I think that was the game plan for all of us. Buy in for the copper, IO is a bonus. But as I said earlier, the word 'concurrently' seems to have changed the equation.
If there is $100 of copper in the ground, you wouldn't bother taking it out if it costs you $100 to buy a shovel and wheelbarrow. But if you could rent a shovel and wheelbarrow for $20, you probably would.
I think AVB management have had long enough to ponder what CAPEX is required to mine the Cu. At the moment, it probably doesn't look attractive if they have to raise the CAPEX themselves.
But if Vale were to put up the CAPEX for their IO project, then it would. $40m to a small cap like AVB would also give a big kick to the SP, even at these levels.
If anyone is in touch with management, I would seek very clear clarification of what was meant by 'concurrently'. To me, this is an extremely important factor.
Then I'd start figuring out if I would go long in IO, to decide whether I invest in AVB for the Cu.
AVB Price at posting:
9.7¢ Sentiment: None Disclosure: Not Held
