is
yet to commence ore development and stoping.
The
Avoca Offer is the only offer that is able to provide Capital Gains Tax (CGT)
roll-over relief (if Avoca obtains an interest in 80% or more of the Dioro
shares as a result of its Offer). As Avoca already has an interest in
approximately 24% of Dioro?s issued share capital, and has no intention of
accepting Ramelius offer, it is not possible for the Ramelius offer to provide
Dioro shareholders with CGT roll-over relief.
Avoca’s
Offer is unconditional, whereas the proposed Ramelius offer is conditional
(including a 50.1% minimum acceptance condition). Given Avoca’s 24%
interest in Dioro, the likelihood of Ramelius achieving this condition is
significantly reduced.
Ramelius
share price and market capitalisation of approximately $114 million
significantly over-values the Wattle Dam asset based on production guidance
from Ramelius, and the small 118,000 resource base of Wattle Dam.
Avoca Managing
Director, Mr Rohan Williams, said if a Dioro shareholder was to accept Ramelius
proposed bid, if it is made, they would be selling their Dioro stock for
over-valued shares in a Company with small, unproven assets. This is critically
important.
Avoca is confident
that the Dioro directors will recognise this.
This compares with
Avoca, which produced in the last four months almost the entire targeted underground
production at Wattle Dam. Mr Williams said.
Ramelius offers no
certainty of revenue and significant uncertainty with respect to production and
operating costs.
As the major
shareholder in Dioro, we believe that combining it and Ramelius would be a
major backward step and, as previously stated, we will not be accepting
Ramelius offer of its scrip, if and when it is made..
?By joining Avoca,
Dioro shareholders can be part of an ASX 200 Company producing 250,000 ounces
per annum and with the credentials to become Australia’s
pre-eminent mid-tier gold producer.
Please follow the
links below to view the following documents for immediate release to the
market:
(a) Avoca’s
Fifth Supplementary Bidder’s Statement (which, among other things, sets
out in greater detail why Avoca considers its Offer to be superior to the
Ramelius proposal); http://www..purplecom.com.au/_content/documents/1302.pdf
(b) a formal Notice of
Variation Extension of Offer Period
http://www..purplecom.com.au/_content/documents/1303.pdf
For the purpose of ASX Listing Rule 3.2,
Avoca confirms that:
(a) at the
date of the Offer, Avoca (together with its associates) had a relevant interest
in 14.95% of Dioro’s ordinary shares; and
(b) at the
date of this Offer extension, Avoca (together with its associates) has a relevant
interest in 23.90% of Dioro’s ordinary shares.
For further enquiries, please contact:
Avoca
Resources:
Rohan Williams 08 9226 0625
Purple
Communications: Warrick
Hazeldine 08 6314 6300 / 0417 944 616
***
Purple Communications
Level 3, 28
Kings Park Road, WEST PERTH
WA 6005
Ph: 08 6314 6300 Fax: 08 6314 6355
purple@purplecom.com.au