Avoca Resources Limited (AVO) – Becoming a >$1bn Mid-Tier Gold Company at >350,000ozpa gold with a life of >10 years

• The recent intersections of ~50m @ 3.5g/t and 29m @ 5.0g/t in Apollo-style mineralisation ~200m north of the Trident orebody on the ~400RL have a significant impact on AVO’s life at Higginsville, inferring a life (when combined with Chalice and regional orebodies) of 180,000ozpa to ~200,000zpa for >10years.
• At this stage, Chalice appears likely to commence production in 2H2011, following completion of the dewatering of the pit (by end 2010), and then declining down to the Olympus mineralisation. Timed to come into production as Trident moves deeper, Chalice provides increased production flexibility in the 1.3mtpa plant.
• Following its acquisition of Dioro, Avoca announced in July 2010, that it is starting a feasibility study aimed at doubling South Kal’s Jubilee plant to ~2.4mtpa through cutting back the HBJ (Hampton Boulder – Jubilee) pit and using satellite open-cut/underground sources such as the Mt Marion (West lode) and Barbara-Surprise/Noble areas, resulting in production of >90,000ozpa for at least 10 years (Note : based on 2mtpa at 1.5g/t & 92% recovery, although grades could be higher, and also note 0.4mtpa is for treating AVO’s 49% of Frog’s Leg).
• Avoca acquired 49% of Frog’s Leg as part of the Dioro acquisition, and Frog’s Leg appears to have a life of at least 10 years, treating ~800,000tpa (or possibly higher) at ~5.0g/t to 5.5g/t for attributable gold production of >60,000ozpa.
• AVO is gradually working its way through the recently acquired vast South Kal assets which extend arc-like south around Kalgoorlie from the defunct Golden Ridge mine in the SE through HBJ, Mt Marion and Barbara in the SW, and which appear to contain significant upside potential.