~50% of capex budget committed and within budget.
This means no contingency has yet been used and may in fact also imply that they are running under budget at this point. This will free up funds for further exploration drilling and accelerating the mining studies for stage 2 Pedra Branca. As the initial stages of the development have been smooth it augers well for the concluding 50%. Lay the foundations correctly and the rest of the build usually follows in a like fashion.
Partial commissioning commencing December, full commissioning before the end of February 2016. "Following commissioning a minimum four to six week period is envisaged to achieve continuous operations." Hence, on schedule and still targeting end of Q1 beginning of Q2 for production.
Much of the construction work is tendered out to the OEM under a fixed price contract , (i.e. original equipment manufacturer Metso) who therefore knows their product well, has experienced installation crews and provides surety to AVB management that processes and budgets will run smoothly.
That access road is looking really wide now and electricity pylons are in ready for the cable pull. Concrete being poured at multiple points. So on the construction side of things management must be very happy with the major progress at all points, I know I am. Well done AVB.
The pit redesign: This is going to reduce C1 costs further. Waste ore and low grade ore removal have been reduced by approximately 7% whilst increasing by a small amount the actual ore mined.
The appointment of MACA as mining contractors. Priceless, another piece of high grade insurance for our project. Australian business practises with vast experience including local with Beadell. They are familiar with the weather patterns and issues that will cause as well as being experienced with the mine type/design. Have supplies and logistics covered etc..
Exploration: Some very interesting developments. I also like their new approach. Quietly drilling in the background with no hype. There are some interesting implications at play here ....In addition, as I and others have argued previously, being up and running during this part of the cycle will create opportunities that may turn out to be priceless. The Carajas earn-ins, the new tenements awarded (some the conclusion of lengthy legal processes originating from the Xtrata deal) and the out of state opportunities all sound brilliant in their own right. Collectively, they indicate to me that my long held belief that AVB could become the next copper major on the ASX is well on track. The next six months could get very interesting as we get news of these campaigns.
A reminder to holders, we are going to make respectable money even at current copper prices. If the copper price turns around as expected by the time AVB start production then the rewards will be even greater.
Great work AVB. We are seeing the results of an enormous effort in planning, relationship building and implementation.
Sentiment: You'd be mad to sell
AVB Price at posting:
6.9¢ Sentiment: Buy Disclosure: Held
