Avocet Mining Share Discussion Threads

[corrientes] 07/1/2005 21:41

If everyone 'knows' that AVM is such fantastic value, and this has been bandied about for two years now, both during bullish and bearish periods,then the market might be saying that there's no guarantee that the forecasted huge increase in profits will materialise, or don't believe it.As much money might be spent chasing resources as could be paid out in dividends could be one way to construe this.Of course,AVM supporters (I am one) won't have this.

Therefore I just wonder whether at the end of the day it wouldn't have been better to have stuck to the main board rather than going on to AIM. Other than the multinationals,there aren't that many 'British' gold miners quoted on the main market.The company might have attracted a wider range of institutional investors who would be given the assurance that the lighter AIM regulations didn't apply. That would surely boost the company's profile and therefore enhance the share rating.

[scotinvestor] 07/1/2005 20:45

broker

u r too kind with your opuinion of biswell. i know cretins will be horrified being compared to biswell, haha.

Yeah biswell tries to look for disasters, Iraq elections plus US data to try and convince us that POG will fall. The Iraqi elections wont do much as violence will continue for ages yet there. And i'm sure elections will be rigged as elections are rigged in many countries in the world at present even from countries that had them for ages like Russia, Ukraine and Uzbekistan to name a few.

Even if biswell is right and AVM falls to 78p, big deal. I'm still up on them like most of us here and can wait for next year or 2 for massive correction. We will be rewarded eventually

[broker200] 07/1/2005 19:09

I am a very strong fan of balance sheets ( good ones ) i value AVM to be a top performer by 2006 with a target price of £2.90. I however take displeasure of BIS using the disaster & gold price to try to manipulate his total moron posts to get this to 78p, i am sorry if people think i am out of order, but i think BIS is a total cretin.

P.s.

It was only a few months ago that BIS said oil was going back to $25 a barrel and Gold to $350.00, the guy keeps changing the goal posts, he's a complete utter Moron in my eyes.


Sorry ADVFN but it must be said.

[pecker1] 07/1/2005 19:01

I maybe wrong but my take is that by delivering 88K oz into the hedge AVM cannot sell those same oz at todays spot prices, i.e. it realises less revenue per oz than it would otherwise have done, hence the opportunity cost in lost revenue/profits. And I'd rather AVM picked the moment than have it chosen for them by the counterparty.

These spot deferred are perhaps fairly tame as derivatives go. Nevertheless, many US investors will have Warren Buffet's description of derivatives as "toxic waste" in the forefront of their minds.

Not sure how many readers of this thread could write a 500 word essay on the pros and cons of spot deferred hedges. I certainly couldn't! AVM is a miner and I'd prefer they followed in the footsteps of Glamis and Goldcorp and other non-hedgers.

[bionicdog] 07/1/2005 18:54

dave
it might be an idea to take the link off the old thread for a while. i want to see how many consecutive posts bis can do before he realises.
edit
having just looked , it isn't there anyway. i meant a link in the old thread directing lost souls to this one. not to worry , leave it as it is for entertainment value.

[captain swing] 07/1/2005 17:57

With spot deferred hedging (which this is), surely there is no "winner" if AVM delivers into it... all they do is release funds which have been on deposit since the hedge was set up, and hand back the gold (which was originally sold to obtain said funds) to whoever it was leased from?

I heard (probably from Ashley) that the counterparty was Macquarie, but they would not necessarily be the ones who leased the gold, its more likely to be a central bank. Also there was a statement floating around that the counterparty was happy to roll over the hedge as long as Avocet was a viable gold producer.

[pecker1] 07/1/2005 17:48

DD,

I understand that Catchpole said at the AGM that it could be rolled over provided that the counterparty (ie the bank)agreed and there was no reason to expect them not be happy to do so.

[doobydave] 07/1/2005 17:36

Thanks for all the comments guys. I promise that any censorship will be with a light touch. Still, the other board has already become comic! So much so, that I have kept it as one of my favourites :->

Bionicdog, the link to the last thread is in the old position just above the charts, but with an appropriately amended link.

Good hunting to us all this year. AVM looks very solid indeed to me.
DD

[pecker1] 07/1/2005 17:34

The only minor irritant for me in AVM's financials is that 88k oz hedge at around $300.Perhaps it could be deferred beyond 2006 but if the gold bull continues the opportunity cost of closing will increase, albeit spread over a greater output.

So with under 3 months of the current FY to go, perhaps they could make a start on reducing the hedge and take a little of the hit this year. Much less painful with gold at $418 than £450. Together with all the other plus points, an unhedged label would help to market AVM to US investors.

Worth doing or not worth worrying about?

[goml] 07/1/2005 17:06

Thanks Dave, this is now my thread of choice :-)

Bionicdog, yes it's a real shame he can't control himself better because we are all poorer for censorship.

[bionicdog] 07/1/2005 16:17

other thread makes amusing reading with you know who ranting at himself :o)

[pecker1] 07/1/2005 09:23

DD,

Thanks and understand why. My other concern that newcomers to ADFVN would not be able to find this AVM thread has been allayed as bionicdog has pointed out.

When I'm investigating a new share I find the BBs can sometimes be a useful pointer to sentiment and to an info source I may have missed. So if a more sensible thread helps a few more people to become aware of AVM's strong fundamentals then all to the good.

[taylor20] 07/1/2005 09:02

on expected economic impact of Tsunami on the region:

"06-01-2005: DBS Vickers maintains overweight on Indonesia, Thai, Msia equity

DBS Vickers Securities (Singapore) Pte Ltd has maintained its 1Q2005 overweight recommendations on Indonesia, Thailand and Malaysia equity.

"The Boxing Day tsunami has not fundamentally altered the longer-term economic prospects, and we expect the impact to be limited and short-lived.

"Reconstruction investment in the coming quarters will sustain GDP (gross domestic product) growth and will offset the initial capital loss," DBS Vickers Research said in a report on Jan 6.

It said international aid coupled with fiscal incentives and resource commitments would further cushion the economic fallout.

"Despite the expected initial drop in 1Q2005 GDP growth because of the capital destruction, we are maintaining our 2005 real GDP forecast of 5.6% for Indonesia, 5.8% for Thailand and 5.7% for Malaysia, given the expected pick-up in reconstruction investment in the subsequent quarters," said DBS Vickers Research.

It said Malaysia was the [least] affected according to official preliminary estimates. "The entire economic infrastructure remains intact, with the economic loss estimated at a relatively negligible sum of RM100 million or less."

[saucepan] 07/1/2005 08:21

Thanks, dave. I look forward to the continuing discussion and, hopefully, an excellent 2005 for AVM.

[bionicdog] 07/1/2005 07:59

might be worth putting a link in the header of the old thread.

[bionicdog] 07/1/2005 07:56

cheers dave , hopefully this one should read a bit better than when i logged on the other morning to find about a dozen consecutive posts by bonkers. i don't think anyone can complain , as a quote for AVM shows this as a FBB thread.

[chipperfrd] 07/1/2005 00:22

Dave - thanks for your efforts.

[mieke] 06/1/2005 22:56

Nice one dave well done

[andy] 06/1/2005 21:56

Dave,

Thanks for taking the trouble to start up the new thread!


Gold now at $421.

[doobydave] 06/1/2005 21:38

Hi All,

Thanks for the responses on the old thread. I agree with Andy that the best of all worlds is to put it on the PBB with full reading and writing writes to FBB members. The only difference is that I retain moderation rights. For reassurance, I am going nowhere in the foreseeable future :-)

Respect to those with a liberal mindset, but it just isn't worth letting deliberate destroyers onto the board. Plead as we might for use of the filter button, characters like Bis always generate heated responses. The board promptly stops becoming a sensible and informative discussion forum and starts resembling a patch of ground behind the school bike sheds.

Please DO feel free to post bearish challenges, backed by figures and in moderate language. You may even be doing the bulls a favour.

As ever, suggestions for improving the header are welcome.

Regards,
DD

[doobydave] 06/1/2005 21:33

Avocet Mining is focused solely on gold in Asia. In the year to March 2006, it achieved production of 208,000oz and has a medium-term goal of 300,000oz (annualised) by 2006. Gold resources are currently over 7moz by JORC standards.

Profit for the full year to March 2006 was a rather flat $11.2m, reduced by liquidation of the hedge, significant capital outlay and higher operating costs. However, future prospects are exceptional. Cash reserves then stood at $12.9m but have since been bolstered by a share issue of $50m at £2.00 per share – a premium to the current share price As of June 2006, AVM has no hedge position but has acquired put and call options to the tune of 10,000oz per month. As a result, the company can manipulate its sales between $450 and $700/oz gold – a shrewd move.

The Company's principal assets are...
Malaysia: 100% owner of the Penjom mine, the country's largest gold mine. At the end of 2004, it had 809,000 oz left (v. conservatively), with known extensions excluded. Cash costs are $234/oz. Mined at the current 120,000oz pa, Penjom has a minimum of 6-7 years of life left. However the pit has been extended and there is more to come.

Tajikistan: 75% owner and operator of Zeravshan, Tajikistan's principal gold mine. The Government retains 25%. Expansion and refurbishment is now underway, aiming to double gold production to 100,000 oz pa and reduce production costs from an expensive $650/oz (during stripping) to below $250/oz. The 2007 target is a more modest 60,000 oz at $500/oz.

Indonesia: 80% owner of North Lanut, where Avocet is building a mine at North Sulawesi's Riska deposit, the first new Indonesian gold mine of significance for six years. Production is roughly at design capacity of 50,000oz pa at $200/oz all-in cost. Avocet expects to extend the 5yr mine life. On the same land package the near-surface Bakan deposit has the potential to host another mine.

Elsewhere in Indonesia, Avocet has a new joint venture on New Guinea, home of the famous Grasberg mine. At Kali Sua Sinta, drilling has barely started but early results are promising, e.g. 7.5m at 16.0 g/t Au from 21m, 3.0m at 35.0 g/t Au from 107m and 3m at 17.7 g/t Au from 55m. Rock chip and soil sampling in the locality supports the idea that length and grade are present. Exploration will give Avocet earn-in rights to 51%.

Western China: In Nov 2005, Avocet acquired a 21.4% interest (potentially rising to 35.6%) in TSX-listed Dynasty, whose main Hatu property boasts an independently verified inferred resource of 16.8mt at 1.68 g/t Au (912,600 oz Au). Dynasty can earn up to 80% by spending US$12m (US$3m spent to date). Avocet's strategy is to exploit synergies with Zeravshan, its operation across the Tajikistan border, but will be helping Dynasty to achieve early production once the resource is upgraded. Potentially more important in the longer run is the foothold in China, and the interesting association with Caledon (CDN), who appear to have brokered the deal with Avocet and who will independently end up with 13% of Dynasty.

Number of shares in issue: 122 million (Elliot 15.4% Artemis 12.34% Management 6% AXA 11.26%).

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[doobydave] 05/9/2004 17:02

Oops... -->corrected , but Andy's done the business now anyway.

[andy] 05/9/2004 15:10

This is the link!