Avanco Resources Ltd ("AVB")- very high grade cu

[steve fleming]

Hi Steve, yeah I played victim to that P&D a while back and got out with only a small loss thankfully.

At times its like this stock is controlled though and unpredictable, kind of like many stocks when we think about it but there are some pure pro's in this who know how to fish well.

Wouldn't mind another go at 1.8 if it gets back there though~!

Yep, Drilll, trade carefully with this one...plenty of games being played here recently.

I thought today was going to be another p'n'd but it held its gains on the close.

Very high turnover today (20% of register at a VWAP of 3) which will hopefully support a new base at 3.

Matthew Wood stocks in the past have been favourites with traders- AVB seems no different.
Matthew Wood and his mates also now also control SBL Signature Metals Limited

[evilroyrule]

We cant have you talkin to yourself. People will think you are nuts
Have you bought some of these Roy?

Looks like a nice close for the heads. I wonder if the 1.5mill options @ 1.6 will get taken or pulled?

no i didnt strat, it was toss up between EWC and AVB. Made another wrong decision primarily because im being impatient and not letting things run. Sold IRN last week only for them to fire up approx 9% yesterday. So as much as im now growing to despise my CUE shares i cant sell based on irrational thought they will then fire also. moral (for me at least) is not become be greedy and expect 10% plus gains regularly. I think recent times have created an unreasonable expectation.

[steve fleming]

On the upside, a medium term target would be a market cap of $20m or 6c.... though the directors may want to get a cap raising away at 3c to 4c.

AVB is looking better and better, with very strong announcements today and last week:

In summary, AVB controls highly prospective land, surrounded by majors, in the world class Carajas region in Brazil. AVB's two prioirty projects are:

1) Touro Nickel Project where exploration results continue to highlight the geological similarities to Mirabela Nickel’s giant Santa Rita Nickel Project in Brazil.

2) Antas South Copper Project - A scoping study on the high grade starter project is nearing completion. AVB is currently talking to a number of domestic and international parties interested in direct ship copper off-take. Open cut mining will be cheap as largely free digging with low stripping required.

Iron ore and gold potential also exist, when AVB gets round to focusing on them.

- all for a market cap of just under $10m.

just need to get the cap raising out of the way, and this should re-rate big time.

[trackers]

I'm in the options. On the back of their $9mil market cap I've had a newbies go at evaluating their copper resource (also posted on HC):

Copper price has risen almost 2.5x over the last year (since maiden JORC were published). Copper now at ~AUD$3.75 / lb.

84,400 t of copper (0.4%) = 186,070,149 lb

75% recovery = 139,552,611 lb.

20.5% copper concentrate = 28,608,285 lb

AUD$3.75 x 28,608,285 lb = $107,281,068 gross

A small amount of research suggests extraction costs are 0.70/lb to 1.45/lb so given the flotation method can be used I'll assume AUD $1/lb (26% in this case.. So 74% of gross is retained as profit)

Profit = $79,387,990

Now.. Referencing the latest announcement (http://www.stocknessmonster.com/news...E=ASX&N=476690) there's a few unknown's here:

1. Does/should the 75% recovery, 20.5% copper concentrate apply to the whole resource? Am I doing the right thing here, by assuming that 75% of the total resource is recovered, then 20.5% of that is sold as copper concentrate?

2. Any comments re total costs? Any help would be useful

I appreciate that extraction costs will start out low, and rise over time.. And there'll be significant variations in recovery % etc, but there's not much I can do about that

[snowball]

trackers, my take on this is that they expect to recover upwards of 75% of the resource (although I would generally use 90% if no estimated recovery figure is given).

With the production of a 20.5% concentrate, this is the product they are refining to so whoever sold to the concentrate needs refining further to extract pure copper.

They will still produce the full 75%+ copper recovery it is just refined to and sold in a diluted form. Thus the pricing they receive I assume will be less than a market price US$3.30/lb or $7,300/tonne or whatever price basis is used. How much less I don't know.

I also picked up some of their options a while back.

[jdg]

i looked at AVB a while ago - prompted by Steve Fleming’s options thread. i actually tried to buy a few around the 1c mark but failed. after recent announcements, i'm back. i took up a small position today at 2.6c. very pleased to see it jump to 3.1c, but can see no reason why. at the moment we have some great results but it's all hinging on the promises of management. i hope they dig holes and not turn the co into a bottomless pit. a cap raising appears inevitable in the near future.
this really is a punt, and i'm only in for gambling money - but it's one for the bottom drawer.

-j

[jdg]

hey trackers, i've transfered the discussion over here. what price are you looking at for re-entry? i am in at 2.6c - it will be interesting to see what happens when the announcement comes. good things come to those who wait...?

-j

[steve fleming]

from the options thread.....

Hi Steve,
This AVB Trading halt is dragging on eh?

Starting to wonder whats goin on.

First the halt pending an ann regarding a cap raising.

Then withdrawl from quotation.

Then a substantial holdings notice which was quickly withdrawn.


mmmmmm. fishy

There was an interesting post on h/c by a pretty respected poster (that has since been moderated) that was adament that the cap-raise was going to be a 1 for 1.5 rights issue @ 2.5c togethor with a free option to raise $5.1m. The poster said the raising was being managed by CPS Securities. To me, this made sense, as a Director of CPS is Jason Peterson, who just happens to be one of the largest shareholders in AVB (through Celtic Capital).

However, there is no way it takes 5 days to organise a rights issue, so there must be something in addition, maybe a JV or an off take agreement which could be used as security for debt financing.

Either way, AVB will be cashed up, which the market will like.

Personally hope it is not a rights issue as most of my AVB holdings are through AVBOB.

The SSH notice was withdrawn as it was lodged by a guy who had bought more than 5% of AVBOB, but you don't need to lodge a SSH notice for options so it was withdrawn.

[STRAT]

Thanks for that Steve.

I hope the ex price on the new free options is more that AVBOB. It would be bloody unfair on those who supported them last time if they aint.

Getting any sleep?

[trackers]

Hi Steve,

Cheers for that info too, was curious what the moderated post said...I would have thought that the delay would suggest an institutional placement rather than a rights issue, but who knows...

Tbh I'm hoping for some dilution so that I can pick up some cheap bob's - I overpaid for them last time, low-mid 1's would be good...
we will definitely see..