Avocet Mining Share Discussion Threads

[saucepan] 07/10/2005 15:06

Thanks for sharing, bud.

[budevenwiser] 07/10/2005 09:51

just had an email from jonathon henry
no plans to announce any drill results in the short term , a little more work to be done will probably wait till interims

dont know what happened to the going to jakarta to announce them early oct
but thats mining for yer

[jk8] 07/10/2005 07:22

yikyak - you may be right. I just haven't yet worked out the logic in the movements of the AVM share price. I'm very patient but get frustrated when a share price seems to defy all reasonable logic.

[andy] 07/10/2005 00:47

Holdontight,

He made his own decisions, I NEVER give advice as I am not qualified to give it!

I doubt you are either!

[yikyak] 06/10/2005 22:41

JK8, do you sometimes get the feeling that UK listed miners are used as a hedge against North American ones! I've never really got to grips with the UK pm equities, they often seem to go down when golds up yet remain dormant if it's down but slide if it's down a lot. Often though they will pop up with no reason when i've had a bad day on the other side of the pond. Nothing to do with $/£ gold either.

What we need is volume in the sector as all the action is controlled by a handful of participants that toss it around at their whim.

[holdontight] 06/10/2005 20:48

Then you need friends who know when is the right time to buy, unless of course you were the one giving them advice !

[andy] 06/10/2005 20:35

JK8,

LOL!


Holdontight,

Not sure who you are referring to, but I have held AVM for a number of years, so can hardly be accused of being an impatient, fast buck merchant, IMHO.

I feel there are things that could be done better, and would promote AVM, but I thought we had already drawn a line under that subject.

My friend lost a LOT of money on Pace Micro!

[holdontight] 06/10/2005 20:22

You know, IMO some posters are just way too impatient with AVM. As I posted a few days ago, this is a 10-bagger from 3 years ago. It is also still a developmental company, rarely fails to deliver; doesn't over sell itself and is growing organically.
I think back to my first real investment, Pace Micro.....purchased initially at over £1, they fell to 22p, I topped up, then they rose very very quickly to over £12......!!!!!!!! Exactly the same kind of movement can be expected / hoped for from AVM....WORK THAT ONE OUT !!! But time and patience as always are required.

Tech market boom = gold marlet boom, but latter will be BIGGER !!!!

HOT

[jk8] 06/10/2005 20:09

Well the POG is doing very nicely - so i guess the share price will be down again tomorrow?

[doobydave] 06/10/2005 17:25

bud,

I would have thought it more likely that Henry & Catchpole will announce on Monday when they're safely ensconsed behind their desks and in a position to answer questions? Either way, we should hear very soon. Let's hope it's as good has some have intimated here.

Cheers,
DD

[johnnywishbone] 06/10/2005 17:19

(AFX) - December gold is up $6.60 at $475.90 an ounce Thursday morning, finding immediate support from weakness in the U.S. dollar and expectations for higher demand. "It is pretty clear that gold is mostly inspired by pure physical demand expectation," said Nell Sloane, an analyst at NSFutures.com. "Therefore, the gold market should be lifted by recent news from the World Gold council that projects Indian gold demand for 2005 to increase by 33% to 850 tons, due to improved economic conditions in that country," she said in daily commentary.

[budevenwiser] 06/10/2005 16:17

jonathon henry and john catchpole are in malaysia and are flying home tomorrow night local time , so if they are annoucing idenberg it could be tomorrow
funny he told me jakarta

[retford1] 06/10/2005 13:37

Nice one Budevenwiser, looking good!

[budevenwiser] 06/10/2005 11:40

just what the doctor ordered this , a little correction , get rid of the weak holders , get those indicators down a little from overbought just before idenberg news
i know some people dont bother much with the charts but just out of interest we have had 2 golden crosses within the last fortnight , last week the 100 went back up thru the longterm 455 and this week the 50 went back up thru the 200
another couple of weeks and the 100 should go back up thru the 200 and then they are all in the right place
i'd also like to add the 20 should now provide support , it is around 96 and climbing , check out the 3 year chart with the 20 on

[kojak78] 06/10/2005 08:01

"On the strength of these acquisitions, the company has appreciated as much as 430% since we began following them in the Casey Energy Speculator.

Perhaps the most remarkable thing is that Sterling's run has come without drilling a single North Sea well. The stock price has risen purely on increasing investor interest in the area, and the market's recognition that SLG holds some of the best ground around."

Recently a new solar energy company went public in Germany. p/e 120, price to book 30. Solar energy prices paid to the producer are fixed to 54 Euro cent in Germany while the market price is ca. 17 cent. Keeping in mind that coal power plants produce for 3 cent solar energy isn't viable.

Both examples show that Avocet, based on past production and earnings, would cost above 1000p in a mania. Taror/Chore and recent developments would bring that amount to 3000p, a gold price of US$2200 and a mania would catapult the share price above 27000p at p/e 120. Of course that won't happen as in manias people tend to like worthless trash the most, Avocet is too large for that to happen.

[andy] 05/10/2005 14:28

Bud,

Many thanks, appreciated!

[doobydave] 05/10/2005 00:17

How about 'Avocet Gold Mines'? That would differentiate AVM from gold explorers (as opposed to producers) who often also flatter themselves with the suffix 'XYZ Gold'.

[budevenwiser] 04/10/2005 23:57

andy
i would also like to offer my apologies back to you
you have just as much right to your opinions even if i dont agree with some of them i had no right to jump down your throat
glad to see our thread back in harmony again
after all we all want the same thing dont we
good guess Lancs
cheers

[andy] 04/10/2005 20:17

Kojak78,

Thanks for your post, and yes I guess we are all talking about GFM after the spectacular rise of the last few days. I have top sliced mine early this morning, and have a virtually free holding, which I will probably hold for the longer term.

I agree that compared with GFM, Avocet is undervalued, and that's probably the cause of my frustration with AVM!

I see the GFM rise as a result of a careful marketing campaign, starting at their AGM, when Ninkov announced they would be receiving $300 per ton ABOVE the LME price for their zinc, collected from their gates. They have since released, IMHO, two carefully worded RNS, then a Shares Mag tip, followed nine days later by a Sunday Telegraph tip, and away it went!

I found your comments on the hedge interesting, and I can see your point about closing at the wrong time.

At the AGM they seemed confident that Taror and Chore could be built under the original budget, and that progress was being made, perhaps they will update us with the interims?

[andy] 04/10/2005 19:57

Bud,

Thanks for a considered response, upon reflection my earlier reply was too harsh, so please accept my apologies.

I agree the formal part of an AGM is tedious, but I attend to have the chance to converse with some of the directors afterwards. I have always found directors of those companies that I have attended friendly and pleased to chat informally, as indeed were the AVM directors.

For the AVM AGM I had a 200 mile round trip from Bournemouth, but I work in the London area, so sometimes am fortunate in being able to nip out and have a long lunch. In your case, I agree, it's far too far, you must be around N. Yorks, or Lancs, quite a hike.

With regard to the name, although I would like to see it change, it's not on the agenda, and as Kojak says above, it does give them the scope to mine other minerals if the oportunity arose.

With regard to the reserves, you're probably right, the lack of long term at Penjom is seen by the city as a drawback, even though they seem able to increase the resource every year. They did say at the AGM they would be "updating the reserves" with the interims in November, which I took to mean an upgrade.

Some good discussion now on the thread, and interestingly AVM held up well today when a lot of other resource companies fell in price.

Regards,

Andy.

[kojak78] 04/10/2005 14:27

Hm, I wonder why everyone keeps mentioning GFM. Assuming US$700 producing costs and US$1300 zinc price (that were the typical producing costs and price when I did a research on some zinc companies a few months back) GFM production is worth ca. 44000 oz of gold assuming US$200 production costs. Not much.. Of course I don't know how high/low production costs will be, 7.x% Zinc is not very much compared to deposits companies like Oxus or ZincOx owned. At least the gold byproducts come for free.

A quick look should show you that Avocet should cost 2x to 4x the amount GFM costs.

I don't want to argue here, I don't even want to say GFM is expensive. It's a very good investment IMO, perhaps better than Avocet. But GFM just is not a proven producer. It's as simple as that. I don't invest into explorers, that's my primary rule. I think Avocet and GFM attract very different types of investors. GFM is blue sky potential / growth while Avocet is value, asset based investment - with a lot of blue sky potential, too.

@Andy
You're making a lot of good suggestions. Avocet Gold vs. Avocet Mining *will* make a difference. Just look at the web mania at some time. I guess the gold name will give 100 to 200% performance, but only in the 3rd phase of the bull market, the mania phase. Until then it won't add anything and deplete precious cash resources. I like the name mining personally because it offers flexibility to expand into other mining areas as opportunity arises. Management has to decide which path they intend to follow. Avocet Gold with a pump and dump scheme at the end of the mania (2010 or 2012 or something like that) or Avocet Mining as a viable long-term (=decades) business. Investors will earn more by following the first route..
Then I like to say that your suggestion about closing the hedge by financing is short sighted. I suggested closing the hedge when price of gold was 330. Of course I admitted that doing so implyed opportunity costs. North Lanut would not have been built if the hedge were closed back then. So it was indeed better to finance North Lanut first. Now we have several options. Close the hedge by bank credit, close it by financing or by phasing it out and use the cash for Taror/Chore construction. The first option doesn't seem to be viable. Macquarie bank credit brings with it mandatory hedges. The second one isn't viable, too. Closing the hedge is like buying gold calls with a base price of US$300. Worth more than cash and gold, but worth about the same as gold miners like Newmont and way less than Avocet shares (which are undervalued 60 to 65% IMO). You will lose money by diluting the share capital. Then there are the opportunity costs again. Companies like DRDGold crashed despite being unhedged, in fact they closed their hedges at the worst possible moment as the Rand gold price lost 40% or so and the hedges would have been deep in the money even now.

Glad to hear you attended the AGM, though!

Somebody mentioned a 10x increase in Avocet's share price. I assume Taror and Chore feasibility will be positive and the mines can be constructed with cash flow and bank credit, without share dilution. That means we have the first +200% by undervaluation based on reserves. We need +233% by an increase in the price of gold. That means the cash margin needs to be US$580 higher which brings us to ca US$1050 price of gold. We could very well reach that level in 2 to 3 years as the oil price implies much higher gold prices already (in fact I expect the current low in the gold/oil ratio to hold more than 50 years).

I doubt the 1000p level will be reached in 3 years, but I think the 500p level is very reasonable for XAU levels of 200 points which will be reached in the next 18 to 24 months as Frank Barbera suggests (his long term XAU charts are very very interesting..)

Just my US$0.02..

Good luck to everyone, all roads lead to Rome!

[budevenwiser] 04/10/2005 13:51

fair enough andy
personally i dont think a name change will make any difference
better pr or promotion may help if it were directed towads american or canadian fundmanagers , hedge funds
as regards the agm i have been to a few agm's and found them a total waste of time and wont bother again ( none of avm's )i live about 220 miles from london in the north and cant see the point of traveling down there when i can pick up the phone anytime and ask my questions then , which i am going to do this week
now what do you think about my suggestion it could have something to do with reserves at penjom and n lanut , give me a miner any day who will produce 120 000 ounces form a reserve of 1.2 million over 10 years than one that produces 60 000 from a reserve of 5 million over decades and i'll have a bet that the latter is valud 5 times higher but my view does'nt count where it matters its what the fund manglers think

[holdontight] 04/10/2005 13:08

POG is looking very exciting....I can see a break of $500 with some ease by year end....the trend seems to be towards that, anyway.