I?ve checked few numbers and spent some time reading what?s out...

I?ve checked few numbers and spent some time reading what?s out there and I certainly like what I see.

The cash flow forecast on the copper appears straight forward and does indeed, if achieved, return a NPV of around $A45M before you add in the cash and even when you use a discount rate of 10%. The current copper price is well above their forecast price as well. The $2M capex (for earthworks) up front will now be fully funded and the capex of $9M in year 2 is both optional and funded entirely from the cash flow from the dig and direct ship to smelter operations from the first 12 months. I also get a fully diluted, post raising (using the $5.1M raising numbers being bandied around) of at least 8 cents. And I also have ignored putting any valuation amount on any other asset outside the cash and the 6-year cash flow from the high-grade section of the JRC.

I also see they are close to consummating the acquisition of some more copper ground in the Carajas. This can only add value to their suite of assets. Any such deals will almost certainly be from a major as the majors hold most of the ground. They tend to release unwanted ground on very favourable terms given they have established in their minds that the ground does not house a potential major discovery
(however Barrack?s release of the Touro Nickel ground to Avanco - now considered Nickel ground but copper back then was the only thought) may prove to be one of the great mistakes by a major in recent times. Apparently as nobody believed the Carajas region hosted Nickel Sulphides up until AVB's first drill hole proved it does, almost nobody went looking for them. Woops!!

So here we have a fully funded copper project that has a asset value well in excess of the share price, a whopping big cash flow due in over the next 12-18 months (prior to then spending $9M on the plant to go to stage II), a shot at a potential major Nickel discovery and a suite of other properties containing high grade copper yet to be drilled.

No wonder the broker wants to get its snout into this company in a big way. It?s game of trading strategy from here. About 2 weeks to drilling starts at Touro and everyone will be thinking how best to get into this as cheap as possible. All I can say is good luck, see you in amongst the argy-bargy games. By the way, any existing shareholder who doesn?t take up their rights (yes it?s a rights issue) is a nutter or tragically just short of funds.