They have disclosed that the bankable feaso will be 'fast...

They have disclosed that the bankable feaso will be 'fast tracked'. Difficult to know exactly what that means re timing & cost.

With the DSR of 1.3x, mgt believe their internal model shows that this stacks. So it is now a process for the BFS to marry up to internal modelling to the bank's satisfaction.

Re the 1.3x, it is difficult to make a definitive comment without knowing the loan details especially the final margin for the interest rate (bank lending rate + margin) and the principal repayment schedule i.e. is it equally weighted over the 6 yrs (8 yrs less the two upfront years that are interest only) or a bullet structure where the majority if the principal repayment is back-ended. If it is equally weighted, then there will be a big step-up in the DSR test in year three which is a shorter-dated risk. If it is a bullet, then mgt have much more time up their sleeve i.e. the step-up will be in yrs 6-8.

SimpleSimon, we are not getting much bank debt being lent to resources micro/small caps @ the moment (or any capital for that matter, debt or equity). Most of it is via off-takes ie glencore deal for ytc. I would love to do some benchmarking though so if you know any listed juniors of a comparable market cap to AVB who have landed bank debt in the last six mths, that would be much appreciated. Good to get yours and andy's insight ...

One example that has a 'Brazilian' context is the US$50m Banco Bradesco has lent Mirabella for working capital. Rate on this is LIBOR+6% and there are no covenants disclosed. H/e, it is short-dated as 50% of the principal needs to be repaid in 2014 and then in six-monthly increments thereafter. So this is my current definition of a distressed deal with a Brazilian bank; AVBs indicative terms are much more gentlemanly than 50% of principal in 2-yrs!

As an aside and as you can probably tell, I am a big fan of debt maturity matching asset life ... so 8 yrs is good for a +10 yr mine life. I used to work for an AREIT and the learning outcome from the GFC is was that short-dated debt and long-dated asset lives do not make for happy shareholders!!