quarterly summary, page-119

mic231 you said

"Maybe the credit term sheet includes the need to do a Definitive feasibility study (DFS) or a Bankable feasibility Study (BFS). To me AVB have only done preliminary estimates of the cost of their project. It is a good project, however most financiers need a DFS or BFS to proceed."

I think that's a valid observation and in the normal course of events I'd say that process is probably being accelerated along with the obtaining of a full mining license. They were already close so I imagine it's only a small stretch. They say weeks in the quarterly. They also have the new JORC coming very soon and I believe the reason they would be doing the JORC is related to finance as well. WE do need to remember though that they have received and are receiving on going offers from a number of financial institutions. The requirements will be varied as will be the offers themselves. There is one point that most seem to be missing though; They already have indicative offers of finance! AVB haven't shared the details of those offers yet, as is appropriate, as they are in an ongoing process of negotiation with multiple financiers. However, Houston, we have lift off! Most are missing the plot, we have a 90% plus probability of finance and within weeks according to the quarterly.

Can anyone in here imagine for one moment that at the end of the process AVB will say NO to the best offer? Or that having done all the research (calcs, site visits, etc) required to make an indicative offer the finance companies would not want to see it through? I'd even go so far as to suggest AVB would consider the worst offer they got if it was the only one on the table (which we already know it is not). Any offer for stage 1 will get us to self funding stage 2, 3 etc. I had a private meeting with TP about 2 years ago, before the Xtrata deal, and even back then he was saying that the stage 1 financing might be at slightly unfriendly terms but that was of no great consequence as the real import of the finance deal was to become self funding for further stages and that was what would really cement the place of AVB as a mid tier producer in the Carajas. AVB has an incredible resource, second largest holding in the Carajas, only coming in behind Vale. Now it is looking like we might get more friendly terms though, I guess a million tonnes of copper will do a bit of convincing especially when it comes out of the ground as lowest quartile costs producer and it looks like there is plenty more to be found.

Now major banks are interested in joining the party,

"Additionally, a select group of South American and international banks are evaluating the project with a view of providing credit-approved term sheets in coming weeks."
(from Quarterly)

This indicates those negotiations have also been going on for quite some time. ..and of course "international banks" are not chasing equity in the company, they are evaluating how to make profits off loans. Hence, non-dilutive for us existing shareholders. I think the AVB board are doing an excellent job in tough economic circumstances. I believe the evidence is in that they are going to succeed very well here.