the incredible vale deal

So much great information, it is a bit of an overload so it's taking a while to sift through it.

I just want to concentrate on the super-important Vale Deal for now. SM could do a lot of exploring with that money, and it would strengthen the cash situation.

In Vale dealings, AVB is in a very strong position !
Here is my take on it... some is supposition, but it is based on logic.

1. Any suggestion by Management that Vale are too distracted on other projects to be bothered seriously procuring Trindade North is absurd. It was Vale who approached AVB to finalise it, after a very successful TN drilling program (where arguably they knew what was there and where to drill before they even started )

What is a few hours of negotiating time for Vale? Too distracted? Nah. Come on.

The TN magnetite may well be needed to blend ore. The very fact that Vale wanted to explore and procure it in the first place suggests it is of strategic and operational importance to Vale, but not to AVB who do not intend to mine it !

ROUND 1 to AVB.

2. Vale OWE AVB $1m since August, plus interest at commercial rates. If I were Scotty or Mac I would at least be sending the account to Vale so it is on record formally as an outstanding debt with interest due in the event of non-payment. Useful later on.

It is not a threat-to-not-pay CARD held by Vale, but rather an AVB CARD that says "OK you wanna play difficult, then pay us what you owe us before we even talk again"

And THAT is not being unreasonable. ROUND 2 to AVB.

3. The Vale reps have their Masters to answer to. They are tasked with negotiating a deal, and not returning empty handed. To tell their bosses the outcome is that we are all going away for a year with nothing happening ! Yeah, right! Plus... Vale negotiators also lose if they have to suddenly go back to their masters for $1m to rightly square the books before AVB enters further discussions. It seems then the further they go, the more they mess up. Instead of keeping the $1m in their pocket (a generous gesture by AVB) they likely have to pay what they owe first, which is rather humbling.

ROUND 3 to AVB.

4. Woody and Tony do NOT have their Masters to answer to. They ARE the Masters and can play the game ANY way they choose. (Shareholders can be deflected by saying it could take a while because Vale are so busy. Easy).
Having no masters to answer to means no pressure on AVB

ROUND 4 to AVB

5. If AVB have to wait another 12 months for the money then (as they emphasise), funding for mine startup is not a problem really.... the smelter will help.

TIME is no problem to AVB. ROUND 4 to AVB.

6. Figures of 25% of total resource overflowing into AVB's tenement have been suggested at this AGM. That is gigantic!! Never expected that.!!!!

Simply put, that means it is unquestionably worth every bit of $40m. It is just AVB's good fortune that it is.

The stronger the deposit, the stronger the hand by AVB, and this is excellent. 25% !

ROUND 5 to AVB

7. IF this goes to arbitration, Vale will lose. Likely they know that. With fully 25% of the deposit, including critically the top of a major ridge structure, it must be worth the full $40m, and Vale will be adjudged as having to pay in full, even if it hurts. Losing cases such as this do nothing to foster the goodwill, trust and respect of governments and others.

Vale will have to come to the party eventually. AVB have to do ..... nothing.

ROUND 6 to AVB

Wording in past AVB announcements has led some posters (me included) to conclude Vale are attempting to play hardball... or at least trying it on.

I read into it that now AVB has simply walked away at what has been offered. The clock is ticking for Vale, not AVB. The money would be nice but hey, not essential.

Vale would no doubt have a BIG Master Timing Chart occupying a wall and procurement of this deposit extension is right on the Critical Path. Activities are Planned, not ad hoc. Until you own the property you are taking all manner of risk by doing any prep work at all on it. You certainly cannot drill out more to firm up.

So Vale had better wake up. They have tried it on...... fair enough.. and now it is time to be sensible.

All the talk about a cent or two up and down in the SP. Imagine what a sudden $40m cash receipt would do to AVB's SP !! Then journo's would know about Avanco. All this posturing, bluffing, and push-shove. The sooner all these motions have been gone through and it is sorted out the better.

THEN watch the AVB SP !!