Certainly find this one a bit of a puzzle....cap $8.5m cash $4.5m.
.....surplus cash flow from their JORC surface copper, of $8m to 15m PER ANNUM over 6 years (Ref : Their ASX release-feasibilty study 8 Feb, 2010)...
They were out on Fridays with a quarterly report....showing a land sat image of the biggest iron ore mine in the word (owned by Vale)...the boundary of which, is some 4 or 5 kms from AVB leases.
A little more info follows on this giant Vale mine......(and some further explanation, at the bottom - for my frustration over the share price)
Carajs Iron Complex Thursday 29 and Friday 30 April, 2010.
The Carajs District contains known reserves of the order of 18 billion tonnes with an average grade of 65.4% Fe. All of these are controlled by the Vale (previously known as Companhia Vale do Rio Doce - CVRD), who currently have four active mines, which constitute the N4 and N5 operations. Annual production for the year 2000 was 47.6 Mt grading around 63% Fe. Because of the high grade, no concentration is undertaken on site at Carajs, although it is beneficiated to produce sinter feed, pellet feed and special fines for direct reduction as well as lump ore. All of this tonnage is transported by single track rail some 890 km to the port of So Lus in the state of Mananho on the Atlantic coast where a new 6 Mtpa pellet plant is located.
The reserves are distributed in a number of deposit groups, the largest of which is the North Range with - 6200 Mt @ 65.8% Fe, 0.038% P, 1.0% SiO2, 1.05% Al2O3, 0.45% Mn, 0.01% S, 0.02% K2O, 0.03% Na2O and 1.88% LOI. The other reserves include: South Range, 35 km to the south - 10 400 Mt --------
The Carajs Mine is the world's largest iron ore mine and is located in the state of Para in Northern Brazil.
Fully owned by Brazilian miner Vale (CVRD), the mine holds 7.2 billion metric tons of iron ore in proven and probable reserves.
The Carajas region boasts the richest reserves and concentrations of iron ore anywhere in the world and was discovered entirely by accident in the late 60s when a US Steel Helicopter was forced to land on a hill in the area to refuel. Surveyors on board noted the baron state of the hill and subsequently discovered that the iron content was as high as 66%.
Other mineral deposits were discovered later; Carajs is rich not only in iron ore but also ores for manganese, copper, tin, aluminium and even gold.
"The Carajas ores are found within Archaean iron formations."US Steel wanted to develop the Carajs iron deposit but the Brazilian Government was unwilling to hand control over to a foreign company. Brazil is currently the world's largest exporter of iron ore with annual production of over 200Mt.
In 1970 the Brazilian government opted instead to create a joint venture company, Amazonias Minerao SA (AMZA), of which 51% was owned by Vale and 49% was owned by US Steel.
US Steel subsequently withdrew from the joint venture in 1977 by selling its share to CVRD for $55m. Vale produced 237.9Mt of iron ore at the Carajas Mine for 2009, against 301.7Mt in 2008.
In 2007, Vale approved an expansion project of the Carajas mine. The $2.48bn project, Carajas 130, currently under way, is expected to add 30 million tons a year to the current capacity of 100m tons a year. In 2009, $798m was diverted towards the project. The project will oversee the construction of a new plant including primary crushing, processing and classification units.
Significant investments in logistics will also be made. Originally scheduled for completion in the second half of 2009, the project was postponed. Commissioning has been re-scheduled for the first half of 2012 based on the concession of environmental issues. As of April 2010, work on the fourth car dumper as well as the buying of equipment is making progress.
To compensate for the delay in the completion of Carajas 130 project, another 10Mt/y brownfield project is under construction in the northern range of Carajas. The project, scheduled for completion in the first half of 2010, will increase the capacity of the current iron ore beneficiation plant by 10Mt/y.
Geology and reserves
The Carajs ores are found within Archaean iron formations. The volcanic sequence has been weathered to a depth of between 100m and 150m, while oxidation is observed to a depth of up to 500m in the BIFs of the ore zone.
The upper 80% of the reserve comprises a soft, friable enriched limonite near surface passing down into hematite to a vertical depth of around 300m. Hematite rich, but harder and more siliceous pods occur within the soft hematite, but also as a transition to the un-enriched BIF at depth.
"Vale produced a record 296 million metric tons of iron ore at the Carajas Mine for 2007, a 12% rise on 2006."The Carajs District contains known reserves of the order of 18 billion tons with an average grade of 65.4% Fe.
The reserves are distributed in a number of deposit groups, the largest of which is the North Range with - 6,200Mt @ 65.8% Fe, 0.038% P, 1.0% SiO2, 1.05% Al2O3, 0.45% Mn, 0.01% S, 0.02% KO, 0.03% Na2O and 1.88% LOI.The Carajs District contains 7.2 billion metric tons of proven and probable reserves as of 2009 estimates.
____________________________________________________ So why get a bit frustration over AVBs share price:
....see my post on United Minerals (UMC)from 2006....when that company first announced acquisition of leases adjoing the 4th largest iron ore mine in the world (BHPs Mining Area C).
UMC had a cap of $48m at the time (they had Bauxite-but focus and big subsequent share price movement was because of iron ore).
See post from the 2006 post...I could NOT believe the cheap $48m market cap for UMC. (Subsequently UMC was taken over by BHP for about $140m....or $1.30 share price.
_________________________________________ Posted: Dec 19 2006
May gap a little tomorrow......but even if investors chase the gap.....I think this stock has very high and exciting short/medium term upside.
Their Pilbara iron ore tenements adjoin BHP's 43 mtpa Mining Area C operation. Mining Area C is the second biggest iron ore mine in the world (after CVRD's Carajas operation - and even ahead now, of Anglo Americans huge Sishen iron ore mine)
After a fight with FMG in the West Australian Mining Court.....UMC acquired the tenements right in the heart of the Pilbara. Rock chip sample results released today are quite amazing.....but I guess thats why BHP and Rio have their big mining operations right here. ------
Fully diluted market cap of $48 million.....but they have $4 million cash and mid 2008.. 0.20 cent options would generate $6 million from these fully diluted calculations......closed today at 30.5 cents....look for 55 cents quickly. ________________________________________________________
AVB Price at posting:
1.7¢ Sentiment: Buy Disclosure: Held
