Avoca Resources has received the green light from the Foreign Investment Review Board for its takeover bid for gold miner Dioro Exploration.
Gold miner Avoca has already acquired a 14.95 per cent interest however due to its overseas shareholder Pala Investments holding an interest larger than 15 per cent, needed to get regulatory approval for the bid.
So far, Dioro's major shareholders Harmony Gold Mining and Baker Steel Capital Managers have sold all or part of their stake to Avoca.
Avoca is offering one of its shares for every 2.82 Dioro shares.
"Early support for Avoca has already been demonstrated by our purchase of the 14.95% interest from Dioro's major shareholders and the FIRB approval is another milestone for Avoca's bid to create a significant WA gold producer," Avoca chairman Robert Reynolds said.
Avoca managing director Rohan Williams said should the bid be successful, the combined entity would be the largest tenement holder in the Kalgoorlie to Norseman gold belt.
Shares in Avoca were up 6.5 cents to $1.70 while shares in Dioro were down one cent to 60c at 14:31 AEST.
The announcement is below:
- Avoca receives FIRB approval for its proposed acquisition of Dioro.
- Avoca has already acquired a substantial 14.95% interest in Dioro from its major shareholders. Importantly, these shareholders retain exposure to Avoca's potential growth by holding Avoca Shares.
- Allows Avoca to increase its interest in Dioro - beyond the previous 15% limit - to 100%.
- Fulfils a key condition of Avoca's bid for Dioro to create a significant WA focused gold producer.
ASX 200 mid-tier gold producer, Avoca Resources Limited (ASX: AVO) is pleased to advise that it has received a statement of no objection from the Foreign Investment Review Board ("FIRB") to the proposed acquisition of Dioro Exploration NL.
Avoca required FIRB approval to acquire a greater than 15% interest in Dioro because Avoca's foreign major shareholder, Pala Investments Holdings Ltd, holds in excess of 15% of Avoca's issued capital.
As previously announced, Avoca purchased 14.95% of Dioro's issued share capital from Dioro's major shareholders, Harmony Gold Mining Co. Limited ("Harmony") and Baker Steel Capital Managers LLP ("Baker Steel"). Harmony sold to Avoca its entire 12.48% interest in Dioro and Baker Steel sold a 2.47% interest in Dioro to Avoca (out of the total 10.47% interest held or managed by Baker Steel at the date of that transaction).
Avoca Chairman Robert Reynolds said that Avoca has now received FIRB approval to acquire 100% of Dioro.
"Early support for Avoca has already been demonstrated by our purchase of the 14.95% interest from Dioro's major shareholders and the FIRB approval is another milestone for Avoca's bid to create a significant WA gold producer," Mr Reynolds said.
"Importantly, Harmony and Baker Steel retain exposure to Avoca's potential growth by holding Avoca shares they received in exchange for the sale of their 14.95% interest in Dioro.
"The bid provides shareholders of both companies with an opportunity to participate in a combined company with a significant portfolio of quality assets, and an achievable objective of becoming Australia's pre-eminent mid-tier gold producer," Mr Reynolds said.
Avoca's Managing Director, Rohan Williams said a combination of Avoca and Dioro would create an ASX 200 WA focused gold producer with estimated production of 250,000 ounces per annum, combined resources of approximately four million ounces, and a portfolio of quality exploration targets that is expected to deliver future growth.
"Following a successful transaction, Avoca would be the largest tenement holder in the rich Kalgoorlie to Norseman gold belt, and would be well positioned to advance towards its long term goal of producing 500,000 ounces of gold per annum," Mr Williams said.