In 2017, AVB commissioned Global Mining Research to undertake an independant study of the Company.
This report, dated 18th September 2017, ran to some incredible 29 pages.
It is still there under Broker Reports on their website.
Their disclaimer on page 1 says they do not provide a share-price target. i.e. they are not brokers.
As it is internally funded and not done strictly like a broker, there is some latitude to connect with reality more.. and I find this comes out in the report. You are not worrying about a crowd of baying shareholders, to get you if you are on the high side and overprice. So I personally attach more credibility to this Report.
On page 8 (LHS column) of this learned document, it says GMR values AVB at US$584 unrisked. Perhaps a lot of this was due to them "valuing" CentroGold on page 1 at quote "a high US$181m" or A$235m in today's terms. OK.
It bases this on the assumption, constantly stated throughout, that copper is US$3.00/lb.
At an exchange rate today of A$1.30 then this translates to a value of A$759m for AVB
(2457m basic AVB shares issued according to Comsec)
As far as I can see, since that date, copper has strengthened, exciting Pantera has appeared, the Centro permit has become certain and will appear any day (my opinion), Centro drilling has greatly exceeded expectations.... and so on.
Yes they had a poorer quarter at AN, but that was explained, and when you know you are going to have an unimpressive quarter you may as well make it really bad and be done with it.. go out and buy all your coffee for the year and expense it in that quarter.., etc.
Anyway... 759,000,000/2457,000,000 = 31c
Yes, 31 cents Australian
I am delighted/grateful and humble with my 17c... BUT that is irrelevant in this post...
I am trying to objectively (no emotion) get a feel for :
1. What might be a further bid, and
2. The chance of a bid
So let us compare 17c with 31c (or better).
That 31c has no additional allowance for the exceptional Vale deal for Pantera, which everyone raves about and must have added a further substantial "something" to AVB's worth.
Any potential bidder would certainly be aware of the GMR report, where a lot of their due diligence is done for them.. and the positives that have emerged since...
Anyway, enough from me, and I will leave it open to other posters..
1. Based on the above, for me the chance/probability of a better bid is very high
2. It had better not be a bid at 18c or 19c
3. It explains why Glencore might have told them what they could do with their lousy 17c
4. The comment by the interviewer of Andy Cole who said Glencore are suggested as being "well aware" of the true value of Avanco's assets. I bet they are.
It is all great fun... and more fun to unfold I suspect...but the above respected GMR report throws it all wide open.... and explains a lot of things.
Cheers, PP
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