avb director attacks lazy companies

Director Luis Azevedo of Avanco (Advancement) attacks 'lifestyle companies' (translated from Spanish).


The geologist and lawyer Luis Azevedo been PDAC , a leading global event that brings together investors and prospectors , and proved that the funders of research projects and mining are much more demanding and want results . This is the first part of the article . The second part will be published tomorrow ( 7 ) .
Amid the Carnival and before the World Cup , many explorers , economists and Brazilian lawyers , mixed with tourists traveled to the cold of Toronto , most in search of resources , once again leading results and research programs , behind investors .

Found this time a business environment better than in 2013 , but this does not necessarily mean that succeeded ! Why? Well , times have changed .

The private equity funds and financial institutions are increasingly demanding . No longer willing to fund grass roots , want to substantially advanced projects and they can go into production within 3 years. No longer are willing to fund equity , wanting to society in income rather than profit .

The new method then in vogue , are investments royalty and metal streaming . The reason , they explain , is very simple .

" We funded Juniors and Majors in the form of equity in recent years and have received? Very few dividends ! This huge despite high commodity prices and the valuation of shares . So the result was that we liquidated our funds , unable to return profits to our investors . Plus, we realize that the resources were used in long-term investments and many businesses were actually lazy , increasing their costs in proportion to their revenue . So now we want to receive in sales of minerals , we go above the line and swings out from the bottom . "

With the devaluation , in some cases , more than 70 % since the 2008 crash , which is seen not only on the TSX , but in all mining markets , is a mixed fearful of new shareholders and shareholders who are in positions prior to 2008 , furious , saw their positions being slaughtered enormously in recent years .

Some companies Juniors , desperate recourse to any kind to survive and come to use such resources - streaming royalties and metal - without even having an economic study bankable allowing them to determine if they could afford such costs . If they ever will produce , will inevitably bled their revenues and dividends , and may even derail the recovery of these deposits .

The market , executives point , is no longer a Taurus as depicted Wall Street , but actually looks more like a tiger . According to one of the executives with whom we spoke , he is now agile, elusive , stealthy and flees when confronted with the lowest risk or adversity.

The urgent need for better solutions market funds . But the private equity funds , in turn , are determined to re-educate mining companies and generally complain of these companies and their executives .

Want more competence and competitiveness. Say and point out that there is no room for idleness , high costs , overheads , first class flights , or astronomical salaries and bonuses that the secret is efficiency.

The last message is that there is no point coming to Toronto and promise to return the next year asking for more money and offering more in exchange for promises them. Have to deliver ! !

PDAC been in this , watching one of Brazil squad with relevant and impactful results . Participated in more than a dozen meetings and heard in almost 80 % of them that the secret is to promise to bring X and 2X .

Funds already know executives who will make it work and money is not always very sure of the result . They want executives who strive , who return to work against a maximum of minimum cost and these differ from those executives who use the resources to pay and maintain their status . Such companies are called by them "life style companies " , for which markets are completely closed .


Luis Azevedo is a geologist and lawyer, member of FFA Cool Suport for Mining Companies, Director and founder of the Brazilian Association of Mineral Research ( ABPM ) and member of the board of Talon ( TSX ) , Advancement , Avenue ( ASX ) and Brazil Minerals ( OTCQB ) .