Avocet Mining Share Discussion Threads

[ukgeorge] 19/7/2012 10:12

i see it as an easy escape for him, after pockerting a couple million quid. But I should think that he was pushed.

Just hope the new guy delivers. A back to basics approach, just get Inata running smoothly and trim down on unneeded expenditure.

[polaris] 19/7/2012 10:08

Chip,

Development expenses in what way? You mean drilling and exploration expenses or wider than that, so covering the Inata expansion work?

I have to say that things are very unclear for me right now wrt AVM and its short term prospects. In order to conserve cash i expect that a lot of the development work will be scaled back and the Inata expansion delayed. I hope AVM do not make a foray into the debt market right now to keep things on time as it would be a costly mistake, IMO, and put the company at risk. I would write off the development of Koulekoun for the foreseeable future and even go as far as saying that it will be sold off so someone else can develop it - a blow to the longterm strategy of becoming a mid-tier miner. I am waiting for the Q2 update and the statement about how they see the rest of the year. Q3 will be pivotal as i will be using that as the base case for extimating the next 6 Qs for the cashflow and what i think they will be able to fund in terms of resource development and expansion.


BR resigning this morning puts the AVM ship in complete disarray as it now has no leader. I feel it will be a 'batten down the hatches' situation for the rest of the year. The dividend will now go as the new CEO can clear the board and look to rebuild trust in the market. FTSE250 inclusion will be lost and the shareholder base will change once again. AVM need to make sure that they out in place the mechanism to come out of this situation and forget the share price It is all about costs for the next few Qs.

regards,

Paul

edit
i reserve judgement on the COO becoming the CEO as he has only just started in the COO job and does not yet know the company. BR had a good first 12-18 months and then blew it big-style. DC needs to get this right and that means a lot of pressure.

[buywell2] 19/7/2012 09:24

The average salary for CEO's of FTSE 100 listed companies is £840k or US $1.26m

Two BOD members of AVM which is now capitalised BELOW the FTSE 250 and will soon be in the FTSE 350

Earn WELL in excess of this by circa 40%

Why ?

They have and are running Avocet into the ground





I wonder what the next guy gets paid ?


19 July 2012
Avocet Mining Change in Directorate
Avocet Mining PLC ("Avocet" or the "Company") announces that the Company received and accepted the resignation of Brett Richards, Chief Executive Officer on 18 July 2012. Brett will stand down as Chief Executive Officer and as a director of the Company with immediate effect.
David Cather, who joined the Company as Chief Operating Officer in May 2012, has been appointed Chief Executive Officer and it is the intention of the Board to appoint David as an Executive Director at its next meeting.
David is an experienced mining engineer with over 30 years of experience in building and developing mines, most recently in his role as the Chief Operating Officer of European Goldfields.
His career has included senior roles at Anglo American where he was Technical Director for its Industrial Minerals Division, Redland Aggregates Ltd. (now Lafarge SA) and De Beers. David also spent five years consulting on a variety of early stage projects principally for gold, copper and base metal projects in the DRC, Sierra Leone, Nicaragua, Philippines and Columbia.
He is a graduate from the Royal School of Mines, Imperial College London with a first class degree in mining engineering, and has gained extensive senior level project development experience and operations management in both open pit and underground operations.
Avocet remains committed to the development of its Inata Gold Mine in Burkina Faso and to maximising value from its gold projects in Guinea. To this end the Board considers that David's experience will be invaluable in realising the considerable potential of the Inata mine and the surrounding Belahouro area. Overall these management changes will enable Avocet to further its objective of becoming a leading West African gold mining and exploration company.
Russell Edey, Avocet's Chairman, commented:
"Over the last two years Brett has played a central role in transforming Avocet from a South East Asian mining company to an established West African gold mining and exploration company. The Board would like to thank him for these contributions and wish him every success going forward. As the Company enters its next phase of development, ensuring operational success at Inata will be critical to underpinning Avocet's continued growth. David's strong operational focus will lead the experienced on-site management team to ensure delivery on this growth strategy."


PS

I hear there are some management jobs going at G4S

[johnrxx99] 19/7/2012 08:16

Best news in ages although they still have to rebuild credibility.

[giant steps] 19/7/2012 07:51

Brett Richards departs, although don't understand why the
Chairman Russell Edey thanks him for the current situation.





RNS 19th July 2012 - CEO resigns

[2magpies] 18/7/2012 20:19

Is that a chart for G4S??

What's the gold price got to do with G4S?

[chipperfrd] 18/7/2012 14:43

Paul,

Do you have a view with regards to ongoing development expenses, on a quarterly basis?

I am in broad agreement with you on OPCF, I am factoring-in EXPEX, Loan repayments, 4th mining fleet over 2013/14, D&A, G&A, sustaining CAPEX and a reduced dividend of c. $2.5m/qtr. But I don't have a clear view on expected inward development costs going forward - can you help?

Cheers. All the best.
Chip

ps. I should add that I am aware of the $120-150m for Inata expansion and the $250m for Koulekoun (although one assumes there are likely to be delays). It is the current Inata ongoing development spend that I am trying to size.

[buywell2] 18/7/2012 13:42

Does not bode well for holders

Chatwise 50p beckons on further GOLD weakness to circa $1460

[2magpies] 17/7/2012 19:24

Yes, but what's Mali got to do with G4S??

[buywell2] 17/7/2012 15:12

Here is the Inata mine



Click on the link below to see where the refugee camp is .... referred to in the above post



Trouble is on the way


All the AVM BOD have stated is

'Political turbulence in Mali continues in advance of the elections that are intended to be held in May 2012. In Burkina Faso, which neighbours Mali to the south-east, there has been an influx of refugees from Mali, with an estimated 5,000 refugees having settled in organized refugee camps at Djibo, some 70 kilometres from the Inata Gold Mine. Avocet's management has and continues toprovide humanitarian aid for these refugees. To date, the unrest in Mali has had no impact on operations at the Inata Gold Mine.'

Djibo is a different place

[2magpies] 17/7/2012 08:37

So, no AU at G4S then!

LOL!

Like for like comparison eh!

[buywell2] 17/7/2012 08:33

Production of AU by Avocet is falling

Now debatable if ANY profit will be announced in the interims

The CEO and BOD have dropped a MAJOR clanger in the way they have handled the trasition from Indonesia to West Africa

$1 BILLION LAWSUIT still OUTSTANDING as a result

BUT

They are getting paid MEGABUCKS

[2magpies] 17/7/2012 07:29

Hmm.

How many oz of AU does G4S produce??

[buywell2] 16/7/2012 18:09

The CEO of G4S gets an annual salary of around $1.29m

That's LESS than the CEO and another BOD member get for putting AVM where it now sits




In fact the BOD of AVM get paid MORE than the entire BOD of G4S a company of £3.93 BILLION Mkt Cap ( AVM Mkt Cap =£139 Million )

or put another way

2 members of AVM get paid more than the WHOLE BOD of G4S a company that has a Mkt Cap circa 30 TIMES that of Avocet PLUS

AVM has 1,213 employess V G4S with 657,000 employees



600 times as many staff




The CEO of G4S is likely to go

[ukgeorge] 16/7/2012 10:46

the slow climb back to a fair valutaion.

[ninja 19] 13/7/2012 17:25

Thanks Polaris, I could not explain like you did

[lej2] 13/7/2012 16:08

What I am trying to say, perhaps clumsily, is that the total cash costs remain virtually the same whether we produce 135,000 ounces or 160,000 ounces. The cash costs also remain the same whether we sell at $1,600 per ounce or $1,200 per ounce.

We have seen the massive fall in share price with the drop in production by 15%. As far as I can see, if the pog had dropped by 20% the effect would have been the same (allowing for the fact that approximately 25% of production is sold at a fixed price) in that total revenues would have fallen by 15% with costs remaining constant.

Are we crippled if production remains at 135,000 ounces per annum? Probably yes. So would we be crippled if pog dropped to $1,200 per ounce? Probably yes.

The double whammy doesn't bear thinking about. I am not saying that this is likely, but our CEO is implying that it wouldn't be a crisis. Or am I missing something?

[polaris] 13/7/2012 15:39

Surely you mean that fixed unit costs remain the same when the pog falls but fixed unit costs rise when there is a production fall, as the total costs remain fixed? Therefore, a fall in production can be much more damaging than a fall in the pog.

33-34k of current annual production is hedged at $950. That also has much more of an impact when the production falls as it becomes a double whammy. %age in hedge rises and the production cost per oz rises and so the hedge becomes doubly damaging in reducing cashflow!

regards,

Paul

[lej2] 13/7/2012 13:22

Fixed costs remain the same when gold price falls. What is the difference?

[ninja 19] 13/7/2012 12:15

LEJ2


Fixed costs remains the same, even they decreased production

[lej2] 13/7/2012 11:06

Can someone explain to me why a 20% drop in gold price is less damaging than a 15% drop in production. Approximately 25% of production is hedged so 20% fall in spot is equivalent to a 15% fall in average selling price. Or am I missing something?

[taffer87] 12/7/2012 22:20

"We're going to be cash flow positive as long as gold holds up at fifteen to sixteen hundred dollars," Richards said. This isn't great to read... albeit the quote after that tries to repair the damage somewhat.

"Would we be crippled if gold price drops to twelve or thirteen hundred dollars? Not at all," Richards said.