This was a VERY significant Ann on many levels...AVB projected...

This was a VERY significant Ann on many levels...

AVB projected cash flows at AN we now know to be highly sustainable from Met. perspective... notwithstanding some here incorrectly foreseeing low Met recovery rates as low as 85% at PB...now correctly estimated by scientific analysis at the more realistic 93-95%...AVB is definitively giving serious thought to its Gross Revenues streams relative to projected Capex on plant and equipment required and Opex on production with a greater capacity to treat PB ores hence securing better off-take sales agreement...This Announcement also definitively focuses AVB on production ...I have known from my discussions with TP in the past that AVB has always been serious in their intentions in converting AN and AS assets into a working mine...

Any talk of MW undermining this equation is seriously underestimating the good business acumen of MW...this guy put these assets together in the first instance and proffered a serious input of cash to keep AVB afloat a couple of years ago...With or without the Met. Results Xstrata effectively blocks any T/O...but as a result of these exceptional Met. Recovery: the offer price HAS gone up significantly... inconsideration of the increasing scale of economies for the growing global resource and highly economic recovery rates...The next CR or part there-of plus Vale’s prospective capital input and/or another potential suitor, AVB will go into production...too good to miss this opportunity...the re-rating of AVB SP has begun...Preliminary Economic Analysis, Mine Plan and Time Line Schedule due soon and hopefully before the AGM the SP will start approaching the real insitu in-ground valuation based on the raw data available of approx. 30 cents...

Now for the Current NPV...

So it appears from current rapid growth in global JORC numbers at AVB will IMO lead to building a US$150mill plant processing 3 million tonne per annum at AN and feed AS's HGZ ore into the mix to increase and even up grades at AN...Eventually PB ore although Met. changes would be required...So now based on more correct inputs... valuations can be made to assess DCF values for more accurate NPV...So if Vale completes the TN transaction and extension made to the Trial Mining Licence AVB will be in mining production business, within an 18 month time frame...Net smelter returns [less 3% royalty] and revenue recovery of 95% of the copper price would then be expected which would be inclusive of transportation...assuming then AVB aims at 50,000 tonne of concentrate per annum for 10 years and with addition of Pedro Blanco ore and rapidly increasing JORC number growing...So AVB is hopeful that Vale will pay $ 20 to $30 Mill in November 2012...so Vale money triggers the Mine start-up or the CR can occur via the Smelter deal of Cash for Conc. terms...

Either way AVB directors should be very confident AVB will become a mine producer 18 months out...with the new Pedro holdings added, means that it is increasingly likely that AVB does have prospects of finding at least 3 large copper resources within 270,000 hectares of ML’s...Assume 3 million tonnes ore production per annum producing 50,000 tonnes of concentrate per annum with addition of AS HGZ ore...for 10 year LOM with $1500 per tonne OPEX to mine...Net Smelter Return of 95% of copper price inclusive of all costs...$8000 copper price av. over LOM for concentrate minus royalties...Assume 150mill for CAPEX coming from sale of TN and/or smelter deal and/or CR... Assume 25% federal Brazil TAX [inclusive of tax deductions depreciation; zone allowances; rebates etc]...Assume then...[US$8,000 average over life of mine per tonne] times 97% – $1500 [OPEX] times 50,000 tonne of concentrate for 10 years... plus $25 mill from vale...minus $125 million for plant pay back inclusive of approx 10% interest....It strongly appears we will have an average global metallurgical recovery at 95% plus we still have a total of 720,000 tonne of contained Cu in the ground or 650,000 tonne of payable Cu equiv. inclusive of Au/Ag credits…With the Cu price averaging above US$8000/tonne over the life of mine and assume TCO of US$1500/tn. inclusive of all Mining, Milling, General Admin...i.e. life of mine Opex of US$1.10/lb...

A more accurate NPV valuation per share from the 1.113 Billion fully diluted share base can be calculated using SFR’s discount rate of 8%...inclusive of all deductions... Assume interest charges on advances of loan made with the smelter at 10% over 5 years. So less $125M and a NPV of future project revenue streams over a now very conservative mine life of 10 years since with the addition of Pedro B mine life would potentially double...and assume a further 50% dilution for CR... With SFR’s discount rate of 8% over 10 years, the projected cash flows are worth $2,244,700,000 today, being greater than the initial $150Mill paid...the resulting positive NPV [inclusive of ALL costs] is $2,055,776,456 which indicates that pursuing AVB’s projects with a IRR of better than 94% is very economic, with TCO potentially lower than calculated here...

This is equivalent to a NPV per share based on US$8000 per tonne from 500,000 tonne of Cu delivered to smelter over 10 years...
@...AU $1.23 cents per share...fully diluted...

These figures present a solid case for a multi-bagger outcome for AVB...as it develops to a mid tier miner 18 months out...some assumptions made here, so dyor...