Commercial production consists of an annualised output of 12,000 tonnes of copper in concentrate and 7,000 ounces of gold by-product credits.
A preliminary total of 3,117 tonnes of copper and 2,260 ounces of gold was produced during the June quarter.
Production guidance for the September quarter will be in line with the commercial production rate of 3,000 tonnes of copper and 1,750 ounces of gold.
Avanco's long term goal is to become a 50,000 tonnes per annum copper producer by combining Antas (Stage 1) with nearby Pedra Branca (Stage 2).
Avanco owns a portfolio covering 1,800 square kilometres of the Carajas Mineral Province in Brazil.
The area hosts the world's largest concentration of large tonnage iron oxide copper gold (IOCG) deposits.
Avanco is now the second copper producer in the Carajas behind Vale.
Avanco's focus is on the development of Antas (Stage 1) and Pedra Branca (Stage 2).
Antas Stage 1 has a 7 year mine life with potential to extend and costs forecast to fall within the bottom quartile.
Antas Stage 1 has a Proved and Probable Ore Reserve of 3.63 million tonnes at 2.53% copper and 0.55 g/t gold.
Avanco aims to increase Antas production to 15,000 tonnes per annum copper by 2018.
Planning is underway to develop the significantly larger Pedra Branca underground project and establish Avanco as a 50,000 tonnes per annum copper producer.
Pedra Branca (Stage 2)
Avanco recently upgraded the Pedra Branca East Mineral Resource through infill drilling allowing for a near term development strategy.
The updated resource model now has over 70% of the resource in the higher confidence Measured and Indicated categories.
The new resource is being targeted for pre-commercial development under the low-capex, accelerated, start-up strategy.
Studies evaluating the feasibility of an expandable 1,000 tonnes per day underground mining operation are well advanced.
The Pedra Branca East Mineral Resource now stands at 10.48 million tonnes at 2.8% copper and 0.7 g/t gold.
The most aggressive plan assumes commencement of the box-cut/decline as early as Q3 2016, with first ore extraction during Q2/Q3 2017.
The company has a strong balance sheet with US$19.8 million cash recorded at the end of May, 2016.
At least 10 shipments of copper concentrate have been delivered to customers with provisional sales amounting to US$10.3 million as at 31 May, 2016.
Respected industry institutional shareholders currently hold 57% of issued capital being:
- Appian Natural Resources Fund (18%)
- Greenstone Resources Fund (17%)
- BlackRock World Mining Fund (14%); and
- Glencore Plc (8%).
Strong preliminary production figures for the June quarter have helped Avanco achieve their desired commercial production rate at Antas.
If June quarter preliminary production figures are annualised, copper production was 3.9% higher and gold production was 29.1% higher than the commercial production rate.
This is further evidence of Avanco's successful management of the Antas project, having been built on time, under budget with successful commissioning and ramp up phase.
The company continues to attract broker attention with a Buy recommendation from broker Hartleys, ascribing a 12-month price target of $0.11 and a valuation of $0.15.
Shares in the company last traded at $0.067 providing significant upside based on the valuation.
Avanco's high grade, low cost Antas open pit operation is financially sustainable in a low copper price environment providing for upside should the copper price appreciate.
The company is debt and covenant free and actively pursuing new opportunities.
Avanco is supported by some of the world's premier resources funds, who hold 57% of shares.
Further details will be made available upon release of the June quarterly report.
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