future movements., page-79

Copper took a bit of a beating overnight. The beauty of it is that with AVB's low cost of production we will still be looking good.

Stage 1 only:
Volume of copper 26145204.00
Volume of Gold 7798.00
Cu price per lb. 3.037
Au price per oz. 1327.00
Interest charges -7000000.00
costs -25000000.00
shares on issue 1114000000.00
cash receipts 89750930.55
Earnings 57750930.55
earnings per share US$ $0.0518
earnings per share A$ $0.057


These are rough calcs only and there will be additional expenses such as admin and exploration but good for an idea of things. This value is why I see 40c as an easy target once AVB have smooth production from stage 1. My time target is xmas 2014 but I will take it when it comes. Keep in mind that they do not need a full mining license to build and start this plant running. The current, recently renewed trial mining license is all that is required at this point. They just need confirmation of the $12 million to ship in the plant and get to work. There is also the prospect at stage 1 of deeper drilling revealing more copper as the drilling was curtailed when the decision was made to build a mine with a low risk operation and continue drilling at a later date when they could be drilling from the pit floor, saving millions on costs. These types of decisions reveal to me a well experienced team focussed on mining and creating a significant company. There is also the ore, some at 50% copper which they'll pick the eyes out of at Antas South.

The following is a very rough calc based on getting Pedra Branca up and running and is part of the reason why I have a $1 plus target 3 years out (using today's copper and gold prices). I also expect that in 3 years approximately when we have 2 stages running that the price of copper will be far more robust as I think by then we will see world economies having fought their way out of the downturn, copper inventories will be running low as there will have been minimal investment in capital works for mines or greenfields exploration so the price of copper should be on the rise as well.

Stages 1 and 2 running:
Volume of copper 50000.00
Volume of Gold 33000.00
Cu price per lb. 3.037
Au price per oz. 1327.00
Interest charges 10%? -7000000.00
costs excludes admin -105000000.00
shares on issue 1114000000.00
cash receipts 378468400.00
Earnings 266468400.00
earnings per share US$ $0.2392
earnings per share A$ 0.26
PE 12.00?

Avanco are working and own numerous tenements in one of the most prospective regions on earth. They already have several new areas that have undergone initial drilling, Serraria and Sao Jorge that show promise. They have the 9 km strike of Nova Esperanca to look forward to. It is possible that there is a very. very large open pit mine waiting for AVB at Nova Esperance but it might be an expensive drilling campaign so will need some serious cashflow first. They have numerous other leases that are cause for excitement as well. So they have the ability to replenish their reserves as they mine. They have pulled together a very capable and experienced management team with all of the requisite skills and experience from legal, entrepreneurial, metallurgical, technical engineering and geological arenas. They have all done this journey before, repeatedly. They don't over-hype their company with press releases over every single drill hole, they are very much focussed on mines rather than the press. All of the above is why I see $1 as a possible and probable outcome. In fact, once we see stage 1 $12 million shortfall officially allocated I will personally see $1 plus as inevitable because they are developing this company with a low risk approach. So I think the end game is effectively being played out now and this company which does not have a habit of exaggerating is saying they are expecting the money within 8 weeks.