AVB have $24m in the bank (as at Sep-14 Qtrly)....with lots of drilling to come now as a result of this morning's announcement, plus they then need to do the Pre Feasibility (also mentioned in this morning's announcement). Plus they will have all those admin expenses to cover such as salaries etc.
Banco Votorantim (the Syndicate lead banker) and others are looking to finance AVB with $58m (see announcement Jun-13 "Key Terms Agreed") alongside the $12m secured from Black Rock (see announcement 8th Oct-13) which is only to get Stage 1 constructed.
This Stage 1 sand pit then needs to generate enough cash flow in order to "finance the second project" (refer page 12 of last Qtrly).
But for those with short memories...let me remind you that "financing the 2nd project" actually means "the cash flows from stage 1 will be sufficient to support a bridging loan to finance Stage 2 into production" (refer to the teeny weenie little footnote #5 on page 3 of AVB's announcement of 16th Oct 2013 when they did an $18m placement).
In other words...they are going to need more money before Stage 2 commences - either by way of the bridging loan they have mentioned or.....well, you know (in my opinion) they might have to pass the AVB baseball cap around again. Whatever they manage to pull out of the sand pit is not going to be enough to build "the Mine". This is not me saying this - it is the company via its various releases (including footnotes)
It is only my opinion but, you know, they might decide to do both - a further loan PLUS raise more money - like they did in 2013 when the Bank Terms for $58m (STILL not secured yet!) and the Blackrock terms for $12m still weren't enough to stop AVB from doing two more subsequent placements ($18m raised at 7.5c in Oct-13 then $23m raised at 7.5c in May-14 - catching the cheer squad with its pants down on both occasions).
And as you know.....the time lines keep getting missed, and that tends to eat into the petty cash.
So - that's my reasoning for speculating there might still be more dilution ahead. Its only my opinion...but you asked.
Regards
Coop
AVB Price at posting:
7.2¢ Sentiment: None Disclosure: Not Held
