29 June 2009

TRIDENT’S CONTINUED SUCCESS INCREASES AVOCA’S FY2010 PRODUCTION FORECAST TO 190,000+ OUNCES

Highlights

• Increased gold production forecast of 190,000+ ounces from Higginsville in FY2010.  Mine production from Trident of 180,000 ounces at a cash cost of A$440 per ounce and additional low grade production of approximately 10,000 ounces at a cash cost of A$684 per ounce.  Total production cash costs are estimated at A$468 per ounce¹

• Thick and very high grade drill intersections returned from infill grade control drilling of a rich area of the Athena Lodes include:

• 8.0m @ 179.0g/t gold
• 10.0m @ 104.0g/t gold
• 7.0m @ 55.7 g/t gold
• 10.4m @ 52.1g/t gold
• 26.2m @ 36.9g/t gold
• 24.0m @ 36.4 g/t gold
• 20.0m @ 25.0g/t gold

• Drilling beneath the lower resource boundary at Trident has successfully intersected high grade Athena-like mineralisation.  Specifically, exploration drilling has intersected 2.9m @ 19 g/t gold in an Athena Lode-type intersection at 900m below the surface, being 150m beneath the existing Trident resource boundary.  The new intersection confirms the strong down-plunge ore continuity of the Trident gold system which remains open.

ASX 200 mid-tier gold producer, Avoca Resources Ltd (ASX:AVO), is pleased to today announce an increased FY2010 production forecast for its 100% owned Higginsville gold project, located south of Kalgoorlie in Western Australia. 

Avoca is continuing to unlock additional value at Higginsville with its aggressive exploration program and is achieving excellent results.  Drilling beneath the lower resource boundary at the Trident underground gold mine has successfully intersected high grade Athena-like mineralisation, confirming the Trident orebody remains open at depth and will likely extend mine life. 

Importantly, thick, high grade intersections from the infill grade control drilling of the Athena Lodes has given management the confidence to increase Avoca’s FY2010 production forecast. 

Avoca’s Managing Director, Mr Rohan Williams, said Trident is continuing to deliver exceptional results, including an upgraded production forecast to more than 190,000 ounces for the 2010 financial year, spectacular infill drilling results from a very rich part of the Athena Lodes and a significant new intersection 150m deeper than the previously defined resource base.  We are confident that Trident will continue to perform very well for many years to come.

Production Upgrade for FY2010

The FY2010 production forecast for Avoca’s Higginsville operation has been upgraded from 180,000 ounces at a cash cost estimate of A$450 per ounce¹ to 190,000+ ounces at a cash cost estimate of A$468 per ounce¹.

The Trident underground gold mine is forecast to produce 1 million tonnes @ 5.8 g/t gold for 180,000+ recovered ounces (assumes a 97% recovery).  The estimated cash cost for this production is an improved A$440 per ounce¹.

Given that the Higginsville treatment plant is performing above its design throughput rate, an additional 0.27 million tonnes of surface stockpile material at an average grade of 1.2 g/t gold will be treated for approximately 10,000 recovered ounces (assumes a 95% recovery).  The estimated cash cost for this production is A$684 per ounce¹.

Thick High Grade Results from Athena Infill Drilling

Infill grade control drilling of the Athena Lodes around the 1005 to 950 level has returned several thick and very high grade intersections confirming the presence of an extraordinarily rich section of the Athena Lodes, as shown in Figure 1 and below. The drill results are significantly higher grade and thicker than the corresponding mining reserve in the same area:

         10m @ 104 g/t gold

         7m @ 55.7 g/t gold

         10.4m @ 52.1 g/t gold

High grade Intersection 150m Below Trident Confirms Continuity of Ore System

Avoca has recently completed a step-out drill hole targeting the Trident ore system 150m below the existing resource boundary, currently defined to a depth of approximately 750m below surface.  The drill hole, HIGD158, successfully intersected 2.9m @ 19 g/t gold from 994m down hole (900m vertical depth) confirming the strong continuity of the Trident ore system at depth.  The mineralisation intersected in HIGD158 is similar in appearance to the Athena and Artemis Lodes, which are both characterised by sub-vertical laminated veins with coarse visible gold.  Wedging has commenced off the HIGD158 parent hole to target additional mineralisation around the intersection, and additional step-out holes are planned for the September quarter.

Figure 1 below shows the location of the HIGD158 intersection 150m below the Artemis Lode, at a vertical depth of 900m below the surface.  Also shown is the extent of the existing mining reserve in relation to the defined (and now extended) mineralisation of the Trident ore system. 

Whilst detailed confirmatory drilling is required, the current geological interpretation suggests it is possible that the Athena Lodes (shown as purple in Figure 1) and the Artemis Lodes (green, at right of Figure 1 image) may merge into a single mineralised lode surface, potentially adding additional high grade ounces to Trident and extending mine life.

Figure 1: Long section of Trident ore system showing the location of the new HIGD158 intersection of 2.9m @ 19 g/t gold, 150m below the Artemis Lodes (green at right side of image).  Also shown is the location of several thick and very high grade Athena Lodes intersections (blue ellipse) and the extent of the existing Trident reserve shown in white outline.

For further information please contact:

Avoca Resources: Rohan Williams, 08 9226 0625

Purple Communications: Warrick Hazeldine, 08 6314 6300 / 0417 944 616

Please Note:

Not for dissemination in the United States, or over U.S. newswire services.

Footnotes:

1. All cash costs reported are exclusive of royalties.

Exploration Results

The information in this report which relates to Exploration Results is based on information compiled by Rohan Williams, a full time employee of Avoca Resources Limited and who is a Member of the Australasian Institute of Mining and Metallurgy.  Rohan Williams has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.  Rohan Williams consents to the inclusion in the report of the matters based on this information in the form and context in which it appears. 

Avoca Background

Avoca is an ASX 200 gold mining and exploration company based in Perth, Western Australia. Avoca has grown rapidly since its listing in 2002, and its acquisition of the Higginsville exploration project in 2004, located 130km south of Kalgoorlie..

Following the discovery of the Trident underground gold mine at Higginsville in late 2004, and the subsequent construction of the Higginsville Gold Project which included a new 1 million tonne per annum CIL treatment facility built on time and under budget; it poured its first gold bar on 1 July 2008.  The time taken from exploration project acquisition to gold pour was exactly four years.  Presently, Trident is Western Australia’s third largest underground gold mine and has recently commenced mining the thick and high grade 1005 level, which has contributed to record gold production levels.  Avoca remains confident it will produce 190,000+ ounces of gold in FY2010 at an operating cash cost of A$468 per ounce (not including royalties).

Avoca has a highly credentialed management team with considerable expertise in exploration, project development and underground mining.  Avoca’s managing director, Rohan Williams, has more than 15 years experience in the region having worked as a geologist at the +15 million ounce St Ives field immediately north of Higginsville, and the +6 million ounce Norseman field immediately to the south. 

The Avoca Board is confident that its management team will continue to expand and develop the existing 1.45 million ounce Higginsville resource base into realising its goal of a +10 year mine life for Higginsville.  

Purple Communications

Level 3, 28 Kings Park Road, WEST PERTH WA 6005

Ph: 08 6314 6300 Fax: 08 6314 6355

purple@purplecom.com.au