Avoca steps up Dioro chase

Avoca is attempting another takeover bid for Dioro Exploration.

Avoca Resources managing director Rohan Williams said the company is still interested in making a takeover bid for Dioro Exploration, despite the explorer’s earlier rejections.

Yesterday, Perth-based Avoca announced that it had started mining at its Trident Gold mine in Western Australia.

Williams said the Trident gold mine had helped the company turn a corner as it seeks to underline its perceived management strength in the pursuit of Dioro Exploration.

On 14 April 2009, Avoca made an off-market scrip $49 million takeover offer for Dioro.

In the 12 months to the end of June, Avoca expects to produce between 125,000 and 130,000 ounces of gold from Trident at its Higginsville project.

Yesterday, Avoca reiterated its output guidance for 180,000 ounces in the 2010 financial year at an average cash cost of about $450 an ounce.

“We think by the middle of the year the time’s going to be right for Higginsville to be almost looking after itself…it will be steady state at a full production rate and we will need to be looking at how we’re going to grow the company beyond that,” Williams said.

Avoca secured a 14.9% stake in Dioro from its two major shareholders and is preparing to release its bidder’s statement next week.

The company has offered one of its shares for every 2.82 Dioro shares.

Williams wants Avoca to join with Dioro so that the two companies can become the largest tenement holder in the Kalgoorlie/Norseman belt.

“We’re very interest in working with the Dioro board and what we would like to do is work with them to have their board recommend to shareholders to accept the bid,” Williams said.

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