finance and indicators

It really is a simple equation, AVB with mine finance is a miner and seriously undervalued. AVB without finance is an explorer and valuation is a bigger debate.

The single largest issue for AVB is how is the obtaining of finance progressing. The company has stated in ASX release that the $12 million upon which the $54 million is dependant, is due this quarter, within 8 weeks. They have stated that term sheets from multiple sources were received and those companies are now doing due diligence. What that generally means is that AVB have put together an overview of their prospects, a feasibility study which they shop around to finance mobs and if the finance companies believe they have interesting prospects for all parties to make money they make an "offer of finance", a term sheet, that is then subject to checking by the finance company, the due diligence period, which can take some months. This process should be well progressed now and mostly we just get to wait.

Perhaps knowing what the company is doing while "we wait for the finance confirmation announcement" is of interest to some. I personally think that the activities of the company are a strong indicator of how they are progressing behind the scenes.

I think one good clue is the appointment of and activities of Wayne Phillips. Wayne Phillips is the former Kinross gold technical manager for South America. Kinross is an approximately $6 billion market cap, NASDAQ and TSX listed gold miner. WP resigned to join up with his colleagues at AVB in January this year. I think the timing of his move and his preparedness to leave a very large successful miner (no doubt on a salary to suit) to throw his lot in with Avanco is highly indicative of his trust in the merits of the AVB projects and the ground they hold. I really can't see a professional of his experience and stature leaving to join a small explorer without good cause. In terms of the timing, it is worth reading the AVB ASX release posted at the time of his appointment.

http://www.avancoresources.com/pdfs/DirectorOfOperations10Jan13.pdf

"Mr Phillips is a Brazilian national and an outstanding industry professional with a solid track record of project management and access to an extensive Brazilian network. Mr Phillips will assume immediate responsibility for development, construction and production from Avanco’s Carajas Copper Projects. In 1977 as a chemical engineering graduate from the University of Rhodesia, Mr Phillips migrated to Brazil and established a very successful metallurgical consulting business. Mr Phillips has been credited with participating in the engineering and commissioning of the Cariaba Copper Smelter and the design and construction of a number of small copper mines in northern Brazil.
Mr Phillips has acquired significant international experience working with engineering groups including SNC Lavalin, Kvaerner and Minproc. As an expert in sulphide flotation Mr Phillips has participated in more than a dozen
feasibility studies and adjudicated the award of and supervision of numerous construction contracts.
For the last ten years Mr Phillips has been Technical Director for Kinross Gold, South America and has played a pivotal role in the recent expansion of Kinross’s giant Paracatu Gold Mine in Brazil."

The world class Paracatu Gold Mine is one of the largest mines in the world with treatment plant capacity exceeding 60Mtpa ( My bolds above)

I can not imagine a more suitable or better timed appointment to meet AVB's needs as they become a miner.

We have now seen a flow of information from AVB with regards their developing intentions around the stage 1 mine at Antas North and South. We have seen many years added to the potential life of mine with the recent announcements and that is without the benefit of the further drilling they will do from the pit floor. For me, these are a sign of a company with confidence and commitment to their goals.

I also think that WP's previous experience building a smelter at Cariaba could potentially tie in nicely with the MOU between Para state and AVB around exploring the potential for a local blister smelter. This "relatedness" between AVB and the state should not be under estimated in my opinion. The link below was published at the time. If this project comes about it will reduce even further the operational costs for AVB, no bad thing, but for me the most important aspect of the proposal is the relationship that is obviously being formed between the state and AVB. The state wants economic returns and jobs. AVB wants to be the company providing those benefits.

http://noticias.orm.com.br/noticia.asp?id=637521&|acordo+de+intenção+de+verticalização+do+cobre+no+pará+é+assinado


...and then there is Luis Azevedo, Simon Mottram, Colin Jones, all men we rarely discuss that have outstanding track records.

...to be continued :)