Valuation and Developments, page-31

I know a lot people keep talking about a quick sale and Klaus' MO of 'secure, define, sell', but I wonder how many realise that he spent 4 years defining the Kibali gold mine before Moto was sold to Randgold for US$500m?

That doesn't sound to me like someone who would prefer to move on to the next potential discovery rather than extract full value from the very rare discovery sitting in front of him. No doubt there are companies out there who would prefer to take this over early at a big discount, but it's a bit of a leap to suggest the AVZ board would support this. I'm expecting us to receive fair value for the resource.

Kibali is actually a good comparison to Manono, despite being completely different metals. Randgold had to build 1600km of road to bring construction materials to site, as well as hydropower plants to power the mine.

It had a total capex of US$1.83b ($1.13b for Phase 1 + $700m for Phase 2), and now is expected to produce 750,000 ounces of gold in 2018 - about US$1 billion at the current spot price.

Likewise, Tenke Fungurume had capex of US$2.6b ($1.75b for Phase 1 + $850m for Phase 2) before a 56% stake was sold to China Moly for US$2.65b, valuing the project at US$4.73b.

Tenke produced 216,000 tonnes of copper and 16,100 tonnes of cobalt last year - worth US$2.39 billion at today's spot price. What's even more interesting is this production would have been worth US$1.64 billion when the acquisition was finalised - suggesting China Moly got an absolute bargain.

Manono's final capex will likely also be huge, but so will the revenue it generates over a huge mine life. It's also worth repeating that Dathomir has already agreed to contribute US$340m towards the infrastructure.