"This is quite narrow thinking....
Xtrata have not outsourced the "risk"
Ummm it's exactly what they've done...
No need to invest any further time, resources or capital in the project but going of Aman's very insightful release out of Brazil - should the project prove itself up over time they have an option to back into it with a 70/30 stake. Of course Xstrata being a company of the size it is they are not afraid & more than happy to throw money into a project that has proven it's worth but the current deal puts them in a position where they are now not throwing any further cash into the "possibility" of a feasible resource they now just have the option to claw it back once all the groundwork is done. AVB gets the large premium return on expenditure if it gets there but they are also the ones that will wear the cost if it doesn't.
Still a great move by Avanco in formalising the relationship but it can't really be denied that they are not the ones now wearing the risk.
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"This is quite narrow thinking....Xtrata have not outsourced the...
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