Avocet Mining Share Discussion Threads

[holdontight] 20/10/2005 14:41

headed back for a £1+.....90p provided support as expected and Biswell proved excellent contra-indicator as usual!

[kojak78] 20/10/2005 08:00

My quick calculations of NPV show 433 mio with Taror/Chore and 272 without. That means AVM trades at 0.32 or 0.52 times NPV while the Barricks and Newmonts trade between 2 and 2.5 times NPV.

Do you know any stock that trades at a lower price to NPV ratio?

[bionicdog] 19/10/2005 19:28

If only that were true (the keeping quiet bit obviously).

[biswell] 19/10/2005 10:48

Double top chart formation now in

Deja Vu I came in on this shape in early 2004 with a prediction

This time I will keep it quiet

B

[kojak78] 19/10/2005 10:46

Taror/Chore pre-feasibility

Gold price US$/oz (from 2002) 315
Copper price per pound (after transport cost) 0.76
Gold ounces produced 1,888,644
Copper pounds produced 73,936,515
Revenue US$000's 647,702
Operating Cost US$000's 447,999
Operating cost per ounce (equivalent) US$/oz 203.65
Capital cost US$000's 52,400
Sustaining capital 16,646
NPV US$000's @10% 46,500
Mine Life (from 2002) 14 years

could look like this today assuming 30% higher costs on all things:
Gold price US$/oz (from 2007) 470
Copper price per pound (after transport cost) 1.88
Gold ounces produced 1,888,644
Copper pounds produced 73,936,515
Revenue US$000's 1,026,663
Operating Cost US$000's 582,399
Operating cost per ounce (equivalent) US$/oz 234.77
Capital cost US$000's 68,120
Sustaining capital 21,649
NPV US$000's @10% 160,205
Mine Life (from 2007) 14 years

More than the enterprise value of 130 mio..

[kojak78] 19/10/2005 10:03

The last financial report reported that net current assets were 23 mio back in march (no long term debt). I think the interim report will be slightly disappointing, but we could see current assets around 30 mio I guess. Assuming a worst case scenario with flat 2006 net current assets beginning in financial 2007 will be 35 to 40 mio. That means enterprise value of 130 mio with worst case scenario earnings in 2007 at slightly higher gold prices of 32. p/e 4 in such a worst case scenario. The question is: will Penjom produce another 4 years? Assuming a best case scenario with Taror and Chore as producing mines the gold price would need to be US$660 average in financial 2007 for the p/e to fall below 1.

[kojak78] 19/10/2005 07:58

The Euro at 1.1887 ?? That's it, the Euro bull market is done. Lower lows..

Of course we all know that teh US trade deficit will *not* be closed be a fall in the US$. It will be closed by a crash in US consumer demand.

To be honest I expect a dow crash any dow now, perhaps they'll support the markets until Greenspan has left.

[kojak78] 19/10/2005 07:53

"If prices continue to decline, on a closing basis, below USERX 8.81, safety is strongly warranted. I do not have other buy signals sitting below current levels. "Safety" is the nice word for "Sell" because I cannot predict the length or depth of the decline and it could be quite severe."

USERX closed at 8.78 yesterday. Could be the end of the SKI "true bull".

[kickstart] 19/10/2005 01:07

Gold will soon resume its upward trend. The PPI number in the U.S. was just plain terrible whichever way you look at it. Inflation is back with a vengance. This is the lull before the storm IMOP.

[hectorp] 18/10/2005 18:51

Inflation is on the rise, this is certain, and so gold shall rise. Buy gold stocks. thats not difficult.
'43% chance gold will be $570 in 2006' - NOT 470 - 570.
You have to believe in inflation, and beliefe the dollar shall fall. if not, this isnt a message for you.

[holdontight] 18/10/2005 18:49

I still think we'll retrace to 90p, then bounce. There should be major resistance between 80p and 90p.

[simon54] 18/10/2005 18:16

Gold's down, the markets are very edgy, potential buyers lack confidence, everyone hesitating to see how deep the correction in commodities will go.

[jk8] 18/10/2005 17:59

So why's the share price going down. Has somebody got wind of something?

[holdontight] 18/10/2005 00:03

Have you been smoking again Kojak?

[holdontight] 17/10/2005 17:49

good volume at end

[kojak78] 17/10/2005 09:45

I'm bearish again, here a worst case scenario:
Gold price 502 in 2006, but very tame prices in 2007 only 8% higher at 540.
Penjom 120 @240, North Lanut disappointing 40 @250, ZGC 40 @450. 200 @284.
US$32 mio net in 2007.

The optimistic case would be 120 @200 for Penjom, 60 @200 for North Lanut and 85 @290 for ZGC. And 130 @120 for Taror/Chore (copper prices are even higher now and the economics of the old Nelson pre-feasibility studies suggest prices that low). 395 @193
US$95 mio net in 2007.

The gold bug's case would be the same but factoring in new all-time highs for the price of gold at US$900 in 2007. Net earnings would equal US$200 mio.

The p/e ratios will be 6, 2 and below 1.

[budevenwiser] 17/10/2005 00:44

Brendan Ryan


Guru Martin Murenbeeld delivered his annual forecast at last month's Denver Gold Forum, adding his authoritative voice to those predicting gold will top US$500/oz in the coming year.

What sets Murenbeeld apart from most commentators is his conservative and rigorous econometric approach, and the fact that he tends to get it right. For the past two years Murenbeeld's outlook, delivered at the gold mining industry's most important international conference, has been bang-on.

For 2005 he not only got it right, he predicted the average price within $2. The modest and softly spoken Murenbeeld - who stresses he is not a "gold bug" - says: "We were darn lucky. Hopefully we will do as well for 2006."

For the year ahead Murenbeeld is forecasting a probability-weighted average of $502/oz but adds that "gold could clearly go substantially higher in the event the dollar plunges and monetary reflation comes early. We are split between a mildly bullish and a more aggressively bullish projection. Our high price scenario has been given nearly as much weight as our baseline scenario."

Murenbeeld's high price scenario allocates a 43% probability to gold averaging $565/oz in the year ahead compared with a 47% probability for $470. He tags the outlooks for the US dollar and the US economy as the key reasons.

"I am a dollar bear. The US current-account deficit by the second quarter of this year was in excess of 6% of GDP or nearly $800bn. If [the events of] 1985-1987 are a guide, then the dollar has at least another 15% -25% to fall.

"The US trade balance deficit had mushroomed to more than US$700bn by the end of July. The implication is that the dollar's exchange value is uncompetitive at its level of recent years."

Murenbeeld believes the Chinese renminbi is "grossly undervalued" and has to rise "lest protectionist forces in the US plunge the international economy into a dangerous trade war".

The recent upvaluation of the renminbi was a start but nowhere near enough. He believes the renminbi must recover much of the 34% by which it was devalued against the dollar in 1993.

Murenbeeld says that, up till now, the dollar has been supported by capital inflows from central banks - in particular in Asia. They buy dollars with their own currency to prevent the dollar from falling and their own currencies from rising. Private investors have also bought large amounts of dollars.

According to Murenbeeld: "This support for the dollar cannot continue indefinitely. Be patient. Something is going to break this and the dollar will inevitably have to decline further."

He says the crucial component of US debt is household debt, which is at record levels, as is the household debt service burden, despite low interest rates. The household savings rate is negative: he links this to soaring house prices, which are being turned by many into retirement savings vehicles.

"This is high risk in my opinion because it is dangerous in the event that house prices flatten out or decline."

His bottom-line assessment is that the debt situation is likely to result in monetary reflation, which means higher inflation, which is good for gold.

Murenbeeld stresses that consumer demand for physical gold is rising, despite the higher prices. "I am bullish on India and China. Per capita gold consumption will go up and that's what counts."

Murenbeeld also believes that Opec countries may use rising "petro dollar" income to buy more gold, which is a politically "neutral" currency.

"The last time Opec had significant surplus petro dollars, gold spiked to a record high in 1980. In 1973-1981 Opec added 270 t gold to its reserves. To bring its gold reserves up to 15%, Opec would have to buy 50m oz, costing $22,5bn. This would not be a hardship now Opec's foreign exchange reserves exceed $200bn."

Murenbeeld expects newly mined supply to fall while central bank sales - the biggest supply threat - are capped until September 2009 by the new Central Bank Agreement.

Financial mail
14 October 2005

hmm a us listing and $502 average for 2006 think we'll all be very rich if it came to pass

[holdontight] 16/10/2005 23:57

US listing would TREBLE AVM almost overnight, IMO

[budevenwiser] 16/10/2005 23:54

cheers andy

[andy] 16/10/2005 23:23

Ash,

Yes looking at AVM chart, and POG, you may well be right.


Bud,

A possible listing in the US was mentioned in discussions before the AGM, unsure as to how serious they were, maybe just a consideration.

[holdontight] 16/10/2005 20:12

Ash, would be nIce of you to let us see your analysis when finished - ta. Personally, I like AZM of those you listed, tho' PRO look to have changed direction ..... just been there before with them ! I agree with Hectorp that now may be a good entry point for SKP....SUCH A VOLATILE SECTOR....MAY JUST GO WITH FINS PHARMAS

[mr ashley james] 16/10/2005 19:23

Hector may long AZM at 98.00p, (last long 92.50p) actually studying something else at mo.

[hectorp] 16/10/2005 19:07

You think Bios will be good for coming weeks Ash. I tend to agree. I see you may go long of AZM again. its also on my very close watch list.
SKP you don't mention, and I can see why, nevertheless could be at lows here.
H.

[mr ashley james] 16/10/2005 19:03

HOT,

Yes I am also looking at Biotechs today, I guess on your monitor needs to be AZM, ASM, ACM, BIO, BBPRG, PRO for starters.

Cheers

Ash:)

[holdontight] 16/10/2005 19:01

Ash, or anyone else....any suggestions for biotechs...looking at SKP and AZM, also watching ACM....any views ?