Poetplus…The upgraded JORC will potentially be released at the...

Poetplus…

The upgraded JORC will potentially be released at the end of the Ist Quarter 2012…

The assumption here is all infill, extension and deeper drilling proves up significant economic widths and grades and including successful hits/proving-up on the EM targets of the order TP was potentially alluding to…this also assumes a significant deeper primary lode is fully delineated…where the main Management emphasis being proving up the Antas North and South intersection…

To be correct TP was only talking about a PFS at the end of the 1st Qtr 2012…it was then my assumption that the DFS could be worked on while the remainder of all drilling be completed…But based on other industry trajectories here is what may potentially unfold…this then becoming a lot clearer...

So from the completion of the PFS at the end of the 1st qtr 2012…DFS may not be complete till beginning of 4th qtr 2012…Project financing in place by end of 2012…Infrastructure completion and major equipment on site commissioning by end of 1st qtr 2013…Plant and concentrator constructed by end of 2nd qtr 2013…open pit DSO and underground working, concentrator ramp-up [conventional 30k per annum, conc.=crushing/milling/flotation/dewatering and filtration…going to 50k per annum] and first shipment by end of 2013…Meanwhile the JORC upgrades through-out will potentially drive AVB SP allot higher…

Again TP indicated the CAPEX would be a lot lower than the US$300m I conservatively overstated…since Vale and others over 30 yrs. have put in place massive amounts of external infrastructure…A HUGE advantage for AVB when it goes into pre-production… meaning a ”potential” CAPEX Cost Break-down [approx. in US$... Construction [plant/equip/internal infrastructure]=150mil…Open pit mining to access DSO=25mil…Underground mining development=40mil…all other pre-production=15mil…means CAPEX could be as low as US$230mil [or lower]...possibly a big plus for AVB...

Life of Mine Operating Cost Estimates will follow a similar industry trajectories being [all approx. US$.nos]...Mining=50cents…Process/Maintenance=35cents…Admin=10cents…Transport=30cents…Treatment/refining=20cents…Au credits=minus40cents….means AVB Cash Costs=US$ per lb. of only $1.05...possibly a big plus for AVB...

AVB Current Cash Flow... [poets calculus]
Options exercised next April produces extra revenue of $2.6m and 4 months later a further $1m from Vale…Cash at start of 3rd quarter 2011= $19.6 m. Projected outflow this past quarter $2.35m which should leave $17.25, plus $0.6m Vale = $17.85m at end of 3rd qtr 2011…Budgeting for Admin $250,000 but reduced Drill/Assay/JORC-processing costs to say $1.2m from $2.1m…outflow for 4th qtr 2011 = $1.45m, or an Annualised rate of 4 x $1.45m = $5.8m...

So examining the period end 3rd qtr 2011 to end of 3rd qtr 2012 after all potential revenue minus drilling and admin cost...AVB is still left with a potentially healthy 15mil to fund the completion of the current drilling campaign…as you say a reduction of only 13%...
i.e. plenty left in the tank…to deliver on the prospectively of the Antas Region and potential success of a healthy JORC upgrade the SP should be back to the old highs 23.5 or higher by end of 1st qtr 2012…one would assume…

I agree it is unfortunate about Serra Verde etc for now....but the focus on Antas will prove very productive here…meaning on track to complete the current drilling campaign cost effectively…meaning regional exploration objective to establish a significant IOCG deposit…also meaning TN sale to Vale another potential revenue positive for pre-production and future acquisitions and then growing AVB asset base…where the near term value for an "unexpected" MC growth is a big JORC number...I'd like to see that!

DYOR…allot of assumptions here...this is not financial advice…just a general discussion as it "might" relate to AVB’s future...now where's my glass of beer?