27/07/2009 - 10:17

Dioro in halt as Avoca extends offer

27/07/2009 - 10:17

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Shares in takeover target Dioro Exploration have been placed in a trading halt ahead of an announcement regarding a Canadian company's proposal to buy it's flagship asset while hostile suitor Avoca Resources extends its takeover offer again.

Dioro in halt as Avoca extends offer

Shares in takeover target Dioro Exploration have been placed in a trading halt ahead of an announcement regarding a Canadian company's proposal to buy it's flagship asset while hostile suitor Avoca Resources extends its takeover offer again.

Dioro shares are expected to commence normal trading on Wednesday, July 29.

Its shares were at 71 cents, down 2.5 cents, when it went into a trading halt today.

Dioro says it will soon release an update on the status of its talks with Northgate Minerals, a Toronto-based gold and copper miner, which was revealed last week to be seeking to buy Dioro's 49 per cent stake in the Frog's Leg mine near Kalgoorlie.

Meantime, earlier today Avoca extended its all-scrip offer by one week as it waits on further details of Northgate's proposal.

In a statement today, Avoca said it was "surprised and very concerned" that Dioro would consider selling its interest in Frog's Leg, given the geotechnical issues experienced at its other assets.

Since September last year, Dioro has experienced a number of pit wall failures at its South Kalgoorlie gold operation, resulting in the suspension of production.

"Not only is such a sale likely to result in an immediate tax liability (and consequent erosion of value), but it also means that Dioro shareholders will be deprived of any upside from the Frog's Leg gold mine," Avoca said.

Avoca is offering 2.4 of its shares for each Dioro share, valuing the offer at around $68 million.

Dioro has rejected Avoca's bid, saying it undervalues its assets.

Avoca is Dioro's largest shareholder with a 20.97 per cent stake.

Avoca shares were unchanged at $1.72 at 1352 AEST.

 



 

 

 

 

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