So Kal, what your saying is that just like here in Oz in Brazil...

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zipperlip

28,697 Posts.

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07/09/17

08:57

Post #: 27050376
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Originally posted by Kalenn ↑

Bladder,

Depreciation is a relative constant, X% of capital expense claimed back as a deduction each tax year. So don't forget this is money that ends up in the AVB bank account without having to pay company tax on it.

One variable is the rate of company tax. In Brazil the total tax take is 34% but there are then claw backs for various activities and remote locations that allow the effective tax rate to come back down to 16%. These claw backs have to be applied for and then you await bureaucratic determination. They don't necessarily turn up in the first years books.

Analysts often look at Earnings before interest, tax, depreciation and amortization (EBITDA) as it is looking at operating performance. In AVB's case there is no interest and while there is Tax we wont really know the fine detail of that impact for another 6 months at least. Depreciation and amortisation are accounting costs but the money still ends up in the AVB bank account. Eg depletion mentioned above, yes, every time we mine a pound of copper the copper is reduced in our inventory but the cash still goes to the bank account.

AVB's ability to hold capital; and use that war chest to grow the gross value of the company is the determinant that I personally focus upon. ie I'm not looking for dividends etc. I'm looking for capital growth.

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So Kal, what your saying is that just like here in Oz in Brazil there are many ways to skin the proverbial cat when it comes to tax, depreciation, where your mine is positioned and many many more loopholes and rabbit warrens?

Second guessing what Avb will actually pay in tax and what profits will make it into the war chest is like guessing what the SP will be on Friday week?

I totally agree with your last sentence but I don't know what the word dividends means in the second last sentence!

I've never heard it being used in any company that's building up to be a midtier Cu producer

AVB Price at posting: 9.8¢ Sentiment: Buy Disclosure: Held
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