Ok, there appears to be much discussion over the past few days which, IMO, appears to focus heavily on the past as well as focused on posters and not on the company. As they say, its difficult to drive forward whilst looking in the rear vision mirror.
Sure, there are more than ways to skin a cat and the company could have done some things differently but the point I wish to make is, that right here and right now, AVB are in good shape after weathering a severe down cycle.
As PoC finds support and consolidates, I believe that early adopters will look to buy companies who may be able to quickly build JORC resources as well as expand production and resulting cashflow. PE expansion to provide MC growth as copper becomes more in vogue and the wider investment community gain confidence in a cyclical recovery of copper.
These are not new concepts and are simply signs of a turning cycle. No company controls the cycle and cannot influence it. All they can do and trim the sails, survive as best possible and prepare as best they can for the inevitable recovery.
So without looking back and blaming the past, here we are, a company which is located in an area which is recognised as an extremely mineral rich region of global significance. We have accumulated the second largest tenement holding behind Vale. Importantly, we have our first mine in production producing a highly desirable grade and product resulting in cash flow. This production plant will be expanded to support higher production from below current pit and surrounding deposits. We have a Stage 2 mine, which will add the cash flows as its advanced. All of this adds to the profile of a company which is planning to build year on year growth.
Did I also forget to add that this company is debt and covenant free. The company remains independent of bank demands throughout the down cycle. There will be a time for the company to take on a level of debt to leverage opportunities at some point however IMO, its important for this to be on the right terms for the company, secured by assets of the companies choosing so as not to be disadvantaged by the banks.
I like to look at AVB and its competitors as yachts sitting in a windless sea, miles from any land. They all await the winds to arrive and some will not survive to see that day. When the winds arrive, it will only be those who have prepared early to build strong foundation to launch from. All will benefit from the winds but some will benefit more than others when they set the spinica. I see AVB as being in good shape and well positioned to benefit.
At this point, I hope readers don't see this post as a ramp. I am only attempting to illustrate what I see as factors which are in AVB's favour at this current point in time.
AVB Price at posting:
6.1¢ Sentiment: Buy Disclosure: Held
