Interesting take by UBS and thank you mongy.
OZL's agenda is quite clear: it wants more copper/gold. Country risk is everywhere one looks. I think OZL will do fine in Brasil.
Antas is small, short-life and high grade. There are nearby prospects, but I see the main attraction elsewhere, with Pantera and Pedra Branca.
On 19 March Avanco announced it has 1mt of copper and 660k oz og Gold in situ, largely in Pantera's maiden mineral resource estimate.
I see no reason why OZL shouldn't operate the Centro gold mine, containing 2m oz of gold. Sure they could sell it at a discount. It is likely worth more run in-house.
In the announcement webcast, Andrew Cole made noises about adding to the assets in the Carajas copper province. It is a lot easier to evaluate a prospect and act decisively if you own a mine or two down the road and have geologists who know the territory.
Oh, and 7 pm last night, OZL announced it owns 18.45% of Avanco after on-market purchases via JPMorgan. It already has commitments from holders of another 30.62% of shares (provided no superior offer emerges).
Combined, that's 49.07%, very close to OZL's minimum acceptance target of 50.1%. It can buy 1.5% on market anytime it wants.
It is too early to tell if rival bidders exist. They will be seriously deterred by OZL's existing holding/commitment position. If OZL's bid is reasonable - and management/private equity acceptance suggests it is - rivals will let it go.
It looks to me OZL has already won Avanco.
Ash
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