Avocet Mining Share Discussion Threads

[rambutan2] 28/7/2004 17:59

just came across this at amreview.co.uk.
whats happened to bb?

Avocet Mining - Rara Avis

Many wounded birds have fluttered down to AIM, and with Avocet the situation seemed plain. In 1996 the Official List quotation had been gained when a certain degree of scarcity value attached to the company's tungsten interests. But over the years that followed - the company was into gold as well - the progress was not of the type to command excited investment interest.

As the sun rose on 1st April 2001, gold prices scratched around at a 20-year low, whilst tungsten concentrate surged to a 15-year high. There followed one of those rapid change of circumstances which convince the pusillanimous that investment in international mining shares should be left to those of greater mettle, as gold came back into fashion and demand for tungsten peeled off - peeled off indeed to the extent that the company decided to write down its remaining tungsten assets. This step necessitated a cool £12 million impairment provision, and it was not clear that anyone staggering away from the debacle with those figures in mind would be mollified by being told that operating profit before the hit had been up by more than 20%.

Now Avocet became a gold mining and exploration company pure and simple. More than 100,000 ounces of the stuff in the year to 2002 emanated from Malaysia, but the acquisition of an Indonesian mine spearheaded the company's determination to increase its annual production of the metal to 300,000 ounces. This was followed by the purchase of a 49% "economic interest" in a producing gold mine in Tajikistan, ZGC, which gave the vendor, Nelson Resources Ltd, a 17.6% holding in Avocet.

So what price success? So what price the shares? (So what price gold?)

A September 2002 announcement told of Salish, a listed Canadian company, agreeing to acquire Avocet's remaining tungsten interests, a deal whereby Avocet would hold just under 50% of Salish. If the price of tungsten climbs above $70 per tonne, a $2.5 million loan to the principal tungsten producing subsidiary will be repaid to Avocet.

In March 2003 the tungsten deal was amended so as to give Avocet 75% of Salish, which was renamed Primary Metals Inc. The tungsten price tightening had done no harm to the Avocet share price, but that price had ebbed by April, despite it being revealed that Avocet now owned 49% of the Tajikistan company, and, in controlling its $90 million external debt, was collaring all of its cash flow. The other shareholder is the Republic of Tajikistan, and Avocet was talking to it in terms of debt forgiveness as a quid pro quo for whatever goodies it thinks that this will command.

But it was not until March 2003 that the company punched its full weight, earnings of 2p per share despite the costs of getting out of tungsten, fruit of the gap between 135,000 ounces of gold produced at a cash cost of $219 per oz., and a recovering spot market - average price $325 - where Avocet sells. Despite the vitality which had seen the company climb out of its hole, ambition, with all that that implies by way of capital and other expenditure, when combined with a heavy debt-repayment schedule whispered caution; caution quite apart from the global and local factors over which the company has of course no control.

But by mid-September 2003 the company had appointed a new broker, as well as announcing that 24 million shares had been placed at 42.75p, raising £10 million. The proceeds of the placing were to be used to develop a project in Indonesia, and for exploratory activities at the company's other properties. The September interim figures themselves which followed later, showed that the gold price had transformed the outcome of fairly static operations - and delivered a gross profit well nigh identical to that of the full year - £4.4 million - and earnings per share up by half as much again, to 3p. The debt was almost wiped out as well.

Switching to dollar reporting only gave this week's full-year figure an extra frisson, as 180,000 ounces of gold production tossed the barriers aside, allowing splendid figures to be tabled. The short life-expectancy of the Malaysian operations is still no shorter than it was - four years - as life is still coaxed out, although it is said that it will be difficult to repeat last year's record output; and of course the transformed cash position will have to be applied to the costs of developing the ZGC mine as well.

Gold is not for everyone, but with the equivalent of 8p of earnings tabled, an earnings multiple of under 10, and expanding production, Avocet looks worth further investigation.

[shirishg] 28/7/2004 16:10

Post removed by ADVFN

[bestbuddy] 28/7/2004 16:10

Well gold seems to be picking back up and if avm recovers from here it looks like a strong case of higher highs and lower lows since June which in my books indicates the begining of a recovery in the share price.
73p in the next couple of weeks!

[bionicdog] 28/7/2004 11:14

re post 4818
i am not about to enter into a debate on a subject i have no interest in with a wind-up merchant. i was merely pointing out that a cut and paste is not guidance.
oh and keep a civil tongue in your balding head , you must address me as mr dog.

[biswell] 28/7/2004 10:42

MACD is looking dire

B

[biswell] 28/7/2004 10:41

All AVM sma's now rolling over to the downside....pretty isn't it.

B

[biswell] 28/7/2004 10:36

Yesterday precious metals suffered sharp declines due to long liquidation by the speculative community as the Chairman of the Fed, Dr. Greenspan, gave a most promising assessment of the economy and for its future. In retrospect, once again it pays to take the other side of the trade when speculative excess is abundant. All in all, the precious metals simply shadowed the USD, falling as this currency rallied sharply. With the Euro down by almost 3 ½ cents for the week, with the Dollar Index up 216 points, the precious metals, following historical precedents, had no chance.

And, as expected, the gold market performed even worse, falling by about 4%, down $16.30 for the week, as compared with the loss of about 3% for the Euro. The silver market was walloped for 38 cents last week while the platinum group metals also declined, although their losses were rather minimal, platinum at minus $5 and palladium down by $6.80.


The gold market continues to daze and confuse many traditional analysts, who peer into the changing fundamental supply/demand criteria, who stubbornly persist in their beliefs that gold will soon carry the "terror premium" allegedly demanded by the marketplace, who see accelerating inflation rates in the USA forcing gold into a new wave of a bull market. But, all this is just a manifestation of the ancient emotions of hope, fear, and greed, anathema to the professional trader. The truth is simply that gold has been, and is, simply the flip side of the USD. While some days it might perform better, or on other weeks worse, at this point in time gold investors/speculators are simply foreign currency traders. Historical correlations and precedents bear this out in most convincing fashion. One day this will change but not for now.

$380 today? if not then by friday

B

[biswell] 28/7/2004 10:34

biswell - 28 Jul'04 - 08:50 - 4819 of 4821 edit


11.00 hrs, action may start a bit earlier today

B

Sorry 30 mins out will try harder next time

B

[biswell] 28/7/2004 09:20

AVM sub 60p by friday might wake you up then
B

[biswell] 28/7/2004 08:50

11.00 hrs, action may start a bit earlier today

B

[bionicdog] 28/7/2004 08:20

can cutting and pasting an article written by someone else really be considered guidance?
if so , you can declare yourself the undisputed agony aunt of these BBs.

[biswell] 28/7/2004 08:14

I have sold DJIA and NAS puts...but I have not gone long, like I did not the other week when I sold my FTSE puts why?

This is from another Telecomms thread.....but it hold good for gold if you read between the lines.....good that is , that it is pertinent to POG.

You lot are very rude to biswell......but I know you mean well, and are prodding me to give you some guidance on what the future may hold say next 5 months.

Well first you must read this and :


Dollar stages comeback on recovery hopes
By Jennifer Hughes in New York
Published: July 27 2004 12:00 | Last Updated: July 27 2004 17:19


Despite dollar-negative jitters early on Tuesday, the greenback staged a sharp, broad-based comeback on economic data that seemed to bear out expectations of a third-quarter pick-up in the US economy.


Traders prepared for a euro-positive day after a strong survey of German business confidence by the Ifo Institute and dollar-weakening reports that a flight out of Sydney bound for Los Angeles had been turned back. The euro reached $1.2186 in London in the morning from $1.213 in Asian trade.

But a strong US consumer confidence report, on top of buoyant home sales data, sent the dollar sharply higher across the board in early US trade. By midsession in New York, the single currency had tumbled to a low of $1.2036.

Consumer confidence as measured by the Conference Board's index rose to a two-year high at 106.1 in July, outstripping forecasts for a flat reading from June's 102.8.

Traders said rumours ahead of the report had suggested the reading would be about 107, but that most had dismissed that as unlikely. That dismissal made the dollar's rally even sharper, triggering a series of stop-loss orders against a range of currencies.

The data were particularly potent for the market following the bullish testimony of Alan Greenspan, chairman of the Federal Reserve, last week in Washington. Mr Greenspan had dismissed weaker figures for June as a temporary phenomenon and predicted economic strength in the months ahead.

"If this positive report is borne out by similarly strong durable goods and GDP figures this week, third-quarter growth prospects may be just what the doctor, or rather the sage of Washington, ordered," said Michael Woolfolk, currencies strategist at Bank of New York.

The dollar-positive mood was enhanced further by new home sales figures that showed a smaller-than-expected dip in the pace of sales. Transactions totalled 1.326m last month from a record rate of 1.337m in May. Analysts had expected the rate to slow to about 1.28m units.

The euro was not the only loser against the dollar. Sterling, at about $1.842 in the London morning, slumped to $1.8202 before recovering to $1.822 by midsession in New York. Against the yen, the greenback leapt from Y110.25 to Y111.11 on the data, while against the Swiss franc the dollar climbed to SFr1.274 from SFr1.201 as reports of the turned-back aircraft hit the markets.

"The market has been jobbing the dollar in a range against the major currencies for sometime and [on Monday] we broke out of that," said Chris Furness, senior currencies strategist at 4Cast economic consultancy, who added that Tuesday's durable goods report could provide further market turmoil.

"It will be one of those half hours [after the report] where anything could happen, even though we know the data are very volatile," he added.


Now before you get excited and think that a stronger $ as Mr Greenspan hikes the rates to 2.5% by xmas, and the above article suggests due to improved 'economic strength in the months ahead', 'consumer confidence', and expectations of a 'third quarter pickup'.

Have a look at the next post as to what will happen to the NASDAQ as the $ gains strength.

M3 (money supply), is also falling sharply during this period for your information.





Now then, every picture tells a story

Who can make a nice one up for biswell and all present, and give us the benefit of your araldite observations and conclusion/s on what the charts are telling us?

B

[banter] 27/7/2004 18:27

well on bloomberg today they reckon low of 375 and a high of 450 in next 2 years

[cinoib] 27/7/2004 18:17

Don't panic over the p.o.g., it's just a minor hickup, it will recover and then on upwards. According to the doom and gloom merchants gold will reach $700 an ounce by the end of 2005 and that's from an article in 1997 just befor gold bottomed.

[thenry] 27/7/2004 09:00

lol! do u really trade bis?

[biswell] 27/7/2004 08:53

One thing up yesterday for AVM......Volume

B

[biswell] 26/7/2004 14:57

Slow Stochastic on the drop, RSI pointing down.....1st Floor 55p ..all change

B

[biswell] 26/7/2004 14:55

POG: Going down again this time to $350 OK I was a couple of months out,big deal

Gold is drifting toward the lower boundary of its long-term rising trend-channel (green). It remains inside the channel - that's good. However, there are two Bearish price patterns in play, one fully developed, the Double Top, and one that will complete with a break below the lower boundary of the long-term trend-channel, a Head & Shoulders Top (orange). Gold moved sharply lower this week, hitting the lower boundary of a smaller upward sloping trend-channel (magenta) on Thursday. A break below 394 is Bearish. A break below 387 is very Bearish. The 50 Day moving average remains 6.25 points below its 200 day moving average, and has converged with the lower boundary of the magenta short-term upward trend-channel. The RSI Indicator is neutral with plenty of room to fall. The MACD is breaking down hard. Momentum is down. If you are keeping the Elliott Wave count at home, we have seen a wave 1 down from the April 433 top to the May 370 low, then a wave 2 up that closed at 411 in early July. It looks like wave 3 down may be underway.

B

[chambeaj] 26/7/2004 13:59

He already has - its was June 2004.

[goml] 26/7/2004 13:36

biswell,

saying a share will sell off after results is like predicting the sun will rise in the morning. you need to do better than that if you wanna be viewed as a guru.

tell you what, why dont you state what the timeframe is for your prediction of gold at $350?

[biswell] 26/7/2004 13:27

goml - 26 Jul'04 - 13:04 - 4805 of 4806


biswell, it's a healthy sell-off post results.

Presumably AVM will be a healthy 55p soon then Heheheh (Muttley style best used)

B

[biswell] 26/7/2004 13:25

goml

Tell me something I don't know

I posted the share would drop after the results weeks ago....

Wy yu no wissen
B

[goml] 26/7/2004 13:04

biswell, it's a healthy sell-off post results.

all stocks do this, not just gold stocks.

the question here is where the POG is going in the short term, as it could lead AVM lower, may be even to support at 57p. but on the plus side the results gave us EPS 6.7p which acts as a significant supporting factor. gold would have to do a big slip to make that historical PE ratio completely worthless when valueing this share.

neither you nor anyone else knows where POG is going for certain. one thing i do believe though and that is, that if you are calling POG to $350 then your entry point is above that level, probably about 370 - 375, looking for a double bottom you are yes?, hmmmmmm master luke. you are impatient though, i sense it in the force. you would be wise to listen to master yoda.