Pala Investments Holdings Ltd has acquired a 13.3% shareholding in Avoca Resources Ltd from St Ives Gold Mining Company Pty Ltd and Gold Fields Australasia Pty Ltd, both wholly-owned subsidiaries of Gold Fields Ltd, in an off-market purchase equivalent to $1.32 per share.
Pala, which is registered in Jersey, UK, is a US$900 million alternative investments fund focused on the mining and resources sector. Pala Investments AG (PIAG), based in Zug, Switzerland, is the exclusive adviser for the fund.Commenting on Pala's investment in Avoca, Avoca's Chairman Robert Reynolds said: "We are pleased to have an investor such as Pala become our largest shareholder. Pala is a very knowledgeable investor in the mining sector and we look forward to a close working relationship. Avoca will invite a PIAG nominee to join the Board of Directors."Jan Castro, Managing Director of PIAG, added: "Pala's investment in Avoca represents an attractive entry platform in the gold sector. Avoca has been recognised as a high-quality emerging gold producer with strong exploration prospects. “We have a tremendous amount of respect for what the management of Avoca has accomplished to date and Pala looks forward to providing additional capital to the Company for the development of Higginsville. “Pala is also excited about working actively with management to execute its strategy, including the continuation of an active exploration program, both at Higginsville and at its other properties, designed to realize the full potential of its asset base."Avoca holds a 100% interest in the Higginsville Gold Project in Western Australia. Since its discovery in late 2004, the Trident Gold Deposit at Higginsville has increased to a total resource base of 797,000 ounces. Following the completion of a feasibility study in December 2006, first gold production is expected in early to mid 2007 and will ramp up to an annualised rate of 160-190,000 ounces at an average life-of-mine cash cost of $369 per ounce. In addition to Higginsville, Avoca holds interests in a number of quality exploration projects in Western Australia and South Australia.