Copperroad...Nice inaugeral post for HC...Although I...

Copperroad...

Nice inaugeral post for HC...Although I respectfully suspect that your valuation of 30 cents is a "low ball" number and Kallen's $4.50 a bit "overdone"...compared to the the "In-situ" Net Present Value for AVB...IMO

AVB should have a healthy Net Present Value [NPV] of 91 cents per share, based on a fully diluted share base and Cu averaging US$7000 per tn. over the 10 year life of the mine...

The valuation for AVB's Antas North and South Project uses a base case of TP's stated target of 100Mt @ 0.01% Cu and zero credit for Au...I use this figure since I know from TP this would be an acceptable company target and also considering the recent successful results indicative of the last announcements that drilling at the intersection of North and South delivers a primary lode discovery somewhere on the perimeter of the 2 EM targets … assuming the Aerial Magnetic Survey delineates and quantifies the corrected EM data and the NQ deep drilling on the two lenses proves successful i.e. widening at depth etc...

Now assume worst case scenario a 25% reduction in size based on geological variations in the mineralised trends at Rio Verde IOCG deposits, leading to 75Mt of ore…Assume we have a CU metallurgical recovery of 95%, a drilling conversion rate of 90% plus. So based on these assumptions, we still have a total of 480,000 tn. of contained Cu in the ground or 400,000tn. of payable Cu... Comparable roughly to SFR's JORC of 541,000tn. contained Cu. eq., 599,000oz contained Au from 10.72Mt @ 5.1% Cu, 1.7g/tn. Au]…With the Cu price averaging above US$7000/tn for life of mine and assume TCO of US$1500/tn. inclusive of all Mining, Milling, General Admin OPEX or life of mine operating costs of US$1.10/lb.…

AVB production would be 40,000tn. of Cu per annum using the median value from [Sydney August 31: (RWE Aust. Business News)] and also using the authors 10-year mine life...Now assume costs of design, construction and commissioning the mine facilities [Open-pit mine, pilot plant, concentrator, power, infrastructure, equipment, trucks]...from research I have conducted and considering a production size of 40,000tn Cu concentrate per annum, CAPEX may potentially be US$150M...

A more accurate NPV valuation per share from the 949Mil fully diluted share-base can be calculated using a discount rate of 10%...inclusive of all deductions... Assume a further dilution of 80% for CR for mine start-up...So less $150M and a NPV of future project revenue streams over 10 years of US$$1.570 billion divided by the total future shares on issue...

Equivalent to a NPV per share based on US$7000 per tn. from 75Mt@1%Cu… being still a healthy….AU 91 cents per share...

Conclusions…meaning with the current nominal SP at 10.5 cents, ADD in...

1.Au credits over the life of the mine...discounting ongoing production OPEX

2.Rising Cu prices over next 10 yrs due to 2% global supply short-fall over demand to 2020

3.Reduce disc rate to less conservative 8%

4.Sale of TN to Vale and TP's touted new valuable acquisition

5.All infill, extension and deeper drilling on recently calibrated EM targets, coupled with new aerial and ground EM data discoveries produces a MUCH larger JORC than 75Mt…

6.CAPEX is drastically reduced with NEW revenue streams eminating from "Trial Mining" of DSO

AS stated in a previous post of mine...there is plenty of room for MC growth, post JORC 1st qtr. 2012…means SP could eventually and potentially appreciate north of $1….even with stagnant Euro Zone growth and BRIC economies coming off the boil [excluding Russia]...

Allot of assumptions here, just an estimate as to what might happen, so DYOR...