Avocet Mining Share Discussion Threads

[mieke] 31/5/2004 07:46

Continued consolidation amongst gold miners.........



AVM to be prey or to use its cash and be a predator? By next year they will be spewing off more cash than they can cope with (likely to be £6million plus this year mind), so maybe they will hit the acquisition trail, or maybe some one will do the sums and think they are a bargain.

[mieke] 31/5/2004 07:39

From the RNS on April 27th:

'Full details of each operation, including updated resources and reserves, will
be announced at the time of the Company's preliminary year end audited results
due on 21 July 2004'.

So that looks pretty much like there is no chance of hearing any resource update before 21st July, we will just have to wait. I suspect we may start to see some price action from the last week of June onwards as folk take positions (as long as POG behaves - which it looks as though it will).

[b b muppet] 30/5/2004 13:20

Jeddah Jo,

Jonathan Henry is back in on Tuesday I understand, think AVM Holders need to nag him to get a press release out advising investors of updated Resources and Reserves post latest drilling programme.

Updated numbers well overdue IMHO.

BBM

[jeddah jo] 30/5/2004 11:02

Well, since my post last week my worst fears about stability in Saudi Arabia are already coming true. The problem in Saudi is they have such a high birth rate that the native population is growing exponentially. The trouble is they only have finite revenues from oil so a lot of these youngsters are being born in to quite harsh poverty.

With little else to turn to a lot of these youths get caught up by the religious firebrands that exist everywhere in Saudi. The result, millions of disaffected youth who can only look on in envy at the fabulous wealth of a tiny portion of the population. Naturally they look for someone to blame and their main targets are the Saudi Royal Family, the Americans who are seen to prosper from cheap oil, and finally of course Israel who continue to persecute their Palestinian brethren.

Can't really see the security situation in Saudi improving anytime soon, I am just glad I am no longer there as recent events would have been terrifying. Maybe the Saudis will only find peace once not one single infidel is left on the entire Arabian peninsula.

[shirishg] 30/5/2004 03:30

Post removed by ADVFN

[b b muppet] 29/5/2004 20:22

Mieke,

So you are not even distantly related to Energyi then?(;-)0

IMHO AVM could triple from here and not be expensive on a PER/PEG/NAV basis of calculations (historic @ 65.OOp=11.02 x 2003/4 5.90p Forwards 2004/5 7.74 x 8.40p forecast).

The big issue is whether AVM beat the street on 2003/2004 EPS 5.90p forecasts.
After that I would have thought 8.40p 2004/5 was a comfortable objective.

Interesting to see what AVM do with their mountain of cash in 2004.

Glad also AVM have no interests in South Africa so no regional discount applies.

All IMHO, NAG, DYOR etc, etc

BBM

[nikkie225] 29/5/2004 18:16

Hello, my names genius john, got usefull reading for you guys!!!



WELCOME TO HARMONY
With an annualised production in excess of 4,0 million ounces of gold, Harmony is the largest gold producer in South Africa and the sixth largest in the world.

Harmony is the only South African gold mining company with its own dedicated refinery and gold fabrication plants. Harmony Pure Gold is gold of South African origin, produced and manufactured to the highest quality standards, and guaranteed by modern production and laboratory facilities.

Sourced from mines from up to 2 500 meters deep, and extracted from rock formed more than 3 billion years ago, Harmony Pure Gold is the finest gold from the African continent.


--------------------------------------------------------------------------------

NEW ON THE WEB SITE

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HARMONY AND UNIONS REACH LANDMARK AGREEMENT
Johannesburg, Friday 21 May 2004 - Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today announced that significant progress had been made in follow up negotiations with the respective unions following a discussion to restructure some of its loss-making operations. (date : 2004/05/21 - read more)



Offering Circular - ZAR1,700,000,000
4.875 per cent. Convertible Bonds due 2009 (date : 2004/05/19 - read more)

HARMONY'S BIDS FOR ABELLE NOW UNCONDITIONAL
Johannesburg, Wednesday 19 May 2004 - Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today announced that its bid for all the outstanding securities in Abelle Limited is now unconditional. (date : 2004/05/19 - read more)


HARMONY CONCLUDES AVGOLD ACQUISITION AS ALL CONDITIONS PRECEDENT ARE MET

Johannesburg, Tuesday 11 May 2004 - Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today announced that following a meeting held on 3 May 2004 during which the required majority of Avgold shareholders approved the scheme of arrangement proposed by Harmony in terms of section 311 of the Companies Act, 1973 (Act 61 of 1973), the scheme was sanctioned by the High Court of South Africa and subsequently registered by the Registrar of Companies on Tuesday 11 May 2004. (date: 2004/05/11 - read more)


SANCTIONING OF THE SCHEME OF ARRANGEMENT AND REMAINING SALIENT DATES (date: 2004/05/11 - read more)


London Global Mining Forum 2004: Presentation by Ferdi Dippenaar, Marketing Director (date: May 2004 - view presentation)

HARMONY RECEIVES AVGOLD SHAREHOLDER APPROVAL AND CLOSES OUT TARGET HEDGE BOOK
Johannesburg, Monday 3 May 2004 - Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today reported that 96% of Avgold minority shareholders voted in favour of a scheme of arrangement whereby Harmony intends acquiring 100% of Avgold's issued share capital. In addition, Harmony announced more details on the restructuring of the Target hedge book. (date: 2004/05/03 - read more)



RESULTS OF SCHEME MEETING (date: 2004/05/03 - read more)


HARMONY RESTRUCTURES ITS BOARD OF DIRECTORS
Johannesburg, Thursday 29 April 2004 - Harmony Gold Mining Company Limited (NYSE: HMY JSE: HAR) today announced the restructuring of its Board of Directors following the announcement on 7 April 2004 that the parties concerned (Harmony/ARMI/Avmin) had received approval from the Competition Tribunal to proceed with the range of indivisible transactions announced on 13 November 2003. (date: 2004/04/29 - read more)


Netcare and Harmony sign healthcare deal
Johannesburg, Wednesday, 28 April 2004 – Harmony Gold Mining Co Ltd (Harmony) and Network Healthcare Holdings (Netcare) announced today that they have jointly formed a company (referred to herein as "Health-Manco") to manage the provision of healthcare services of the Harmony Group. (date: 2004/04/29 - read more)


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RESULTS FOR THE QUARTER ENDED 31 MARCH 2004
Press Release
Free Gold
Presentation
Financials (zip) | Financials (html)
Conference Call Playback
Webcast
Bendigo Mining Quarterly Report

[mieke] 29/5/2004 17:57

As regards a forward PE, given that the new mine (if it starts on Dec 1st, which is conservative) will produce an extra 17000 oz in that time to contribute to year end March 2005, and given that it will produce at $200/oz (and POG at $375 over the period) you can add another £1m after tax to the bottem line giving a forward PER of around 8 in 2005 (thats with all other things being the same ie no improvement in production from Tajik mine etc etc)

For 2006 with a full 50000oz contribution from Malaysia you could then add a further £2m after tax, giving a full year profit of around £10m, and a PER of about 6 (with no other improvements etc etc)

So to summarise;by July 21st we will have established a historic PE of 9.4, and be on very conservative forward PEs of 8 for 2005 and 6 for 2006. In such circumstances one would hope for upward movement........

[mieke] 29/5/2004 17:17

Well I will get the first stab in for finals.
I have used the following assumptions/inputs:
POG of $402 for Oct-Mar (ie $47 higher than achieved in first half)
Production 89,753 oz
1st half eps 2.98, after tax profit of £2.5m
£;$ at 1.76 average over second half
No sale of hedged production

After tax profit of £4.01m in the second half, eps for second half 3.93

Full year eps 6.91

At current price 65p that gives historic PER of 9.4

When combined with almost inevitable upgrades in resources, news of (hopefully) increasing production and the new mine in Malaysia one would hope these will move up sharply! At 90p these would have a PER of a mere 13!

[mieke] 29/5/2004 06:22

BB - I think you misinterpreted goml's post somewhat. It reads to me that he/she is bullish gold and gold stocks but he does not place much credence in the financial/armageddon/gold last asset class left standing scenario. Neither do I for that matter - but it doesnt stop me being long AVM (at least until we see what the results bring).

By the way I am fully aware of your 'incorrigibleness' - it was not so long ago that you were loudly proclaiming that Energyi (Mike) and I were one on the same as I recall..........

[b b muppet] 28/5/2004 21:16

Mieke, I like the word Moronic, very onomatopoeic, kind of superb use of BB latitude to debate vociferously with market bulls of all kinds.

The Incorrigeable BBM

[mieke] 28/5/2004 20:55

Been out all day, but great to see lots of interesting discussion. We could do without terms like 'moronic' being bandied about though........

[b b muppet] 28/5/2004 15:26

Budenveiser,

Did you read her first piece?

On 31 May 1781, Gold price soared to $19,390 an ounce



CONCLUSION

Here are the main points:

1. Hyperinflation is imminent.

2. Past analyses indicate the following will happen:

Gold will soar.
U.S. dollars will collapse.
Interest rates will climb sharply.

3. The reference point for the hyperinflation is the 3rd quarter of 2004. By planetary correlations, the most bullish phase has been located. It is from end December 2004 through early August 2005. However, Gold will rise significantly before this period.

4. Gold price will greatly surpass the high reached in year 1980.

5. It is advisable to invest in Silver also because Silver rises more rapidly than Gold.

6. Hyperinflationary forces will disintegrate by the end of August 2005.

Good luck!

Y. T. Wong
Contact
Hong Kong, 1 January 2004

[pecker1] 28/5/2004 14:52

budevenwiser,

Not saying Wong is wrong, but not sure why Germany suffered hperinflation from the planetary moves in 1920's and not France or UK as well?

But his historical parallels and thinking on the mechanics of hyperinflation is well worth a read. And given the capacity constraints and long lead times to opening new mines, Wong could well be right about commodity inflation really shooting up in 2005!

[b b muppet] 28/5/2004 14:33

Budenveiser,

This said it all for me, The Missisippi Scheme, how history repeats itself now look at the USA 1907 to 1913 and the creation of The Federal Reserve:-

"For some reason the author never mentioned John Law and the Mississippi Bubble. Law was the son of a Scottish goldsmith/money lender, and when France was suffering from a severe shortage of Gold in the early 1700s, he convinced the Regent that "My secret is to make gold out of paper." In 1716 Law established a private bank which issued bank notes, and which eventually underwrote the entire French national debt, backing it with shares of the Mississippi Company. This company supposedly had the rights to the vast hoards of Silver and Gold (along with other riches) in The Louisiana Territory. The French money supply soared, inflation was rampant and on February 27, 1720 the government essentially outlawed private ownership of Gold. On November 27, 1720 Law's bank shut its doors for the last time, as the entire paper money scheme had by then totally unraveled."

[b b muppet] 28/5/2004 14:26

64 Bit,

It is a no brainer, Biswell is the 90's child cheap oil, rising TMT shares, heaven on earth, presumably why he got totally lost in the New Millenium.

Now back on Planet Earth with Oil prices approaching 300% of the last Century Indexed long term average of around US$15 BBL, Commodity prices across the board correcting a twenty to twenty one year bear market, when all he has seen is three year bounces up in the cycle down.

All Biswell's adult life he has known weak commodities, strong Dollar, he is like a fish out of water,a product of the Technology Age, unlikely to survive for five minutes in this alien world of fast increasing inflation, interest rates, commodity prices, collapsing Dollar, collapsing highly geared US Equities.

Now what happens after a Bull market of 68 years 1932 to 2000?

In 1970 South African Gold Production hit 1,000 metric tonnes or roughly 79% of global production the Gold Price was US$35 controlled by The Bretton Woods Agreement, in 2003 expected South African production was 375.80 metric tonnes declining 4.90% from 2002, the rate of decline increasing from the roughly 4% annual decline since 1970.

So we can realistically expect SA Production to drop to 353.63 metric tonnes in 2004, another 22.17 metric tonnes for the world to find.

Trouble is that although mine supply has grown from roughly 1267 mt pa to 2,600 mt pa ie more than doubled, demand has gone to 3,600 mt pa, the differential of mine production supply and global demand exceeds 1,000 metric tonnes pa already.

It took mankind somewhere of the order of 200,000 years to mine the first 600,000,000 troy ounces or 18,662.10 metric tonnes extracted pre 1840.

In the next 162 years mankind mined another roughly 117,337.90 metric tonnes.

The trouble is there is not alot left and man needs at least 3,600 metric tonnes per annum and growing as population increases by at least 1.8775% pa or say at least 67.59 metric tonnes pa, even if there is NOT a run on buying gold as people hedge their bets on paper currencies, in addition to demand fostered by roughly 80% the Jewellry Trade.

Then after years of Communism and a ban on Capitalist views, ancient Gold ownership by the Chinese, the lid is taken off and 1 in 5 people on the planet can buy, and increasing can afford to buy Gold, 1,300,000,000 new Gold punters!

Hmm, big problems for the Biswells and other Neanderthals of the TMT Age!

All IMHO, NAG, DYOR etc, etc

BBM

[budevenwiser] 28/5/2004 14:07

bbm you might like this article regarding gold cycles and lunar cycles or anyone else if you have'nt read it already , you dont have to believe it or you may think its all mumbo jumbo but its still a cracking read

[64bit] 28/5/2004 13:43

hey' bbm, easy tiger, we need these people remember... ;))
i actually quite like our mate mr.biswell, i recognise him from the late 90s' :)

[b b muppet] 28/5/2004 13:29

Goml,

Don't get upset, I meant no harm, indeed quite the opposite, it is only a BB however when I hear people deluding themselves about "The New Paradigm", that things that are born don't die I really do worry people are not seeing the roadtrain heading their way.

There is no reason to buy gold or oil or any commodity as an investor or speculator if you are a Dollar, US Equities, Bonds or other paper instruments bull.

The Bottom Line is that markets are controlled by supply and demand economics, if you want prices to go up you restrict supply, if you want prices to go down you increase supply.

The constant from 1900 to 2000 is that human population has grown rapidly by roughly 650% in 100 years from 1 billion to 6.50 billion and this population has as a result a parabolic increased demand for natural resources of every kind.

Now how do you explain restricting the supply of oil by going to War in Iraq, and keeping the tap on the printing presses on full blast in relation to US Dollars?

Please do not delude yourself that this in any way predicates a soft economic landing, that bubbles don't burst, or that gold with a limited supply of just 136,000 metric tonnes on the planet will not go up as a direct result.

I remember screaming on the iii BB in 2000 about TMT shares that they were all going to crash, no one listened to me then either.

All I am trying to say is that in effect the USA is just a far larger version of Marconi with a turnover of US$10 trillion but with gearing to match at in excess of US$6.80 trillion to US$7.80 trillion.

4th July 1776 to when noting 4th July 2009 would mark 233 years?

All IMHO, NAG, DYOR etc, etc

BBM

[richgit] 28/5/2004 13:03

Is Biswell choking on his Martini Sundowners..................


NEW YORK -- Victor Sperandeo is one of the world's most successful traders, making money in years gone by for the likes of George Soros and Lee Cooperman. Now he plans to make a good deal more money for himself and his clients playing gold.

Addressing the Spring meeting of the Council for Monetary Research and Education, Sperandeo, currently president of Alpha Financial Technologies, forecast gold and other commodities going much higher as tremendous inflation pressures build in the United States.

Sperandeo noted that April was one of the most unusual months on record with every security losing value apart from the dollar and Treasury Bills. He says the market was head-faked by Federal Reserve Chairman, Alan Greenspan, talking about a bias toward higher interest rates. "The markets discounted that. . . but it's meaningless because interest rates are the price of credit not money. . . The Fed is jawboning the market, not restricting credit."

Sperandeo's point is that the market's assumption of restrictive monetary policy is wrong unless and until credit is cut off. Without that, consumers generally bear higher prices rather than stop spending altogether. He believes the Fed is creating a "purposeful inflation" because that is the only way to resolve several economic and social conundrums. Until the Fed stops pumping up the money supply (+14% last quarter) the threatened rate increases are camouflage.

"The Federal Reserve's purpose is to facilitate government spending. . . by surreptitious and deceitful means," Sperandeo said.

Just as America inflated away reckless spending in the 1960s and 1970s, so it can be expected to do the same again to address looming problems. Job growth is essential, social security and medicare are essentially insolvent, and war always causes the money printing presses to roll faster.

Sperandeo has put himself on the opposite side of the inflation trade, saying: "we will start to see accelerating inflation that makes the 1970s seem easy. . . the only way out of this in the short-run is to print money."

He advises bond holders to switch into T-Bills with the interest rate cycle bottoming out, and is betting on gold as a long range money maker.

"Gold is about to explode because of inflation," he says, cynically noting that BOLI/COLI (bank owned / company owned life insurance) has eligibility requirements that only bonds, gold and silver can satisfy. "Bankers of the world understand the system."

Sperandeo warns those obsessed with a declining dollar that the currency may not fall as much as they expect because other countries will inflate their units in sympathy.

Gold bulls might be surprised that Sperandeo sees little risk in derivatives, which he employs.

[64bit] 28/5/2004 12:50

that article certainly seemed to provoke a few comments... although probably coz' it took up so much space. the url was posted above, but i guess bbm decided to post it to encourage a bit of readership....
...i think i understand why he did that, there is too much short term provarication and not enough long term thought going on here sometimes...

anyway, as we try to guess what will or will not transpire for gold, let us first think about what the p/e of avm is likely to be following the results.
and then let us consider whether we think oil will touch $30 again, and then let us wonder if the pog/$ correlation will soon break...

i expect avm p/e will be 8 or 9.
oil futures indicate no return to $30 any time soon.
major insider buys immediately before the closed period.
avm price clearly supported at 62p, small sales hoovered up at these levels.
most asset inflation is driven by inventory/supply.. not growth.
pog/$ correlation will begin to break as we move closer to the US election.

what more could we possibly want as we sit and wait on the contrarian sideline.?