conditions precedent, page-26

There still appears to be some confusion amongst some posters about yesterdays announcement. To me its pretty clear that management wanted to inform the market on progress to funding stage 1.

The thrust of the announcement is stated in the heading and first paragraph -


"KEY TERMS AGREED ON US$58M DEBT FACILITY FOR ANTAS NORTH COPPER MINE"

"The Company is very pleased to announce that it has obtained from and agreed with Banco Votorantim S.A. (Banco Votorantim) a proposal with a debt facility in the principal amount of up to US$58M for the development of the Antas North Copper Mine (Stage1), subject to the terms proposed therein".


The way to look at this is that its an in principal agreement, subject to certain conditions being met, which Avanco are comfortable about meeting.

Think about this, how could Avanco management confidently and professionally go to the market to seek the equity component of funding without knowing exactly how must the bank require? With this "in principal" agreement they can do so.

Further into the announcement it clearly states that "The main conditions PRECEDENT FOR THE DRAW DOWN OF FUNDS include.....". To me, this appears as though the facility can be easily set up when approval conditions can be demonstrated as met, final sign off will be provided.

KEY point here is that KEY TERMS ARE AGREED on the $58M facility. It means what it says. The challenge for AVB is to now work on best method to raise the equity amount and have stated "Several Term Sheets inclusive of Metal and Royalty Streaming options are being examined". I don't believe it should take too long to for them to work this through.