Ann: Extension of Time to Hold AGM, page-167

After all the good weekend ideas and discussion, I might briefly summarise some thoughts..

Rule 10.1 refers specifically to an asset sale/acquisition involving a significant shareholder at greater than 10% of whom there only appears to be three suspects.. Glencore/Xstrata, Appian and BlackRock.

The asset needs to be greater than $7million in value in AVB's case. (greater than 5% net equity)

As funding for AN is desperately needed, it is a major sale or transfer... not acquisition.

Only three assets were identified that could return the funds needed, say $50m

1. Antas Development. Glencore could be interested in purchasing AN/AS as a strategic move into the Carajas, establishing a presence there as a miner, with a longer term view to picking up PB etc in due course. However Antas is still considered to be an unfunded Development and not a profitable and operational mine and would therefore be valued at a massive discount to what it could be in 12 months as an established profitable mine. It might not be in the best interests of shareholders to sell at this stage. However it would be later on though.

2. Long Term Offtake or Short Term Pre-sale Agreement for concentrate. BR and Appian would presumably have no interest in this. It is difficult to see Glencore wanting the small amount of concentrate from AN. What on earth would they do with it? There is a Glencore "custom" smelter in Altonorte in Chile serving their local mines. A long-term contract to take concentrate would involve a complex document setting out the basis for Contractual Prices. It would need to have some clause for pre-payment as the $50m is needed right now. Such a deal would need acceptable logistics and Glencore Board Approval. It is quite possible, but messy considering AVB only wants $50m, less than one years concentrate value. No shortage of takers for its excellent concentrate.

3. A simple revamp of the original (Proposed!) BlackRock Cash-for-Royalty Agreement. I favour this as the most likely. That is, perpetual royalties in exchange for $50m. Not a loan. A sale of an asset. As said, if $12m equals 2% NSR Cu then $50m equals 8% NSR... of Everything, now and future.!?? Yes, 8% of PB too. A loan you can pay back but a royalty is a permanent owing-situation... you owe them a royalty forever.. it is not selling shares/equity exactly but it could be viewed that way. Even if a mine makes a loss or only a small profit, you get your chop as a prioirity over others etc...

It devalues a Mine in the case of a Sale. But no long-term pain, no short-term gain of $50m. Perspective I guess.

4. BR may offer a deal involving a palateable royalty of 2% for $12m cash as before, plus a loan for the balance, simply repayable from concentrate revenue. However the BR Crew adore perpetual royalties so maybe the answer is between 3. and 4. say 5% permanent royalty.

It would need to be happily (as opposed to grudgingly) approved by Glencore and Appian. After all Glencore/Xstrata passed a lot of AVB's tenements on to it. AVB want good relations with Glencore.

It is supposition of course, but makes for solid discussion... which in the end allows a better assessment of where the SP might go.

Whatever happens it will bring in money to build a profitable mine at AN, and allow funding of PB from real profits from AN, or what is left of them after all the third-party royalties.

Any deal has to be viewed as a Good Deal at present surely??? Desperate times.

Should give a boost to SP.