Hi Owenb79, there was chart produced a while back setting out copper $/lb "valued" in-ground versus being mined, over several companies. I probably do not have it, but the the difference was enormous.
AVB has multiplied its JORC by six and not a market twitch. So the correlation is not there. Double JORC again today, and what would happen.....? The market needs to see money coming in. For now a Mine Plan,cash projections and action to make it happen is the medicine. :))
However the following is a starting point at least for AVB.....
With AVB recently upgrading its copper by first tripling and then doubling its global (all-inclusive) copper resource, I wanted to try and document a simple picture and tie it in with the Scoping Study.
As of February 2010 Antas South had 66,100 Tonnes of copper metal at a cut-off grade of 0.3% (Average grade 0.83%). It was listed as Oxide and Transitional. Now this figure included the HGZ of 24,500t Cu derived from 210,000 at 11.65% avge. page 5 of...
Referring to the Scoping Study for mining the HGZ only....
The mine plan consists of two parts. 1. HGZ Direct Ship Ore 2. The rest of the HGZ .
Importantly its validity hinged on the assumption that further exploration would upgrade this 210,000t of HG material to 300,000t of HG material. (That is, averaging around 11% copper).
The HGZ resource was modelled to go up by 43% (300/210) from its existing state. The big question is.. Did further exploration confirm a 43% increase as anticipated???
If so, then this Study is valid (if outdated)... and so is my previous DSO exercise of plugging in new figures for $Cu/lb etc
In perspective, the DSO is 20,000/7,977,000 .. so only broadly 2.5 tonne in every 10,000 t of mineable ore at Antas South is DSO. Remarkably small.
OK shifting ahead to the revised JORC of February 2012.
AVB now has 85,000t of copper metal at Antas South, compared to 66,100t before. An increase overall average figure of 28%.
Conclusion :
AVB must confirm their Feb 2010 prediction that the HGZ has gone from 210,000t to 300,000t or better (a big 43% increase). Then analysts can work with the Scoping Study to best assess the value of the HGZ currently.
Of obvious concern is the recent AS upgrade of 85.0/66.1 or 28%. This NOT a 43% increase!! However that is not to say that the HGZ did not increase by 43% to its 300,000t and the rest of Antas South by something less than 28% to arrive at the overall figure.
Some Good News
1. Precious metal credits. I suggest the production cost of these pm credits is mostly absorbed into the costing for producing the copper. The pre-strip, digging, grinding and flotation costs would be included in the $/lb production cost for copper. Thus the unpredictable pm's scavenged from the bottom of the flotation tanks are a huge bonus, especially gold. Their value is higher than gold from a gold mine, likely having a very low attributable production cost.
Reportedly AS has 65,000oz gold. Assume(!) gold uniformly distributed into 10.08mt of mineable ore.
The DSO has 65,000 x 20,000/10.08m = 120 oz gold. HGZ has 1791 oz. (it may be that HG material has higher gold, but it is just a basic model)
2. The feasibility study for DSO shows a period of six months from starters gun to digging, then only twelve months to complete. It is an 18 month exercise only, not two years. So get going and DIG!
3. A new Scoping Study, preferably the full DFS is urgently required. Ideally it should include any expansion of the HGZ to wherever it is now, a full production plant that accommodates the entire current resource.... the small HG deposit and masses of boring 1% stuff too. Simply grinding through the HGZ for 6 years is so far out of date it is not funny, and surely does not represent what AVB proposes now?
Finally, The Six Times JORC assertion tested (triple, then double resource)
2010 no Gold disclosed, but 2012 Antas South says 65,000oz which one assumes was always there. Then after AN and PB there is 389,000 oz gold 389/65 = 5.98 YES!
.. plus 465,000 oz silver at $20/oz return = $9m
OK.. sorry to be tedious with figures again, but the conclusions are interesting I hope.
It might help to see where they are going with this mining. Other than the DSO, the old Scoping Study should be thrown out and a major relevant document produced that is a Real Road Map for the future. Exciting.
At the moment AVB is kinda drifting.
A Vision is needed, Action too...and a start at that easy DSO!!! Maybe it is coming very very soon!?
.. sorry for being long-winded... my apologies PP
AVB Price at posting:
9.8¢ Sentiment: LT Buy Disclosure: Held
