Avoca takeover offer - Take no action until Directors give their formal recommendation



    
    /NOT FOR DISTRIBUTION IN THE UNITED STATES OR DISSEMINATION THROUGH A
    U.S. NEWSWIRE SERVICE/
    

    PERTH, Western Australia, May 22 /CNW/ - DIORO EXPLORATION NL ABN 31 009
271 532 (ASX/TSX: DIO) - The Directors of Dioro Exploration NL ("Dioro") have
today published the following letter to shareholders:

    Dear Shareholder:

    Background

    On 14 April 2009, Avoca Resources Limited ("Avoca") announced an
intention to make a takeover offer for Dioro Exploration NL ("Dioro"). Avoca's
announcement was unsolicited and upon receipt of the notice Dioro's Board
responded by advising all shareholders TO TAKE NO ACTION.
    On 5 May 2009, Avoca lodged with Dioro, the Australian Securities &
Investments Commission and the Australian Securities Exchange ("ASX"), its
Bidder's Statement. Dioro has reviewed the Bidder's Statement and based upon
this initial review, reconfirmed the previous advice to shareholders TO TAKE
NO ACTION.
    Avoca has advised ASX that its offer has now opened, and all shareholders
should be in receipt of Avoca's Bidder's Statement. The Offer is open until 14
July 2009 which means that YOU DO NOT NEED TO TAKE IMMEDIATE ACTION.

    What is Dioro Doing?

    Upon receipt of the initial notice from Avoca, the Dioro Board
established a sub-committee to assist the Board to consider and respond to
Avoca's offer.

    
    Dioro's Board has appointed:

    -   KPMG Corporate Finance (Aust) Pty Ltd to act as independent expert to
        prepare an independent expert's report in the Target's Statement.
        Coffey Mining Pty Ltd has agreed to act as the independent technical
        expert to the independent expert;

    -   Steinepreis Paganin to act as legal advisers;

    -   Pendulum Capital Pty Limited to act as the Australian Corporate
        Advisors; and

    -   National Bank Financial Inc to act as the Canadian Corporate
        Advisors.
    

    What has happened recently?

    Over the last 12 months, Dioro has been in discussions with a number of
third parties, both domestic and international, regarding potential
transactions. In addition, prior to the announcement by Avoca, Dioro had held
preliminary confidential discussions with a third party regarding a
value-maximising transaction. Ongoing discussions with various parties may
potentially result in a counter offer to the Avoca offer or an offer to
acquire all or a significant portion of Dioro's assets. Such an offer or
counter offer could include cash or securities in the third party. While your
Directors will evaluate these opportunities, there is no guarantee that any
alternative offer will eventuate.
    A number of value-adding initiatives have been undertaken by Dioro since
the receipt of the Avoca offer and accepting the Avoca offer may eliminate
your opportunity to benefit from any future value-adding catalysts. For
example:

    
    -   On 12 May 2009, Dioro issued a news release which highlighted another
        increase in the measured and indicated resource at the Frog's Leg
        mine to approximately 1 million ounces of gold at an average grade of
        7.0 g/t. Dioro expects to issue a reserve update in July 2009; and

    -   On 18 May 2009, Dioro issued a news release which announced a short-
        term toll milling trial for processing 100% of the ore from the
        Frog's Leg mine through Dioro's Jubilee Processing Facility.
    

    To enable the Dioro Board to consider any options that may be in the best
interests of shareholders YOU SHOULD TAKE NO ACTION until such time as you
receive a recommendation from your Directors in the Target's Statement.

    What should Dioro Shareholders do and be aware of?

    Dioro Shareholders are urged to take NO ACTION in relation to the Avoca
offer on receipt of the Bidder's Statement.
    Dioro Shareholders should WAIT until the Dioro Board provides a written
recommendation in the form of a Target's Statement which will be posted in due
course to Dioro Shareholders.
    Dioro Shareholders should be aware of the following potential ADVERSE
CONSEQUENCES that may arise if you accept Avoca's offer:

    
    -   Except in limited circumstances outlined in the Corporations Act, you
        will be unable to withdraw your acceptance of the Avoca offer.

    -   You will lose all rights attaching to your shares including the right
        to vote at any meeting of shareholders to consider any alternative
        proposal.

    -   You will be unable to trade those shares on ASX or TSX (as
        appropriate).

    -   Unless you are entitled to withdraw your acceptance, or the Avoca
        offer lapses, you will be unable to accept a superior offer.

    If Dioro Shareholders have any queries in relation to this matter, they
are encouraged to contact Dioro's Company Secretary, Mr David McArthur, on +61
8 9423 3220.

    Yours faithfully

    (signed) Ted Grobicki

    Chairman
    





For further information:

For further information: Dioro Exploration NL, Registered Office: Level
2, 45 Stirling Highway, Nedlands, Western Australia, 6009, Telephone (08) 9243
3228, Facsimile (08) 9389 8327, Website: www.dioro.com.au; Postal Address: PO
Box 985, Nedlands, Western Australia, 5909

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