ann coming ?, page-68

Hi Glenn Archer.. You raise some good points: here goes:-

a) the gold credits will be useful and we all need to keep an eye on the grades being reported which, although there, aren't spectacular. We also need to be mindful of the ratio of gold to sulphides to know whether it's associated with the copper or other sulphide (makes a difference in the process route if the gold doesn't automatically report with the copper or sulphides at all and ATP has hinted at this in the recent Ann). A good question would be AVB's anticipated recovery level of the gold and how strongly the gold revenue figures in their projected cashflows.

b) open pit with a low strip ratio is about as good as it gets: however, you then need to look at other factors which might weigh against that type of mining, eg location. In WA for example it's largely a dry country, easy life; however, it rains a LOT out in Brazil and a pit will attract a lot of water into it. Once contaminated with copper that water cannot be released into the wider environment (ie a river) so becomes a real headache. Also, because of the risk to the environment the EPA bond (if applicable over there) will be high. So.. the OP grades need to be sufficiently high to finance whatever engineering is required to mitigate that risk.
Another expense will be the increased size of the tails dam: pound for pound of copper produced, a low grade deposit will require a disproportionately large tails dam to contain all the reject material: the lower the grade, the more rejects per pound of copper produced. Then there's the rehab costs when the OP comes to the end of it's life.. all of which have to be factored in at the pre-feasibility study.

c)Orebody continuity.. this IS a tricky one as the game changes with every new hole drilled. If the orebody continues at depth and grades increase appropriately (say to 4%-9% Cu and average around 6.5% Cu) then, assuming some infil drilling proves up a suitable tonnage reserve, we clearly have an underground mine on our hands. The question then will be the UG mining method selected; shaft mining or spiral decline access, together with classic stoping extraction techniques. An underground mine has a far smaller surface footprint and so the rehab/EPA costs are FAR lower.

For my money it's what's at depth that is of real interest: that's the paydirt and where the future of the company will be determined. The LG stuff closer to the surface is a bit of a diversion. Unless they prove up many millions of tonnes of it I wouldn't be surprised if they elect to come back to it later. A lot will also depend on the mineralogy differences between the LG near surface stuff (ie leval of oxidation) and that of the stuff at depth which might (and likely will) need a very different processing technique and this has been hinted at by ATP in earlier Anns.

Of course.. if Antas North and South prove to be linked then the game changes again.. I'll try to review all the info in earlier Anns over the weekend to see what looks likely: alas, I no longer have a copy of SurPac to put all the data into to guestimate the current JORC position...

For what it's worth chaps.. I consider AVB to be the hottest story on the ASX at present and if nothing else we should thank our luck stars we have the likes of ATP at the helm: if anyone can bring this off, it's him.

Hope this helps...

NB: to all you up/down rampers out there who would rather not hear this form of technical appraisal let it 'spook the market', you ought to know that ALL the institutional investors have their own teams of experience mining professionals who scrutinise every Ann and will have processed every drill result through their mining software before ATP has even hit the send button. They aren't in the slightest bit interested or distracted by the tittle tattle expressed in these forums.. so.. lets have some honest discusions (my Super's riding on this too!)

BT