AVO 0.00% $3.30 avoca resources limited

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    Higginsville Production Ramp-Up
    • Avoca’s first quarter of gold production marks its transition from developer to gold producer.
    • Gold production of 21,766 ounces for the quarter is in line with expectations as the Higginsville operation commences ramp-up.
    • Average price received for gold sales during the quarter was $AUD993 per ounce.
    • Underground production from Trident shows good progress as stope contribution accounts for 75% of all mine production by quarter-end. Total underground production for the quarter was 178,712 @ 3.8 g/t gold comprising 54% stoping material and 46% development ore.
    • Treatment plant performed well in its first quarter of operation. 251,635 tonnes treated with September’s monthly throughput rate of 88,410 tonnes in excess of the 1 Mtpa nameplate capacity.
    Recoveries averaged 96.7% for the quarter. Throughput grade averaged 2.9 g/t gold for the quarter
    following treatment of low grade commissioning material in July, with subsequent feed blend comprising underground mine feed and surface stockpiles.
    • Underground development at Trident was 2,674m for the quarter. Developed stocks ready for stoping total 500,000 tonnes of ore.
    • Grade control drilling exceeds expectations in central part of Western Zone where ore averages 30m thick at grades in excess of 12 g/t gold. Corresponding reserve grade is 7 g/t.

    Higginsville Exploration and Resource Update
    • Extensional drilling results outside resource including 28m @ 6.6 g/t gold suggests Western Zone will extend and link to the Apollo Zone at Trident.
    • 120m step out drill hole at Artemis intersects 4m @ 7.4 g/t gold at targeted location. Artemis has been intersected over 350m proving it, and Trident, remains open at depth to the north.
    • Narrow high grade intersections at Poseidon South (eg 1.5m @ 163 g/t gold) proximal to existing underground development demonstrate near-term high grade stoping opportunities.
    • Musket confirmed as at-surface high grade discovery, 40km south-east of Higginsville treatment plant.
    • Higginsville resource base increases to 1.45 million ounces.
    • Chalice underground Inferred Resource increases 58% to 123Koz. Pre-feasibility study confirms Chalice as potentially Avoca’s second underground gold mine in the district with 3.5 year mine production life producing 125Koz with an IRR in excess of 50%.
    • High grade drill results beneath 22Koz near-surface oxide resource at Fairplay North including 17.2m
    @ 18.9 g/t and 16m @ 6.4 g/t gold indicate potential for new underground mine opportunity. Further drilling required.
    Quarterly Report
    for the three months ending
    30 September 2008
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