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

**silverblizzard888** · 24-10-2014, 11:00 AM

Originally Posted by robbo24

I don't like this stock because people on the Hot Copper forums like it.

However, I take a different view of a debt financing announcement. Such an announcement de-risks the investment considerably as it allows the rocket to get going.

Haha fair enough, not sure what you have against Hot Cooper, but as the general rule goes never get emotional over a stock. AVB are doing all the right things and meeting their objectives, while having good strong fundamentals in being in a mining country that loves mining (unlike NZ), good cash flow of at least 30 million, experienced and diligent management, great permit locations with high grade copper, has been significantly de-risked with mining license and JORC and three major mining companies as shareholders that probably assist from time to time like Blackrocks royalty deal.

I absolutely agree that finance goes a long way in de-risking the project, but the general view is that its a given already because of the way management is talking about it and given this deal was agreed last year with them only having to meet certain criteria that they have likely already met with the licensing, JORC and the position of the company right now it seems like its likely going to happen. In the past when the price was at 11 cents I'd say finance was factored in, but due to the re-rating of stocks the market thought it was a better idea that the value not be added until finance has actually been approved so my view is finance is no longer factored into the price any more until it actually happens, then we might see it cracking pass 10 cents at least.

**robbo24** · 24-10-2014, 12:56 PM

Originally Posted by silverblizzard888

Haha fair enough, not sure what you have against Hot Cooper, but as the general rule goes never get emotional over a stock. AVB are doing all the right things and meeting their objectives, while having good strong fundamentals in being in a mining country that loves mining (unlike NZ), good cash flow of at least 30 million, experienced and diligent management, great permit locations with high grade copper, has been significantly de-risked with mining license and JORC and three major mining companies as shareholders that probably assist from time to time like Blackrocks royalty deal.

I absolutely agree that finance goes a long way in de-risking the project, but the general view is that its a given already because of the way management is talking about it and given this deal was agreed last year with them only having to meet certain criteria that they have likely already met with the licensing, JORC and the position of the company right now it seems like its likely going to happen. In the past when the price was at 11 cents I'd say finance was factored in, but due to the re-rating of stocks the market thought it was a better idea that the value not be added until finance has actually been approved so my view is finance is no longer factored into the price any more until it actually happens, then we might see it cracking pass 10 cents at least.

I disagree. If you are an institutional investor, or any type of investor with specific contractual, statutory or equitable obligations to other investors, then you would not pay a cent more than the current risk profile allows. It would be suicide to assume that a few throwaway comments in a 2-3 page announcement would cause you to go beyond what is known.

Then there's also the FA/risk analysis that can only be carried out once the characteristics of the debt financing agreement are known. It is impossible to do this without a substantive announcement identifying such terms.

This is just my view, but I am confident that it holds water.

**BFG** · 24-10-2014, 01:10 PM

Me thinks Robbo has failed to even read the BP report (which I would discount as they were the underwriter for last cap raise) as a base to do his own FA.

Seems he also missed the 14 pointer Moose on page 6.

He'd better get his eyes checked before hunting season this year, don't want him shooting Percy or SW by accident!

**robbo24** · 24-10-2014, 01:23 PM

Originally Posted by BFG

Me thinks Robbo has failed to even read the BP report (which I would discount as they were the underwriter for last cap raise) as a base to do his own FA.

Seems he also missed the 14 pointer Moose on page 6.

He'd better get his eyes checked before hunting season this year, don't want him shooting Percy or SW by accident!

You are a drongo.

**silverblizzard888** · 24-10-2014, 01:58 PM

Originally Posted by robbo24

I disagree. If you are an institutional investor, or any type of investor with specific contractual, statutory or equitable obligations to other investors, then you would not pay a cent more than the current risk profile allows. It would be suicide to assume that a few throwaway comments in a 2-3 page announcement would cause you to go beyond what is known.

Then there's also the FA/risk analysis that can only be carried out once the characteristics of the debt financing agreement are known. It is impossible to do this without a substantive announcement identifying such terms.

This is just my view, but I am confident that it holds water.

Well I was speaking on general terms of my view, which given I'm a retail investor that’s the type of view you get, but if we are to consider institutional investors then of course theres still too much risk for them to start stepping in until finance has absolutely been secured due to them being liable to their clients and must take a prudent approach because of that or else they could find their head on a chopping block and at the end of the day if they are being paid why take risk when they can wait and still receive a pay check, but waiting means missing out or buying at a high price with lower returns. This is generally why retail investors have the ability to beat the market and institutional investors, while half the institutional investors fail to beat the market (statistics quoted from Beat the street by Peter Lynch). Once finance is secured then yes we may see institutional investors stepping in for a bigger slice of the pie.

Until something happens then its not guaranteed, of course I understand that, but I don't necessarily have this worry and my view is financing is about a 90% given with the 10% possibility that it might not happen, but just the slight chance and even if they fail to get financing from the bank, with 30 million in the bank to fund a 70million project which 10 million of it is more or less there if the project really goes over planned budget, so given Blackrock will do a 12 million financing deal that really leaves them really only needing 18 million to 28 million, which worse comes to worse I'm sure they can find another bank or even do a capital raising for that cash, but that’s a unwanted situation because they need as much money they can get in order to develop stage 2 and no one wants to wait any longer. Worse comes to worse they aren't dead in the water, that’s what I trying to say and my reasoning to justify why I have invested. You can say its unknown, but for me all is not lost if if the first option doesn't go to plan, but perception is finance is likely to happen from the company and Bell Potter who have likely done a risk analysis themselves.

**BFG** · 04-11-2014, 06:39 PM

Hammer Time

**BFG** · 07-11-2014, 01:28 PM

Results out for first drill. Not bad. SP up accordingly. Expecting 3 more before Xmas along with finance and building commencement announcements to boot.

Weekly chart looking great for a HAMMER REVERSAL