Just playing with numbers at night....AVB Market Cap at 9.7c is...

Just playing with numbers at night....

AVB Market Cap at 9.7c is $76m (allow 780m shares)

Assume $20m in bank still.

Therefore the market now values AVB copper in ground and blue-sky prospects together at 76 - 20 = $56m.

Feasibility study of Feb 2010 shows an indicated profit from mining HGZ incl DSO of US$57m ($A63m) with no mining of later 50% material and copper at US$3.00/lb.

What value is nominally placed on Trindade North which has not yet paid a cent and is merely prospective for cash. Maybe $5m ?

Assume best case, and Vale move quickly to acquire TN and pay full amount potentially due of $40m, no humbug.

Market should value AVB then at 76 - 5 + 40 = $111m purely on the basis of the raw cash coming in.

$111m / 780m shares = 14.2 cents per share (undiluted by options)

(Progressive exercise of BOB's next year would pull that share price back.)

1. It gives some Perspective so that if it all happened tomorrow, then a rise to 14.0cps could be expected. Anything dramatically above that could be reasoned as a market over-reaction and a sell signal in the hope of buying in again later... well, perhaps!!?

2. Taking cash at its face value, the share price today values AVB copper in-ground and prospects at less than the HGZ Feb 2010 feasibility study profit of A$63m. And that is way out of date.

3. Taking flurnts analysis purely as an indication only, Antas South has gone from 66,100t of copper to 119,000t copper and this is admittedly out of date. So just as a guide say the copper quantity has roughly doubled. The copper price has gone from $3.00 to $4.50.

4. Going back to the study, plug in US$4.50/lb, double the quantity throughput,and you get a suggested profit of roughly US$245m(A$233) Not A$63m!! Take this figure and plug back in to valuation.

AVB sp = A$233m Antas South mine profit + $20m cash now + $40m (cash soon) +$0 for all other tenements
and divide by 780m shares EQUALS .... 37cps !!

Sure it is simplified and ignores lower grade copper etc etc.... but it is a guide only. And after all it is better for SP to be undervalued than the other way around!

but hey, 10cps is pretty pathetic just the same, at least on that basis.

... just playing with numbers (unverified of course) to see what emerges.... interesting stuff though !