Avocet Mining Share Discussion Threads

[doobydave] 06/6/2005 12:21

It is pretty obvious that the market has looked at a) the cash costs (in two of three mines actually exceeding the current gold price), b) the hedged production and c) the headline reduction in full-year ounces and valued it accordingly.

In the short term, these are undeniable facts. Beyond the summer, the picture should look very diffferent as North Lanut should be approaching an annualised 50,000 oz at $200/oz (possibly less). Likewise, Jilau is being prepped for full production - it's not clear when the waste stripping will be complete, but should be announced with other updates at the next RNS (planned 13 July, see above).

In the meantime, I doubt there is anything the company can do to boost the share price except engage in pr tours (only done if fundraising is in view) or potentially some token director buys. If I were a director, looking at this chart, I'd be planning for 65p around September time.

In the end, the share price will take care of itself. I don't think there is much wrong with Avocet Mining.
DD

[doobydave] 06/6/2005 12:06

AS a reminder, here's the last RNS:

RNS Number:9659L
Avocet Mining PLC
06 May 2005

YEAR END AND FOURTH QUARTER GOLD PRODUCTION, CHANGES TO MANAGEMENT

Avocet Mining announces that total gold production for the financial year ended 31 March 2005 amounted to 172,938 ounces (2004: 180,203 ounces), and included fourth quarter production of 50,264 ounces (Q4 2004: 45,041 ounces).

Gold production from Penjom in Malaysia amounted to 32,260 ounces for the fourth quarter (Q4 2004: 30,013 ounces) bringing Penjom's total production for the financial year to a higher than expected 119,846 ounces (2004: 124,432 ounces). Total cash costs at Penjom are estimated to be US$203/oz for the financial year (2004: US$192/oz).

Production from JV Zeravshan LLC (ZGC) in Tajikistan for the fourth quarter was 9,827 ounces (Q4 2004: 15,028 ounces), bringing total production for the financial year to 44,241 ounces (2004: 55,771 ounces). Total cash costs at ZGC are estimated to be US$439/oz for the financial year (2004: US$320/oz). The increased unit cost and decrease in production at ZGC were primarily on account of increased waste stripping needed for the reopening of the Jilau Main open pit and a large proportion of production coming from low grade stockpiles. The recent trend in costs and production will reverse as Jilau Main becomes a far more significant source of ore over the next six months.

Now that progress has been made towards expanding existing operations, ZGC has commenced feasibility studies for the development of two of its developed underground projects, Taror and Chore, with the objective of adding 100,000-150,000 ounces per year of gold production within the next two years.

Gold production from the Company's new gold mine at North Lanut in Indonesia amounted to 8,177 ounces for the fourth quarter bringing total production for the financial year to 8,852 ounces. Total cash costs at North Lanut are estimated to be US$500/oz for the start up period, as the gold inventory in the dump leach pads builds up prior to the operation reaching steady state. Cash costs are expected to reduce to below US$200/oz once the dump leach operations build up to their full production capacity.

Full details of each operation, including updated resources and reserves, will be announced at the time of the Company's preliminary year end audited results due on 13 July 2005.

In the past two years, the Company has increased its operations from one gold
mine in Malaysia to three gold mines in both regions of the world where the
Company is committed to further growth. In recognition of this, the Company has restructured its senior management. Eric Vesel, who has been with the Group for a number of years, more recently as the general manager at Penjom in Malaysia, has been appointed to the position of Regional Manager - South East Asia. Jay Layman joins the Group as Regional Manager - Central Asia. Jay was formally a senior manager with Newmont Mining Corporation in Uzbekistan, the USA and Indonesia, and with Pegasus Gold in Kazakhstan and the USA.

[kojak78] 06/6/2005 11:58

I don't think POG or interest rates have anything to do with Avocet's share price as long Avocet is so undervalued. Imagine buying Newmont for US$6.. Even trash miners like DRDGold are valued much higher, once production goals are met and it becomes clear that the production won't stop at 300000 and the exploration team is able to replace reserves we'll see the end of this perversity. I mean, based on current figures the p/e is below 6, in a sector with p/e averages of 30 or 40..

In the end POG, stock market crash etc. will affect Avocet's share price by double-digit percentage rates while the undervalued situation will affect the share price by triple digit percentage rates.

[bionicdog] 06/6/2005 11:56

I notice that our old friend has today discovered charting over on the CBM thread.

[pecker1] 06/6/2005 11:53

yikyak,

Agree with your take on current situation.

Frankly, there is no excuse for AVM's inept and clueless performance on communications. The new website is an improvement but it needs something new on it! The latest media comment under the "current" heading was 11th February.

I'm surprised the Chairman hasn't stepped in to shake them out of their stupor, particularly after having bought another large slice of shares at a much higher price a few months back.

[corrientes] 06/6/2005 11:51

I think the company couldn't care less about the share price, and nothing happens to prove me wrong.

[goml] 06/6/2005 11:43

yikyak, may be i'm just being pedantic but technically we havn't double bottomed we've hit a new recent low. on the plus side though, 70p looks like a support line but we'll just have to wait to see if it holds.

[yikyak] 06/6/2005 11:35

I think the problem is that the stock is plagued by shorters as the management do little or nothing to promote the company and so it's regarded as safe territory that side of the trade. Obviously they will have to cover at some stage but at the moment the shorts very much rule the roost and have done so for quite a while, so much so that it deters longer term longs from taking a position.

As ever though situations can change rapidly although i'd say we were more reliant on the shorts choosing to close and reverse their positions rather than being forced to by any initiatives coming from the management.

I happen to believe however that we will start to move up from today after the double bottom.......we shall see.

[goml] 06/6/2005 09:21

You'd never think it looking at AVM's shareprice! ho hum

[jk8] 06/6/2005 08:56

Euro stuffed, dollar stuffed - what currencies are still classed as solid, apart from the Swiss Franc of course!

[goml] 05/6/2005 13:14

JK8, fair comment, I was one of the people who thought gold was going lower, I don't mean to sound like that plonker Biswell because I'm a long term AVM holder but I think I'm going to hold off on patting myself on the back for the moment for holding through PM weakness since the summer's not over yet and there's still plenty of time for more weakness.

Listening to the news this morning I noted for the first time discussion about whether the Euro has a future. I can't believe it's anything more that idle speculation on the back of the recent votes but it may be enough to give more Euro weakness. At the moment it would feed through to dollar strength and test gold again. I'm not convinced gold has de-coupled from the dollar, although it may be trying to.

[corrientes] 04/6/2005 10:55

More profit converted into more exploration, but when's the dividend going to be announced. That's what's wanted IMO.Is there a planned dividend policy ? All the time the management are getting their salaries, and the shareholders are getting zilch, what's the point of having this share other than maybe watching it reflect the general sentiment for PM's. This company is supposed to be a cut above the rest, but I see no evidence of it.It's always tomorrow.
I am a holder. but getting restless.

[jk8] 04/6/2005 10:26

goml - I think that a lot of people will be surprised that gold didn't hit $400 given the recent "strength" of the $. I can't remember the last time the POG was at £233- so perhaps there has been a currency decoupling already (like what appears to be happening with silver).

If that is the case then surely the share price will move up sooner rather than later.

[biswell] 04/6/2005 08:35

Please believe me when I say
I think there is some pain on the way


AVM to fall to less than 60p by end of July

B

[goml] 03/6/2005 20:55

Can't see AVM going anywhere until end of the summer (at the earliest) in line with the gold price cycle of recent years. Gold shares follow the price of gold.... and the price of gold is just a function of US dollar value (at the moment!). The value of the dollar is mainly tied to interest rate policy in the US in the short term (longer term other factors play a bigger role, massive deficits, Chinese currency revaluation, etc). So the near term question is where are the rates going, the market has been assuming they carry on going up but a recent slew of unfavourable economic news suggests that is not necessarily a foregone conclusion.

For what it's worth, I think US interest rates will be pushed to the consensus neutral ground between 3.5% and 4%, which would mean another 2 to 4 quarter point rate increases. After that they'll have to pause (CPI and PPI are hardly out of control and the economic data is not exactly stellar) and may even have to start back pedalling next year if signs of economic stalling start to show. Given the fact that markets undoubtedly anticipate news and price it in, in advance, and the rate increases must be almost finished, I'm not too worried about the dollar strengthening significantly from here.

I suppose a big question is, if an economic slump is coming, which would definately knock equity markets, how will PM stocks hold up? It's probably stating the obvious to say that if the price of gold holds up and doesn't succumb to a general weakening of commodity prices (which will come with an economic slump as sure as night follows day) then PM stocks will rock. PVEeden's view is that gold is money and even if other commodity prices slip (because they're demand driven), gold will hold fast as people use it as a hedge against the coming economic uncertainty.

[dixi] 03/6/2005 19:50

Hmmmmm - I wonder were the shareprice will be by 13th July?

The IC most be hoping for a run up to then after their tip at over 80p.

[biswell] 01/6/2005 10:06

SMA (144) and SMA(233) just about to cross .....see the rampers thread chart, the one where 300,000oz production by 2006 isn't talked about any more, since last years production DROPPED by 7,000 oz

Oh by the way a X should mean a drop in share price like the last 2 crosses in other SMA's have done...the share is falling you see

B

[sandoval] 31/5/2005 23:09

W.Buffet and B.Gates think the $ is going to go down........when ?

[trader horne] 31/5/2005 12:51

it's only toasted on one side so far, be patient ..

[biswell] 31/5/2005 11:18

Cor look at that GOLD dropping again...who would have thought it eh ?

Everyone cept me was saying the dollar was toast

B

[biswell] 28/5/2005 09:42

FACT

LAST YEARS PRODUCTION FELL BY 7,000 OZ....

Don't believe what the rampers are saying on the 300,000 oz production thread

I will now give my price prediction for the little birdy...holders will NOT like it .....but I tell it like I see it.

As you can see the tide has ebbed for AVM the momentum is now down as is RSI and macd

A nasty head and shoulders is forming and with GOLD about to fall in the face of a resurgent dollar I predict a price of 55 to 60p before xmas.....ouch !





B

[cleo1601] 28/5/2005 00:25

biswell
you appear to have added talking to yourself to your other symptom (insomnia). I really think you should seek some help. Take care and remember money really is not everything; without good health and a sound mind, what use is money?

[biswell] 27/5/2005 12:17

DoobyDave has shut his trap of late....cos he ain't got anything to say that is coming true about this stock.

Fact of the matter is

Production is falling NOT rising

Cost of Production is rising

B

[biswell] 27/5/2005 12:13

All the plonkers that left this thread and went to the P thread following the serial rampers of this stock have lost money

I on the other hand have not

FWIW I also called OXS down to 40p and NEM down to $37 a couple of months back also.....so you are not alone

B