conditions precedent, page-81

Cheetah wrote: "If you'd care to explain, I'd be interested to understand better your views on why AVB wont build a mine."

Hi mate,
This is merely my opinion, but I have drawn my conclusion based on these factors. In a nutshell:

* No measured reserve for Pedra Branca. The ENTIRE 39mt of the Pedra Branca resource is INFERRED only - not even INDICATED.

* Pedra Branca resource has grown from an INFERRED resource of 14.4mt when acquired in Feb-12 to 39.5mt today but Mr Market has said "so what?" - and the share price has dropped 36% from the 10c level in Feb-12 to current levels. People keep waiting for AVB's "SIR/SFR moment" but the way I see it, every time SIR or SFR updated drilling results the share price would go nuts.

* AVB keeps upgrading its INFERRED resource for Pedra Resource but Mr Market just isn't interested - and he certainly isn't going to punt his entire Super Fund on it. There is a message there for us....

* In the meantime, the Antas South discovery from 3 years ago has only managed to establish a MEASURED resource of a mere 0.59mt. When first drilled, this was the only time the AVB share price ever went for a meaningful run. Nothing since has managed to propel the stock forward and then HOLD any gains. The flurries in 2nd Half 2011 and 2012 have never been sustainable.

* $13.9m of cash in Dec-11 now down to only $5m and needing to find $12m so they can get the $58m loan (although on this dot point - I expect they will get the cash).

* Management Track Record (Good Deal makers - tick; Can they Build a Mine? - Not real sure, but I respect their efforts & intentions - no tick though).

* When I pose myself the question, why would Xstrata let this deposit go when so many people here can only wax rhapsodic about it, I take pause but then recall the market's CONSISTENTLY UNDERWHELMING responses to the resource upgrades. I conclude (reasonably, in my view) that people in the mining game - much smarter than us here - have well-rationalised views on this resource/project.

* My experiences in the market having followed speccie miners for some 18 years now. It is a TOUGH gig to build a mine and keep it producing. For every FMG, SIR, SFR, PDN & PNA there are 95 that never make it - probably more.

Anyway Cheetah, just my assessment. It's a repetitive post for others here and I apologise for that but I thought your question deserved the courtesy of a response.

Good Luck to you and others and enjoy your week.

Coop