ten reasons to buy

So far AVB has concentrated on just a fraction of its land holdings and has been able to prove up a resource that is equal to Sandfire, yet the MC is less than 10% of that company. I know that SFR have made the transition to production so it is not a fair comparison to make at this stage but it does show the potential of AVB when, they too, make that transition from explorer to producer.
What makes Avanco stand out as the next Sandfire, no, BIGGER than Sandfire in my mind, is the ability for the company to find many more hidden elephants like Pedra Branca as their exploration continues. Here are ten good reasons to show that the Avanco story will continue to unfold for years to come

1 Clovis
The Independent Geologist’s report attached to the IPO in 2007 made this comment.
"It has been suggested that the mineralisation at the Clovis prospect on the Rio Verde property, which occurs within a magnetite-rich breccia zone (small breccia pipe) that cuts mineralized post-tectonic granite, is an Olympic Dam-type IOCG deposit and is similar to one of the deposits at Sossego."
This was a reproduction of a comment made in an internal report for Barrick back in 2000 as highlighted by Flurnt in a post back in July 2011. It is worth re-reading his post for more detail on this and other historical drill results across Avanco’s tenements.
There has been limited drilling at this site by Barrick, Noranda and Avanco. Probably the best result from those historic drill results was that from Barrick who recorded

RVD-04, 237.5m, 13.85m @ 0.76% cu from 10.5m [incl 1.0m @ 4.5% cu from 21.3m] & 22.02m @ 1.13% cu from 75.08m [incl 0.75m @ 13.6% cu & 2.78 g/t au from 83.94m]

In the 2007 IPO document Avanco reported
"A total of eight holes have been drilled at the Clovis prospect. Widespread mineralisation has been intersected including:
• 17.1m at 2.20% Cu and 0.18g/t Au from 75 metres,
The high-grade mineralisation at the Clovis prospect remains open along strike and at depth."
What I find intriguing about this site is the alignment that Clovis has to both Antas South and Antas North as shown in the attached plan. In particular the dog leg in the red Cu –ppm soil contour towards Clovis

2 Paulinho
The 2007 IPO also made the following comment
"The Paulinho prospect is not as advanced as the Antas North and Clovis prospects, with only two holes having been drilled. Widespread mineralisation was intersected in a hole collared to investigate a broad geophysical induced polarisation anomaly. Results from this hole included:
• 125.9m at 0.21% Cu from 64 metres, including
• 5.6m at 1.14% Cu from 183 metres
Mineralisation remains open in all directions. Wide intercepts of mineralisation like the above are indicative of the existence of large mineralised systems and further drill testing of this prospect is a priority."

Very limited drilling has occurred on this site even though the site sits at the intersection of two major fault lines that would be acting as dam walls for hydrothermal mineralisation. The depth of the mineralisation is encouraging even though the grade is somewhat poor. With mineralisation open in all directions, one would expect that further drilling will start to hone in on the primary copper source.

3 Garimpo Open Pit & Alagoana
Channel sampling of the Garimpo open pit was reported to have produced the following results
4.5m at 16.50% copper and 4.1g/t gold
4.3m at 8.92% copper and 48.4g/t gold
9.6m at 3.44% copper and 3.29/t gold
9.0m at 5.81% copper and 4.48/t gold
2.0m at 7.77% copper
2.0m at 7.02% copper

An anomaly has been detected beneath the open pit. The extent of the anomaly is shown in the attached aerial view. In the 2nd March 2011 ASX news update AVB suggested that the mineralisation in the open pit is structurally controlled and likely associated with deeper massive sulphides.

INV Metals who are exploring the Rio Novo tenements that immediately abut Serra Verde to the north have previously reported a drill result of 183m @0.53% Cu approximately 4 kilometres to the north of the Garimpo Open, It was suggested that
the mineralized system was plunging further to the south in the direction of the open pit.
Additionally, there are elevated gold soil anomalies immediately to the south west of the 2 Alagoana shafts which have been yet to be tested. A 1,500 metre long soil anomaly exists between the Garimpo open pit and Alagoana which has only had limited drilling. In November 2005 five holes totalling 568 metres were drilled at Alagoano which intersected extensive low grade copper mineralisation in all holes.

4 Pedro
The Pedro prospect is located in the Serra Verde Tenement and is situated to the south east of the Garimpo open pit along a 2.5klm copper /gold anomaly known as the Baiano trend as shown in the above plan. Avanco have completed 40 holes for approx. 5000 metres to date. Drilling to date has been mixed with the best result occurring in ASVD -05 returning 10.80m at 1.84% including 3.15m at 5.65% copper and including 0.75m at 18.94% copper. ASVD-21 down dip has also intersected four narrow zones of mineralisation compared to the single mineralised zone shown in the ASVD – 05 result. Whilst copper has been recorded in all but 6 holes, the intersections have all been in narrow zones. Avanco are now of the opinion that the mineralisation at Serra Verde is more likely secondary rather than primary IOCG.

All drilling to date at Pedro has been relatively shallow. Given the success of the deeper drilling programs at Antas North and South I would hope that the narrow vein intersections would follow the same pattern and start to thicken at depths below 200- 300 metres.

5 Agua Boa
In March 2011 AVB announced a transaction with Xstrata for the tenure of 3 exploration licenses and 2 exploration applications with a total land area of approx. 26,000 ha. Xstrata have a back in option in the event that a copper resource is identified that is capable of supporting an 80,000 tonnes per annum 8 year mine life. The land contains 3 copper soil anomalies with a total strike length of 14klms. At the time of announcing the transaction AVB made the following comments
“The northern copper soil anomaly (>4km in strike) which includes 3 historical drill holes, shows exceptional potential for sulphide mineralisation with significant mineralisation already intersected. The soil anomaly is the strongest on the property and is also coincident with a strong magnetic anomaly associated with magnetite alteration typical of Carajas style IOCG mineralisation.
The central copper soil anomaly (>2km in strike) shows strong IOCG related alteration in 7 historic drill holes. Numerous holes justify immediate follow up, particularly where primary copper mineralisation has already been intersected. Additionally 2 significant chargeability anomalies (+15 mv/v) were detected in the IP survey and remain untested.
The very extensive southern copper soil anomaly (>5km in strike), historical IP surveying produced coincident targets with copper soil anomalies which have not been drill tested.

The anomaly, now known as the Agua Boa trend, has had 23 holes drilled for 2928m. The company, in the September quarterly, made the following comment
"Scout holes in the north have still not explained the source of the exceptionally high grade soil anomaly which is situated coincident with a large magnetic bullseye. Drilling in the central area of the Agua Boa trend has identified zones of low intensity IOCG alteration (some greater than 100m wide) with associated lower grade mineralisation."
The company went on to say that an extensive auger drill campaign was underway to help identify the source of the soil anomaly and generate drill targets for the southern half of the 14 klm trend which had only limited exploration in the past.

Better intercepts to date include 50m at 0.32%Cu, 23.55m at 0.34%Cu and 55.0m at 0.21%Cu.

6 Capivara
As with a few of these targets, Capivara has had limited drilling with 2 scout holes drilled by AVB for just 96 metres and 2 holes by previous explorers for NSI. AVB have reported testing outcropping copper mineralisation with an intersection of 5.3m at 1.30% copper from 0.7metres.
The Capivara target lays 2.5klms along the same trend as Antas South. What has captured my interest with this site are actually 2 drill results at Antas South.

In the 11 July 2011 news release the company reported

"Hole ARVD-133 is located at the Eastern most extent of Antas South. The hole intersected two distinct HGZ’s, 0.6m at 14.45% Cu, and 3.8m at 4.57% Cu respectively. These are interpreted to represent a new high grade opportunity since these zones have not been intersected in intermediate sections. The geology of the area supports the high probability of a number of discrete HGZ’s running through the deposit." The second intercept was commencing from 65.7m.
The December 2011 quarterly reported hole ARVD – 151 which is located in a north easterly direction to Hole 133 contained 0.65m at 12.15% from 69.8m. I am hoping that this is the start of another HGZ that follows the soil anomaly around the front of Capivara. I have marked the approximate location of Hole 133 on the plan in point 1 (Clovis). This is only conjecture on my part and would welcome other opinions from those who have a better understanding of the drill results in that region.

7 Nickel Platinum Projects
In February 2011 AVB confirmed completion of the transaction to acquire up to a 75% interest in the Conceição Nickel Project from Lara Exploration. The project includes seven exploration licenses, covering a total of 46,899 hectares. To date at least three strong copper and nickel anomalies have been identified. Two anomalies extend over 1klm and have returned soil samples of up to 1,843ppm and 1391ppm with both anomalies open on strike. The third anomaly was reported in the ASX release dated 27 July 2011. The anomaly extends for 1.5klm.
The July 2011 report also goes on to state that
"At the Touro Nickel Project, Avanco has previously defined a 5km x 1.5km differentiated mafic sill in a region regarded as highly prospective for new nickel sulphide discoveries. Limited scout drilling by Avanco returned values of up to 0.38% Nickel with anomalous PGMs confirming the Touro sill as a fertile nickel host"
At the Company’s Serra Verde Project, newly found historic data has drawn attention to the potential occurrence of Nickel-PGM mineralisation situated in the northeast of the license.

Soil sampling and auger drilling undertaken by former explorers indicates the existence of mafic-ultramafic rocks below surface cover which have been delineated as being coincident with a Nickel-PGM anomalism.
Results reported from historical auger drilling at Serra Verde include:
• 8m at 4000ppm Ni, 600 ppm Cu, 40ppb Pt+Pd (NSVT-06)
• 4m at 2600ppm Ni, 1100ppm Cu, 48ppb Pt+Pd (NSVT-23)
• 7m at 700ppm Ni, 3800ppm Cu, 199ppb Pt+Pd (NSVT-05)

Whilst Avanco’s nickel projects represent a non-core activity they remain highly prospective and clearly deserving of greater attention. The Company is investigating a number of options to further advance the nickel without compromising the Company’s increasing commitment to copper. Ideas being considered include the assignment of the Nickel-PGM mineral exploration rights to Estrela Metals Limited (“Estrela”) a wholly owned subsidiary of Avanco Resources Ltd. Estrela would, (depending on market conditions and ASIC compliance) possibly provide a suitable vehicle for spin-out-IPO of a new and dedicated Nickel-PGM company"

8 Iron Ore
Apart from Trindale North, the company has previously alluded to the fact not to discount finding other BIF within their tenements. On 15/9/11 TP stated.
" New iron ore opportunities associated with Avanco’s Carajás tenure continue to be investigated."
Could this mean that he may be talking to Vale as part of the Trindale North deal to mine further BIF on existing tenements?
The 2007 IPO also noted a BIF target in the South East corner of Rio Verde which has yet to be drill tested; The Company has undertaken reconnaissance exploration over this area. A total of four rock chip samples were collected and returned between 42% and 67% Iron.

9 Other Acquisitions
The March 2012 Quarterly Report still hints at further acquisitions with the following statement
"Avanco remains committed to near term copper production and continued growth through exploration and corporate activity."
This is followed up by statements in the June 2012 quarterly and the annual report just released which stated
"Exploration is complemented by the search for opportunities to increase influence and growth in the Carajas District."
It would appear that TP is not finished yet in growing land holdings. One possibility lies with Lara Exploration who holds tenements immediately to the west of AVB’s existing holdings since he has already done a deal with them on the Conceição Nickel Project.

10 Infrastructure upgrades
The Brazilian government has recently announced a massive investment in rail and transport and port infrastructure which should have a flow on effect for companies like AVB. Vale also recently announced it wanted to participate on any infrastructure upgrades in the vicinity of its mining operations. Providing this does not lead to a monopoly situation on the use of any rail or port upgrades and AVB can secure a transport solution for its mining operation then this will significantly impact on the share price in a big way.

All of the above is not new and just represents a compilation of company news and contributions by other HC posters and myself over the last few years. What I hope it does demonstrate is the massive potential that this company has. In all likelihood we will achieve a resource of 1 million tonnes of contained copper and 1 million ounces of gold and silver once Antas North and South and Pedra Branca are fully drilled. I have not even mentioned the other copper anomalies on the Pedra Branca tenements where a 7 klm anomaly has returned a drill result of 125.3m at 0.38%CU or the 2.3klm anomaly where a drill result has returned 48.88m at 0.55Cu.

If the company can discover another resource similar to PB, and I have no doubt they will, given the results of exploratory drilling to date, then we will feasibly have a company that will make the majors and the institutions sit up and take notice. The trick here then becomes keeping the company out of the hands of predators, unless of course the offer has a dollar sign in front of it.