I didn't see the word 'banks' anywhere in the announcement, only 'blue chip groups' 'sharing a longer term copper focus'. That suggests the possibility of an equity component (to me), especially when coupled with Brazilians 'building their copper book' and also wanting in on stage 2.
Wouldn’t be surprised, since Brazil seems keen to maximise the benefit it gets from exploitation of its resources and AVB has been acting in a very co-operative fashion in that respect, such as local smelting rather than ore export. Even, for that matter, seeking finance locally instead of foreign finance. Being a considerate corporate citizen seems the only sensible stance to take in those political circumstances. It may even explain why AVB has decided to persist so doggedly with Brazilian finance despite the frustration caused by the slow progress.
Perhaps an equity deal would free up revenue earlier for dividends? That would be nice for those 'impatient' investors not operating on geological time. I don't really care which form finance takes, if they are roughly equivalent.
Two blue chip groups have provided ‘term sheets’ and been ‘shortlisted’. That is encouraging, and seems to be akin to an ‘offer’ awaiting ‘acceptance’, probably with a bit of final negotiation of details between parties.
Perhaps AVB has set Q1 as the broad target despite expecting it sooner, because once again providing a stick for the market to beat them with makes no sense. On the other hand, they now say funding is being aligned to the start of stage 1 construction. Since production was originally due in Q1, not an alignment previously evident, but they may as well say it now, since stage 1 construction must shortly follow finance.
Proceeding to spend more money on stage 2 while waiting for news on stage 1 finance invites a few different interpretations. I'd say they are beyond the commitment tipping point anyway, so they may as well. Also, potential financiers or partners must be vitally interested in firming up stage 2 resource status.
Anyway, happy to have learnt something new. Just keep telling us the unalloyed truth, we are grown-ups who can handle it. Everyone knows it is no easy thing AVB is doing over there and problems will occur and you are beset on all sides with criticism. Some legitimate (mine) and some not (other people's)...
Nice to hear of 'exciting' news about stage 3 and very much looking forward to news at (or before) the end of Q1.
AVB Price at posting:
7.2¢ Sentiment: Buy Disclosure: Held
