vespasian03 could you send me your email address?Drcam, you...

vespasian03 could you send me your email address?

Drcam, you raise some good points in your post but personally I'd be very cautious about drawing too strong a correlation between the likes of Lynas and AVB. Lynas have a few problems to contend with; first and foremost they still don't have a functioning plant some years after construction commencement and wayyyyy over schedule.LYC have a complex plant, AVB a simple plant. There was an engineered bubble in RE pricing by the chinese which Lynas were founded on. There has been market destruction due to product substitution. Current RE prices are a fraction of what they were during the bubble faze. Investment banks own a relatively small portion of AVB compared to Lynas. Lynas had a real local environmental perception problem that was possibly politically generated, possibly generated by the Chinese government to protect their hegemony for a little longer and supported by the Australian Greens regardless of the data coming forward. (I know this personally as I was a large Lynas holder and had correspondence with the Australian Greens).

Providing AVB get their JORC and full mining licence between now and March (which I expect will be the case), we will be building a simple plant, very low environmental risk, low execution risk on all other levels as well. We will be supported by a government that is mining friendly, keen on increased employment, increased royalties and taxes for their coffers. AVB will be selling a product that is always going to be in strong demand. There may be differing views on the price of copper over the coming year or two but the people that sit deep in the industry, that I have listened too or spoken with, highlight the coming diminution at several large mines, grade reduction etc. Given AVB's low projected cost of production I can't see any hidden major obstacles. AVB will do well on a modest copper price and very well if the projected surplus is short lived as some expect. We just need the JORC, Full mining Licence and confirmation of Bank Votorantim. Those items aren't insignificant but I believe they are eminently achievable and not too far down the track. If we get them...

Based on this mornings prices and including the directors options being issued:

Volume of copper 26145204.00
Volume of Gold 7798.00
Cu price per lb. 3.200
Au price per oz. 1220.00
Interest charges 10% ? -5800000.00
costs excludes admin etc -25000000.00
shares on issue 1430000000.00
cash receipts 93178212.80
Earnings 62378212.80
earnings per share US$ $0.0436
earnings per share A$ $0.0477
Less BR royalties approx A$/share $0.045

Work your own PE but I would suggest that once AVB have the runs on the board with production at stage 1, stage 2 etc will start getting priced into the equation. It's very clear that Blackrock are already banking on stage 2, not a bad recommendation?

Add stage 2 and we will see something like 12c a share net earnings per annum. Stage 3? It was very apparent at the AGM that the company is aware that the next few months is critical but that once we have stage 1 up and running many new opportunities will drop into our laps. Cash flow from stage 1 is the critical mass moment for AVB and management know it. I suspect the funds that are playing us also know it. It will be interesting to watch whether, JORC, Full mining Licence and funding announcements have a major impact on share price or whether we have to wait for production for the real re-rate but for me it will be an intellectual exercise as I will be holding all the way through.

What separates AVB from other copper plays in my eyes?... There are other good little explorers out there trying to transition but they tend to have single deposit futures. AVB already have two proven deposits and several possible deposits with more to come. We appear to have the Brazilian government behind us and we find out soon enough. The government control the mining licence and they own 49% of Bank Votorantim and they are contemplating increasing their stake in Bank Votorantim by a further 10%.