Avocet Mining Share Discussion Threads

[holdontight] 04/1/2006 12:01

Kojak....write to them...I have

[mjcrockett] 04/1/2006 11:59

Agreed that hedging does not matter and anyway AVM have only got one quarter of one year's production hedged now.

MJ

[kojak78] 04/1/2006 11:51

The hedging doesn't matter. Others are hedged, too, Northgate for instance. I don't understand this stock. Why is this just not rising when it's so easy to make money with others? Golden Star a nice 21% rise, very predictable. I guess part of the problem is that AVM is a UK stock and UK investors seem to buy mostly cfds (=bucket shop) instead of shares.

[chipperfrd] 04/1/2006 11:46

HUI is largely unhedged - AVM is hedged.
USA/Canada are excellent markets for gold/silver stocks - LSE is not at present.
QED.

[kojak78] 04/1/2006 11:39

The HUI has made 32% now since beginning of November. AVM has made only 13% so far. Pathetic..

[saucepan] 04/1/2006 10:40

I have found the above discussion on spreadbetting very interesting and informative. I hope others have.

But back to AVM: the chart is looking good - that speaks for itself. However, I suppose we can speculate on what news might be in the pipeline and when. Latest quarter production figures have already been mentioned. But is anyone else on top of likely timings of exploration, drilling updates? Myself, I should not be surprised to see some merger/acquisitions activity at some point in the year; in fact I think this is likely.

[kickstart] 04/1/2006 09:32

Holdontight,
This particular bet was for 100 pounds per point so 10,000 shares equivalent . I always have a non guaranteed stop which in this case is 98p.My spreadbet position in AVM is much larger than this as this was my third purchase. I also own some physical shares.I have been trading AVM for some while and many times I hold for months I do not tip in and out every 5 minutes as some on here suggest spreadbetter do.
I think the most important thing is to develop a personal relationship with your contact at the spreadbetting company which I have done as I have dealt with IG index for about 5 years.I have also met some of the trading staff.

[chipperfrd] 04/1/2006 09:06

I use CFD's for day-to-day trading and to pay the bills.

In general I find that AIM stocks are best avoided because of spread and lack of liquidity. Of course there are exceptions such as GFM, OXS, etc, which have been extremely profitable.

I prefer well traded mid-cap oil companies - needless to say they have been an excellent trade during 2005.

I hold a core position in AVM but do currently have some open positions via cfd's. They are all in profit currently.

I also use IG Markets.

[pecker1] 04/1/2006 08:24

Saucepan,

good explanation - can see why it works for you. Was just expressing a personal view that margined traders seem to have a disproportionate effect on price volatility in small cap, illiquid AIM stocks that can scare off investors.Nuff said!

[saucepan] 04/1/2006 00:56

Just for information: my exposure to AVM is through holding shares and also through controlled risk spreadbets with IG index. I have been building up a spreadbet stake for a while: I opt for the far quarter (currently Sep 2006) and then rollover. I agree with earlier comments that this is an excellent way to gain margined exposure.

Although I hope it is not going to apply to my current AVM position, having controlled risk spreadbets can be a great safeguard. I wish I could have restricted some of my earlier losses on other "investments" to 20% or 30% downside. Does anyone else remember such horrors as Versailles and Just Group - to name but two!

I have found IG index superb to deal with.

[holdontight] 03/1/2006 22:04

Kick....how much per point and what is your stop loss and is it guaranteed? Your view is only HALF correct.

[kenburns] 03/1/2006 21:54

Wolstencroft.
Thanks for the info...I have a spreadbetting account with Finspreads which i recently opened, just didn't realise these firms covered AIM shares. DOH!

[kickstart] 03/1/2006 21:53

I mentioned above that I added 10,000 shares today, it was in fact a spreadbet with IG index. They Physically purchased the shares at 110p and I bought the March contract at 111.7p so they took 1.7p which is hardly a rip off if you take 5% interest borrowing the 11,000 pounds cost for about 2 1/2 months which equates to about 110 quid. They will probably make 60 quid out of it. less than most broker commission. Just get the facts straight before some of you spout rubbish. Sometimes they do mark things up when a share is moving fast but I always get them to work an order and have always found them to be fair.

[kojak78] 03/1/2006 21:24

Yamana has ca. 4 mio in reserves, 165 mio shares at $7 (all figures exclude RNC) = $300/oz, hardly a discount. Although they have very nice cash costs ;) Of course coming from copper bycredits which I don't like that much.

NPV1 would be very nice for AVM..

[wolstencroft] 03/1/2006 20:34

Yamana was always on a discount (around 1* NPV) until it bought RNC gold recently. RNC was on a massive discount, probably the cheapest gold producer around so Yamana is still probably on 1 times NPV. I think Nevsun is hard to value given the problems with its licenses; the others I dont have up to date information in my head on.

I agree though that it would be quite possible for AVM to trade around 1.50-2.00 per share and still be attractively valued; its problem is Penjom and until they can show its got 10 years reserves it will never be fully valued by the market.

[kojak78] 03/1/2006 20:24

Hmm, HUI rose 7.65% so far.. meaning gold stocks just became $221/oz production more expensive. AVM becoming $221/oz production more expensive means +25p tomorrow. AVM is undervalued ca. 70% on a production basis. Yet as long as AVM doesn't outperform the gold stocks those 70% become bigger and bigger in absolute terms. In fact, I can't imagine a scenario with AVM reaching only 2 pounds this year. With the prospect of becoming a 3.5 mio oz jorc reserves stock 18 months down the road the valuation gap at least in the $/reserve oz department should be closed. As far as I remember similar sized stocks (Yamana, Gammon Lake, Nevsun, Golden Star, Iamgold) trade at premiums to the average gold stock. If Mr. Kern's prediction of doubling gold stock prices comes true $300/oz will be the average.. Iamgold will cost $600/oz for instance. In that case I think $300/reserve oz and 550p is a very reasonable price target for AVM in early 2007.. still with a steep discount to other premium junior growth stocks!

[wolstencroft] 03/1/2006 19:55

kenburns: I used Cityindex for spreadbetting and have 30,000 AVM there with no problems; I have traded AVM a few times and they have always dealt online and always honoured their indicative prices

The main problem with spreadbetting is the spread - you have to pay the offer and when you sell get the bid. A proper broker (and sometimes even execution only brokers) will work inside the spread.With smaller stocks then know the MMs well and sometimes do wonders.

I agree though that if there a lot of T+15/20 trade out and a lot of spreadbets then the MMs might try to wlk the price. But this is all part of the game.

I am a long term investor in AVM and most of my investment is through shares; I then do short term trades with spreadbets.

[dcomd99] 03/1/2006 19:41

wyla,

"every time I buy a £1 per point stake in AVM via a spreadbet, IG or MAN are going to buy approximately 85 shares"

IG and MAN are such generous fellows, and all for your benefit! It's well known that they lose money every year! (NOT!)

Perhaps they sometimes can ofset their generosity by finding a mug to pay for it all!

[holdontight] 03/1/2006 19:21

What, another salesperson?

[wyla] 03/1/2006 19:15

kojak: I thoroughly disagree with the principles behind your advice. My stake in AVM is via spreadbets with IG and ManSpreadTrading. I really like the latter most, as they seem to give me as good a deal as I could get by buying shares, at a fraction of the cost. In a strongly trending share, as I suspect AVM will now be for some time, the multiplier given by spreadbetting will be hugely invaluable. You have to remember that every time I buy a £1 per point stake in AVM via a spreadbet, IG or MAN are going to buy approximately 85 shares to cover their risk (based on today's price). Even if they had another punter selling the same amount and were setting off my purchase against that sale, it would mean that they were not going to the market to sell 85 shares. And for the privilege of holding the above stake, all I have to have in my account is around £15 (achieved by having a relatively tight stop loss).

[holdontight] 03/1/2006 15:25

Absolutely.....plenty of value even at £2

[brad1] 03/1/2006 15:19

The best things in life are worth waiting for. This company IS delivering and with a strong gold price who knows what price it could climb to. This could be a great year with announcements awaited in anticipation and the close out of the hedge by year end. Good luck to all and a very happy new year.

[holdontight] 03/1/2006 15:19

Headed quite quickly for £2+, imho

[kojak78] 03/1/2006 15:18

Don't do that! What happens when you buy a share? You own the share.. and the price went up - a little. If you buy cfds you won't own a share. You'll have no voting right. The share price doesn't increase because of your buying.. in the end your buy will perhaps depress the price as the opposite side of the cfd deal will try to depress the real share price. Don't be greedy. I owned many mining stocks and even today I feel strong emotions for the time when I voted against the Anglogold offer for Normandy and for the Newmont offer creating the best gold miner in the world. Owning real shares and using the voting rights is a much more fullfilling experience.

Capital markets aren't for greedy speculators only looking for profit. You make a profit only when you give a service. The service of a speculator is to flatten price upswings and downswings. Buy when wheat is cheap - price rises and the farmers will grow more wheat - sell when prices are high (indicating there is too much wheat) and farmers will grow less. You'll make a profit. But buy when prices are high - you'll create even higher prices damaging the economy. poor people wiull have to pay higher prices, farmers will grow more wheat and the following price downswing will be more severe. You will be punished by the markets by making a loss. That's how capital markets work: steer the economy.