avb: yet another chart, page-6

With AVB happily in a strong uptrend, the biggest question might be how far up can it go??

The obvious danger perhaps is in applying logic and building expectations on that, when the market simply isn't logical. Especially where AVB is concerned. The old saying NO NEWS is GOOD NEWS is very applicable to AVB.

Revisiting the Bell-Potter Boys evaluation of April 2012 (and ignoring the recent Helmsec report as I found it to be inadequate in some respects)...

April 2012 : "AVB has a 601kt anticpated resource of contained copper and 583.5koz of gold projected ... we arrive at valuation of 17cps based on 1092m shares on issue, using the 3% spot price rule of thumb for copper and 2% of the spot gold price"

In TODAY'S terns using the same simple methodology..

Cu spot price : US$6930/t (was $8225) 84%

AU spot price : US$1330/oz (was $1660) 80%

AVB (JORC) resource : 755,000t Cu 638,000oz Au global.

This works out to 14.4c for copper and 1.6c for the gold, (ignoring the Vale 1cps phantom contribution)

So... 16cps based on this methodology.

Conclusions:

1. Simply based on the commonly used rule of thumb, AVB in-ground resource is "worth" 16cps. This is termed the "Target Price". I believe this is as accurate as it is possible to go, as the vagaries of the market swamp any certainty in the parameter measurements.

So although the resource exceeds the anticipated BPB's one, the price of copper and gold are around 80% of what they were so it is offset.

2. Of course the above takes no account of the fact that part of this resource is about to be funded and subequently mined. That is a long way from just having a discovery and must make it worth more etc etc... But AN is only part of the resource, and the future mining of AS seems questionable at least.

But as a base target, a DATUM, I see the 16cps coming into focus now as a reality. AVB is here to stay, and has a future mapped out for well beyond a decade provided PB is economic of course. Plus there is the excitement of finding another PB somewhere.... if they can crank up their exploration again one day.

So I personally set 16cps as being quite a supportable and reasonable SP by end of year... by which point there will be the added hype of finance, and "turning the first sod" to also kick it along.

SO the ANSWER ??? SP 8.5c with a rise to Target of 16cps before end of year. I will accept 14c.

It sounds like a big jump, but with AVB.. you expect the unexpected.. and anything is possible (but not necessarily probable of course)