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I think we all understand what has happened in WA and I agree...

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mininginvestor

52 Posts.

09/04/15

08:37

Post #: 15054789
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Originally posted by Kalenn ↑

Most of the external to Brazil purchases have been concluded in the $7 million US forward spend.
Yes, Brazil is in a difficult situation and ALL financial transactions would be looked at hard. However, the substantial drop in the Brazilian Real balances out to a large degree the inflation etc. Overall, I suspect the on the ground costs will be lower not higher. Have a look at what happened in Western Australia and Queensland with the demise of the boom. Contractors slashed pricing to remain in business and compete for the little work that was on offer. That has allowed the likes of BHP and RIO to slash production costs. A similar story will be playing out in Brazil. Being a first quartile costs producer will see us get looked after.

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I think we all understand what has happened in WA and I agree with you. However financing is being sourced in Brazil, Banks in Brazil finance in BRL Brazilian reals this means that the exchange rate will work against us and will cost circa 28% more against the dollar.

AVB Price at posting: 7.5¢ Sentiment: Buy Disclosure: Held
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