Pedra Branca (E & W): 427,000t (metal) equivalent to approx. $3.82b ($3,821,650,000)
3
Pantera: 350,000t (metal) equivalent to approx. $3.15b AUD ($3,132,500,000)
*all prices using $8950 AUD per tonne
Total known copper: $9b AUD
Total known Resources (Cu + Au): $14b (rounded down, to avoid confusion)
Now what we don't know..
Asset known unknowns:
Column 1
1
Centro: Recent drilling from the scoping study “defined new high-grade zones within the orebody on sections where there was no previous drilling.”. A portion of the 19,000 m of Diamond drilling has been attributed to “further expand” the resources and upgrade the JORC classification of mineral resource estimate at Centro. I.e. Centro – undoubtably – will be expanded, and is likely underway. OZL like to reference Gurupi as a prospective region, not just Centro as a standalone asset. Appointment of Jailson Araujo to GM of Gurupi (Centro), and appointment of Sebastiao Siqueira as Project manager of Centrogold suggests there is more to Centro than publically available.
2
Antas: Mineral Resource upgrade overdue and expected end Q2 ’18, pit redesign/optimisation and more information on the cost guidance overdue and expected from the last quarterly
3
Pedra Branca (PB): Mineral Resource overdue and expected end Q2 ’18. PB West: Mineralisation reported open at depth and along strike – i.e. mineralisation everywhere. Further drilling last noted as being evaluated/considered. PB East: DFS long underway; 6,000 metres of infill drilling reported as commenced (three rigs operating); mineralisation reported as open along strike and down plunge (Drilling Success Continues at Pedra Branca, 04/04/18) – i.e. again, mineralisation everywhere.
4
Pantera: Following on from the initial MRE for Pantera, another 5000 m of drilling is reported as currently underway (Q1 Quarterly ‘18) to test the “highly prospective” eastern strike extension where massive sulphides are expected. Awaiting results. Presence of artisanal mining, i.e. high grades and near surface and poorly explored with modern exploration techniques
5
Azevedo: Last ann “14/12/17 – Positive Exploration Results at Azevedo Prospect”. Drilling is currently underway and ongoing as stated in the Q1 Quarterly, ’18.
6
Regional exploration: EM crews have been working on regional prospects for ages, results and follow-up has been largely unheard of.
Total known unknowns:
It may be fair to assume combined value of current activities will add >20% to current resources. Lots of activity underway and considerable information outstanding.
"In the interest of Avanco, the Company and its shareholders, the Board wishes to defer its recommendation with regards to OZL's takeover. Given that current exploration and resource upgrade activities have the potential to provide considerable material upgrades, the Board would like to wait until these results have been finalised and made public before further consideration is made" ~ Said no-one.
Takeover:
The Supplementary Bidder’s Statement’s section 3.7 “Intentions of Major Shareholders”, states only the favourable and bias intent of Blackrock – Omitting Glencore and Greenstone. This section also describes AVB directors as “major shareholders” whom collectively own only 14,045,196 shares (excl. options) or a meagre 0.57%. This aggregated number does not fall into “major holder” category, and if it does, why aren''t our major retailers on this list?
Section 6.6 then goes on to list “Substantial Holders”, citing Appian, Greenstone, Blackrock, and Glencore. This differentiation between “major” and “susbstantial”, aggregating the AVB BOD shares as a combined entity, and omitting the intentions of Greenstone and Glencore may be less than clear.
Anecdotally, someone on HC said they spoke to a Director recently who stated they were not the right people to take AVB forward. Though only a month ago an announcement read “[Centrogold will] capitalise on the Company’s Brazilian and Aussie know-how.” Further, OZL intends to keep key AVB personnel such as Polglase and Mottram. Funny.
I hope i'm not the only one getting confused.
AVB Corporate:
While directors claim financing for Centro's $50m plant is difficult, there have been many recent appointments to strengthen the AVB team, Avanco has had up to ~$30m cash in bank, and large amounts have been committed to development, near-mine and regional exploration over the past 18 months.
With an asset as golden as Centro, it always struck me as odd that AVB would continue spread itself across regional exploration and MRE activities instead of the best first. Simply, the company did not have the capital or technical ability to develop assets simultaneously, so why are they? And then an offer "three years in the making" arrived.
Despite the Company taking a 6 month term of $1.5m in Brazil to “generate recognition ion the Brazilian banking sector” just recently, suddenly debt financing is touted as unachievable, or "subject to unfavourable terms".
150m Options are expiring June 30, with 105m owned by the current AVB BOD (See OZL Bidders statement). This additional 105m converted subject to the offer going unconditional, is an extra 6.1% for OZL, bringing OZL's pending total up to ~ 43.31%. Still 165m shares short of 50 %.
OZL:
Sovereign risk is of little concern to OZL with Chairman Rebecca Mcgrath stating "Brazil is a stable jurisdiction that is supportive of mining with a reliable mining code.” (27.03.18). AVB has the second largest land holding in the highly prospective Carajas provience, “and one of the largest land holdings in the Gurupi Greenstone gold belt”. I.e. the Centro project is a regional view - not just a near-surface gold play.
OZL is aiming to produce 50kt+ Cu per annum, and 100Koz+ Au from AVB projects alone. AVB currently produces 14kt Cu, and 10500 oz gold from Antas only. OZL reasonably expects to expand AVB’s Cu production by 357%+, and Au production by 1000%+. Remembering the Offer represents a 121% premium.
- - -
Excluding Polglase, the remaining five AVB Directors average just 771,614 AVB shares – or 0.03% each. Shareholder interest is not well represented by Directors.
There is material information pending, forthcoming, overdue and/or potentially strategically held by AVB. If the offer is extended again, the odds of seeing this information increases along with the value of our Coy.
