The banks review of the Stage 1 Feasibility Study is on-going with the bank willing to adjust Capex and Opex values to recognise favourable shifts in the FX rates between the Brazilian Real and the US Dollar. Devaluation of the local currency by ~14% in recent months helps offset the softness in copper prices. Almost all the remaining construction budget (~US$52m) is in Brazilian Reais having already purchased the US$ denominated items such as the Ball Mill and Filter.
Given the tough mining climate, AVB should be in a good negotiation position with regards to construction contracts and lower inflationary pressures.
Hedge the USD BRL for the next 3 years please.
AVB Price at posting:
7.3¢ Sentiment: None Disclosure: Held
