Avocet Mining Share Discussion Threads

[bookbroker] 18/4/2013 08:41

Unfortunately this co. has the most appalling record of inept management, wherever they seem to mine for ore they encounter the most unforseen problems on a persistent basis, coupled with the fact they have continued to use hedging strategies that for a small co. of this size is just totally ridiculous, they are not protecting their interests simply but increasing the risks ten fold by not being large enough to absorb shocks in the ebb and flow of ore quality, costs of production and the fluctuating metal price. the whole thing is basically a shambles, and previous management are principally to blame alongside their advisors.

[cascudi] 17/4/2013 19:27

at least this company should not be at the level of its net current asset per share: 30p (£)

[cascudi] 17/4/2013 19:14

table did not came up good
1996:
min avm sp:135p
min gold p:222£

2000:
min avm sp:12p
min gold p:186£

2012:
min avm sp:236p
min gold p:1026£

2013:
min avm sp:15
min gol p:1051£

[cascudi] 17/4/2013 19:09

I am not an expert but looking AVM share price and gold price along various few years (table below), It seems to me that today AVM share price is showing an over reaction of fear about gold price



1996 2000 2012 2013
AVM share price min (£/100) 135 12 236 15
gold price min (£) 222 186 1026 1051

[hairballradical] 17/4/2013 14:17

cl2201,

thanks for considered response. Better grade material certainly a positive and the fact that such a large proportion has minimal p-r is also a positive. As is the share price at these levels, at least the link back to the gold price has been re-established which, as you project, may have a more positive impact on the way back up.

HBR

[cl2201] 17/4/2013 12:24

HBR - I certainly wouldn't want to persuade you to jump back in here as this is definitely one of those times where you need to have a strong conviction about what you're buying and where you see it heading. I, personally, am confident about the future of AVM but then that is my own opinion based on my research of the company and my thoughts about the direction of gold.

You have clearly done your research so I'm sure you have made up your mind either way.

In terms of this being a longer-term play...I would say yes it should be but I also expect consolidation in the mining sector so it could well be that AVM would be taken out before reaching 1+ pound a share.

As for your question; do you mean Q1 or the last as in Q4?

I assume you mean Q1 in which case I would say that costs are likely to be maintained at the $1250 level, however, what I am optimistic about is the fact that from May the company will be running higher grade material (3-4g) which should bring costs down again.

[hairballradical] 17/4/2013 10:55

cl2201,

I am tempted to get back into gold but have been burned by these from £2.30 days. What keeps me out (of these specifically) is the fact that they can't even produce the stuff at less than the hedge and that will be around 25% of output.

The other side of it is that it probably is a longer term play but we're talking 3 years before the hedge is offset. Will the price hold up for that long? Would be interested in your view on their ability to reduce costs to below the $1245 per ounce for last quarter? Consultant fees down for sure but can they reduce costs with preg-robbing issue / diesel solution?

HBR

[cl2201] 16/4/2013 02:39

Technofiend - I'm not sure how you arrive at the possible conclusion that AVM's inability to buy back the hedge cheaper means they suffer worse than other gold miners from a drop in GP?

The price of the hedge is really neither here nor there when it comes to a significant drop in the GP. It exists and is slowly being paid back. They still have to supply gold to Macquarie at a price of around $940 whether the GP is $1200 or $1700.

The issue for AVM is the operating costs which are rising this year and next but will start to fall the year after by a significant margin.

It depends on where the GP drops to and how long it stays down. If it is a sustained low, then I would imagine management will possibly slow down works on Tri-k to conserve cash and weather the storm.

My personal opinion is that the GP will be a bit erratic in the short term whilst positions are settled but will become a safe-haven again for funds etc when the proverbial really hits the fan in equity markets.

As for AVM, I continue to add as I am looking beyond the current blinkered view for gold and instead look at the future where I see the GP back to $1600+.

[technofiend] 15/4/2013 19:05

I take it that because of the hedge reconstruction the falling gold price no longer means AVM can buy back their hedge cheaper?

So a falling gold price is even worse for AVM than other gold miners?

[cl2201] 15/4/2013 14:27

Hairballradical - Cheers. I intend to keep adding. As for whether I'm right or wrong, well only time will tell on that front.

[hairballradical] 15/4/2013 12:19

cl2201, very brave and good luck. The point with regard to AVM is that there comes a point where it's better to stop producing altogether than to produce at a loss. This comes significantly sooner for AVM than for most other companies.

[cl2201] 15/4/2013 10:28

Hairballradical - Your statement is valid, however, it depends on whether you are of the opinion that the gold price will continue to drop or whether you see it as a short term move. I personally think the drop will be short-lived thus am happy to add more.

[hairballradical] 15/4/2013 10:19

The problem that AVM have over and above the other mines is the high cost of recovery of the product and the low hedge price. This is a double whammy and as the gold price falls towards $1200 this means that the mines are producing nothing but hedge gold and loss-making gold.

[cl2201] 15/4/2013 10:17

A lot of fear.....I personally see this as an opportunity to top up whilst seemingly everyone else is bailing out. The talk of gold going lower may well be the case given the lemming coefficient, but it won't stay down for long; the appetite for gold in the east is growing whilst production is slowing.

[giant steps] 15/4/2013 08:37

Plenty of the bigger goldies taking a hit today


Examples
POG down c14% at 159p, MML down c12% at 233p, HGM down c9% at 79p

[a.fewbob] 15/4/2013 07:50

Lol, AVM can never do anything right!

[giant steps] 15/4/2013 07:49

Reminder from 25th March 2013




Reminder : Gold falls from end of march above $1600+ to $1454,
unlucky timing to restructure ?

[ninja 19] 03/4/2013 09:15

Unfortunately

My target is 1.36p

[jacobs322] 31/3/2013 21:15

those interested might want to take a look at Spread Betting eMagazine April edition which is now online – the issue is a Gold Mining Supplement Special.

[noirua] 27/3/2013 22:39

News Item : Eric Sprott's silver lining to banking crises

[smig4] 27/3/2013 17:09

Credit Suisse also increased holding to over 7%

[zico01] 27/3/2013 15:23

UBS investment bank increased to just over 12%

[cl2201] 27/3/2013 07:07

Everyone and everything by the looks of it.

[drewz] 27/3/2013 02:28

Who's your vendetta against this time, buywell?