Sumitomo and contempt of court, page-40

It is good to see that the San Jorge drilling program is completed. AVQ is still planning on a direct shipment operation from San Jorge. This is just a smokescreen. There is no way a direct shipping operation of around 1% Ni laterite ore, will make money. It just will not fly. However, AVQ have to keep up the fiction that they are pushing ahead with San Jorge as without that they have absolutely nothing. With the work they are planning at San Jorge, how are they going to pay for it? At the moment the rights issue is stopped and its unlikely to raise much money in any case. The placement they did will cover their salary and admin costs for a few months but no actual work. Therefore, if they are going to continue to work on San Jorge they need to raise more money and fast. The Rights Issue was stopped on 9 March and its now 21 March and there has been no release regarding how the rights issue is going to be completed. That indicates it has major issues.

The SIG was going to tender the ground over Kolosori last September but this did not happen. AVQ have applied for a PL over Kolosori but that is not going to get granted any time soon (refer to recent history regarding how the SIG are handling this issue). Why would the SIG grant a PL to AVQ over Kolosori when at the moment they do not have the funds to do any work?

Finally, AVQ are going to spend more of shareholders funds picking another legal fight with Sumitomo. Who has the deeper pockets to fight a legal action? SMM will just wait AVQ out.

RM is a master at keeping the share price up and I take my hat off to him for that. However, when you look objectively at the issues facing AVQ, it is clear that San Jorge will not make it as its too low grade, they are not getting Kolosori back any time soon, they don't have the funds to do any serious work and Sumitomo are just waiting them out. Crunch time is coming when the details of the Rights Issue are announced and we see how much money they raise from the Rights Issue. Most investors who know about direct shipping nickel are not going to invest in San Jorge as its too low grade. It will be interesting to see who puts money into the Rights Issue. It will not be people who know about nickel.