Its days like these where profit taking made by buyers who jumped in when AVB was 7.8c and have made a nice tidy profit on a down day!
Remember that AVB has now half a kilometre of High Grade Copper Zone in the South Antas section of the tenement! With a second HGZ copper deposit just uncovered!
There aren't many announcements out there on any stock exchange that continually find such high grades of copper!
If you look at the area being drilled, it is a small section of the overall real estate controlled by Avanco, in blue below!
They are also 3 months away from a payment from the biggest iron ore miner in the world Vale where an agreement has been signed for a payment of between $10m and $40m is to be made by Vale to Avanco for the right to dig up the iron ore in Avanco's tenement.
IMHO AVB will use this cash towards the end of the year to commence a mining operation for the HGZ which continually grows with every drilling announcement!
They have 45,000metres of drilling to go and $19m in the bank! :)
The market is imperfect and slow, fearful at present, as it was when Sandfire was drilling and continually finding more copper, yet their share price didnt launch until late in the piece. Even the MD of Sandfire Mr Simich stated that the market needed a lot of convincing before they actually believed how much copper they found!
Sarah-Jane Tasker From: The Australian November 15, 2010 12:00AM
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KARL Simich has a story every junior explorer dreams of but very few get to live.
He found the big one -- a life-changing, company-changing copper discovery that saw the shares of his company, Sandfire Resources, shoot from 20c to $7.50 in just over a year.
But the road to success for the mining industry veteran has not been without a few bumps and he was forced to retrench most of his staff when the global financial crisis hit, because with only $3m in the bank, he thought it was time to batten down the hatches.
But he kept one driller on, who told him he should drill deeper holes on the site. So, five months after sacking most of his staff in November 2008, his small team discovered the DeGrussa copper-gold project in Western Australia.
"You have to be really, really resilient, persistent and consistent and exploration is not for orphans and widows," he says.
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"You have to have the character and passion and ability to get up every day when you realise you are going to go out most days and fail. Exploration is all about dealing with failure, not success."
The success story of Sandfire Resources starts with a renowned prospecting geologist, the late Graeme Hutton, who had pegged the tenements -- 900km north of Perth near Meekatharra -- where the world-class discovery was found.
"The find was the culmination of that amazing, classic, Australian prospecting, of 'I'll get back there one day and have a look'," Simich says, adding Hutton had been over that ground 30 years previously.
"He had a place in Broome and you would sit around with him and talk about tenements and he had file notes and rocks and would talk about all the years he had walked over the ground. He had been over the ground in 1972."
Simich started his professional career as an accountant and didn't enter the lucrative world of resources until he joined a gold explorer in 1987, igniting his appetite for the risk-reward nature of the sector.
He has developed five mines but the surprise find at Sandfire is an achievement few explorers get to enjoy.
"This is an amazing story and an amazing development and is about sticking at your passion for the right reasons and being able to pick yourself up when things are tough," he says.
"Just before we made this discovery, we had a company that had $3m in it and we thought the world was over because of the GFC, so we retrenched just about all of our staff in November 2008. Five months after retrenching everyone, we made the discovery.
"It was a combination of good luck, grit determination and perceptive geology and all the planets lining up."
It was a 27-year-old female drill rig operator who made the discovery, after convincing Simich that, despite some poor drilling success, the company had to dig six deeper holes.
In April last year, the holes were drilled and the start of the discovery was made.
On April 30 last year, the company put out an early warning to investors that it had found something interesting and by the third week of May, results were released that essentially announced the discovery.
"We didn't know it was there but having made the discovery, it was almost like you could do it in a day," he says.
The junior's stock has been on a rapid rise since the discovery but in only February last year, Simich had sat with a co-director and flagged that they should buy some more shares at 5c a share.
"We had too many grumpy shareholders and we needed to have a bigger interest in the company, but we didn't end up doing it," he says.
The stock has had a fairytale run and closed at $7.90 on Friday. ********************************************************** But not all investors were convinced when the discovery was first announced and it took a short while for the market to react.
"The sad thing about Australian investors is they didn't believe the results in the first instance and it took them some time to get in and buy," Simich recalls. ********************************************************** He is passionate about his company and wants to lead it to production and was surprised when OZ Minerals made a move on the junior earlier this year and took a 19.7 per cent stake in the company.
Simich refused OZ Minerals' request for a seat on his board and he is confident more success is to come from the flagship project, which he believes the team is well positioned to realise.
He has realised the dream of every junior explorer and despite the success he has had, Simich still sees himself as the champion of the smaller guys.
"We are simple guys, who roll our sleeves up and get dirty with the rest of them," he says.
We just need to continue to accumulate while the market plays catchup!
Look at their real estate below!
IMHO! AVB's share price will lift when they begin to find where the HGZ copper actually originates from deep below!
The low grade between 0.5% Cu to 1% Cu deep mineralisation is what they will find!
They just need to keep drilling deep like this announcement below!
If the mineralisation extends below and ASVD-21 hits this then we are set for a very exciting time.
Especially since the price of copper is still sitting at $9700 per tonne and the cash cost to mine the HGZ mineralisation is expected to be below $1200 per tonne!
IMHO Avanco Resources is on a winner, we just need to give them time to build their business!
Cheers Nectar
AVB Price at posting:
9.6¢ Sentiment: LT Buy Disclosure: Held
