significant resources growth at antas north..., page-82

Hey BH buddy,

yes IMO it will all probably happen... looks great on paper!..but what I am suggesting is that it is just not a Certainty to occur in accordance with the stated schedule. TP has recently indicated that Vale wants TN, even suggesting the strong chance of them grabbing it all early. I have big faith in TP! He has gone out on a limb a bit.

BUT... If Vale wanted TN iron desperately then they should be lining up with their chequebook right now, instead of which AVB is suddenly talking about DSO (plus rest of HGZ) to get cash to start TN. IF a cheque for $40m (say) was coming then why suddenly shuffle DSO/HGZ to the fore when it has been highly unmentioned for so long? So my bet/guess is that there will be a $1m progress payment, in the spirit of the Agreement. However at a time when cash conservation is becoming more important, Vale may want to defer its final sizeable AVB payment. In which case it may(!) in 12 months simply tell AVB to get in line. Like it or lump it. Not default... defer perhaps.

So... yes big Vale payment will probably happen. In fact almost certainty.... BUT not absolutely certain. This consideration has to be weighed in to any assessment of AVB.

Until the money is in the bank, it just cannot be counted on.

The royalty payable to AVB appears based on what was drilled and proven up recently. At some point they stopped when they were satisfied but how much was actually JORC-proven? The threshold was passed sure.. but by how much? Did they drill just enough to trigger the deal? I like to talk about $40m, sounds terrific, but again it may be nothing like that! It could easily be as little as $10m, and with AVB growing with drilling and mining.. where does $10m go?

It is just a perspective, a viewpoint.. not a criticism of AVB ......something to consider and weigh in. Big Vale money? Probably, yes.. but not certainly. Yes, $40m could be announced tomorrow..... but... need to stay grounded for now.

I just want to know where the money is coming from in the short term to drill at $10m/year... and set up a mine at TN... or even at Antas South for HGZ. The Argonauts (broker report) say a capex of $250m to do Rio Verde and Pedra Branca. $250m !

So if they want some nice short term cash they had better decisively get after that DSO/HGZ right now! and stop talking and messing around.

The market is punishing them. Maybe it looks at cash in bank and burn rate, and like others, prices them harshly? Maybe it is tired of semi-predictable drill results, and wants real mining, even small scale? I do!

Just one viewpoint to ponder .. that I do not claim as correct especially.

.. and after all, we posters are here to dissect AVB, give it some truth and perspective based on fact, not to talk it up or down.

But most of us here have big FAITH. I have heaps and that is why I believe Management have answers.. even if we are mostly in the dark!