vale deal and others to be done very soon!

I just cant go past this statement by the company in their annoucment on the 17/08/2010.

The Company has received SIGNIFICANT interest from groups seeking to jointly explore its projects including the Trindade North Property which is prospective for high grade Carajas style iron ore. The options available to Avanco are now being shortlisted and adjudicated. Negotiations are at an advanced stage and strong news flow on these and further Carajas Transactions is expected soon.

Now if that doesnt get you excited then nothing will.

I can not help but think that VALE will want to take over AVB at some stage especially if there first round of drilling at the Trindade North Property turns up good results. I mean why would they pay AVB $40 million just for that project when currently they have a market cap of only $14 million. Vale would be better off buying the whole company which at the moment as its sits without any further good results they could proberly buy for that amount now!

I mean the high grade copper project that we are awaiting further results for is worth $185 + million $US as it is without any further upgrade.

They currently have a JORC of 210,000 tons @ 11.65% so

210,000 tons x .1165 = 24,400 tones of copper

24,400 = 53,792,791.97 LB

53,792,791.97 x (current copper spot price) $3.44 US$ per LB

= $185,047,204.37 US DOLLARS in ground value!

Its going to be a low cost production due to the high grade a shallow depth! This is without any expected upgrade as the company states there will be one. The company is talking of an upgrade to 300,000 tons at a similar grade of 11.65% copper. If this is acheived we are looking upwards of $262 million US in ground value!

Even at a current inground value of $185 million, plus the vale $40 million deal, plus the Serra Verde copper project and the Turo Nickle project and $4.5 million in the bank and all the interest the company is having in their projects from other companies, AVB having only a market cap of $14 million is currently very undervalued. Ofcourse out of the above prices you need to take out costs but the nature of the copper being very shallow is a huge advantage and brings the cost of getting it out the ground alot cheaper.

Just going back to VALE all of the above and the fact that VALE already have all the equipment needed to extract the minerals would make AVB very attracktive to VALE, and like someone else said ealier, VALE didnt entre into the Trindade North Property project with their eyes closed they would have a fair idea what the tenament holds and the fact that its right near their own worlds largerst iron ore mine owned by VALE its sure to produce some very nice upside to AVB.

Im in and spewing i didnt come across this little company earlier! Still better late then never!