Avoca Resources (AVO) is a gold producer and has projects located in Western Australia and South Australia and has been a hot stock as of late.

AVO has announced that it intends to merge with Turkish-based Anatolia Minerals Development.

The proposed tie-up will be a merger of equals, with the new company to be called Alacer Gold Corp which would have a market cap of around US$2 billion.

The merger would create a global mid-tier gold producer, which would be able to ramp up production to 400,000 ounces in 2011, and 800,000 ounces by 2015.

Furthermore, its increased size and scale would give the new company greater access to capital markets, which would allow it to lower funding costs over time.

Nevertheless, the market wasn’t too happy with the merger details, sending AVO Australian share price down 4.2% yesterday.

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