2012, page-82

Hi all,

My discussion today with TP is to confirm my understanding of key parameters from AVB scoping study for High grade copper project phase 1.

As I said previously, the high grade project will place AVB into a low risk profile category considering the current conditions and uncertainties of the markets (GFC, Europe, etc..).

IMO Rio Verde project will be AVB's main focus at this stage as the company rely on the high grade project to expand AVB growth.

Currently AVB's high grade strategy focuses on JORC compliant 210,000t @ 11.6% Cu, but things could change as JORC high grade resources will be increased significantly considering a recent increase of Antas South HGZ strike length.

Economic Performance
Following are positive points I could see for the "starter" project:

* A low Capex with capital costs advantages due to location:
- Admin and on-costs are not expected to be significant as benefiting from the project's proximal location to the Carajas principle mining centre of Parauapebas which is less than 30km away.
- Parauapebas is an abundant source of skilled labour and a main centre for all necessary mining support services.

- The benefit of the "out-of-pit” direct saleable (DSO) component reduces start-up capital and provides the Company a minimum risk implementation scenario where revenues from out-of-pit sales will self fund the construction of the flotation plant and associated site infrastructures during the second year:

--> Pre-production Capex of ~US$2M.

--> Plant and infrastructures ~US$9M to be funded from early cash flows.

* Sales premiums for delivering copper oxide concentrates to domestic customers.

Transforming a high grade discovery into a low-cost underground copper mine

Project profitable with low risk:
- Generation of strong cashflows
- Low cash costs will generate profit irrespective of the business cycle:
--> Cash cost (OPEX) or FOB at Smelter Cost = US$0.86/lb Cu

Peers comparisons of C1 Cash Costs

World mine production Cash Costs will be increasing due to depletion of DSO (and also high depth drilling)

Short-term catalysts:
- Results of drillings (tonnage and grade)
- Maiden JORC resource update

Just be patient.

Cheers,