Avocet Mining Share Discussion Threads

[biswell] 23/5/2005 09:32

See Bud I speak the truth...they were still saying 2005 in 2003

B

[biswell] 23/5/2005 09:31

Date : September 2, 2002



Avocet Mining's Target Of 300,000 Ounces Of Attributable Gold By 2005 Now Looks Achievable.


When Avocet started talking a few months ago about a production target of 300,000 ounces of gold a year by 2005 the words 'pie' and sky' came to mind, but not any longer. At that time its gold mine at Penjom in Malaysia had produced 107,340 ounces in the year to end March 2002 and it had just acquired an 80 per cent interest in a 460 sq mile exploration property in Indonesia from Newmont. Since then, however, things have moved on apace and Avocet, which looked dead in the water until it took the bold decision to move its listing from the main board to AIM, could be a stock to watch.

The full listing inhibited its ability to do deals and the tungsten business, which now only consists of the Beralt mine in Portugal, could barely wash its face after the price fell back in the second half of last year. Now it has made a significant acquisition and there are signs that it may be on the verge of finally getting rid of the tungsten business so that it can concentrate on gold. In his Chairman's statement in the annual report Nigel Mc Nair Scott said, "the past year's performance of the tungsten market was a final disappointment and, as we recently announced, the company has decided to write down its remaining tungsten assets and focus on building a gold business." If that is not a polite way of saying goodbye, what is? Maybe the Portuguese government will step in to safeguard jobs in which case, many UK investors, after its treatment of Murchison United, will have ambivalent views on the future price of tungsten.

Back to gold. Avocet is acquiring the gold interests of the Canadian company Nelson Resources in Tajikstan. These consist of a 44 per cent stake in the Zeravshan Gold Company which has exploration properties covering around 3,000 sq kms in the north of the country where past Soviet exploration has identified over 8 million ounces of gold in a number of deposits including the Jilau deposit where ZGC operates an open pit gold mine. This mine has been run by Nelson since 1996 and last year it produced 80,000 ounces of gold at a cash operating costs of US$218/oz. Production is expected to continue at this sort of level from an underground operation currently being developed and from two open pit operations on recently discovered deposits nearby.

Together with ore stockpiles scheduled for processing, these operations have a measured and indicated resource base containing a relatively modest 521,000 ounces of gold, but the 8 million ounces identified by the Russians should not be overlooked. They did a lot of drilling in the area and their estimates are usually very accurate when checked to western standards as Celtic Resources will confirm at its Nezhdaninskoye mine in the Yakutia region of Russia. This means that Avocet should be getting a fair bang for its buck, and its buck consists of 14 million shares in Avocet which makes Nelson a 17.6 per cent shareholder. In addition Avocet is going to pay cash equivalent to 44 per cent of ZGC's working capital which is expected to amount to something under £2 million.

The interesting things is that though Avocet is purchasing a 44 per cent interest in ZGC it gets operating and management control over the company and a 90 per cent economic interest in ZGC's cash flows.. Its co-shareholders are the Takikstan government (51 per cent ) and the IFC (5 per cent) and it is going to try and buy out the latter. The net result is that Avocet's gold production should rise to 175,000 ounces without taking into account Indonesia. Here it is moving ahead fast with a pre-feasibility study on one of the two identified deposits at North Lanut. It is an oxide resource which should be susceptible to simple heap leach recovery and Avocet is very encouraged by progress to date. So much so that it envisages production by the end of next year at a rate of 60,000 to 75,000 ounces. And there is more to this one as well as Avocet has taken on Newmont's exploration manager for SE Asia who should be able to bring other projects to the party.

Looking ahead, Avocet could be achieving 230,000 ounces of attributable gold production by the end of next year which brings the 300,000 target well in sight. Another project would do it and now that it has enlarged its bailiwick to the whole of Asia and is strengthening its exploration as well as its mining and mineral processing teams, this should be possible. What it has to do also is drive down costs at Penjom and Zeravshan. Good gold mines have to be profitable at US$250/oz gold and talk of advanced stripping and hedging programmes merely fudges the issue. Shareholders have had a long wait while tungsten has eroded the company's value. Now light dawns and a dividend should soon be on the agenda.

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NB Avocet is the only mining stock held by Minews. It dates back to a deal well before Avocet listed in London and before Minesite had been invented.

[budevenwiser] 23/5/2005 08:20

now what would you do if you wanted another 26% of zeravshan invest 10million whilst discussions are ongoing or let it run down
now they have what they wanted they are going to turn zeravshan into virtually a new mine
now i'll let you in on a little secret , costs at zeravshan will be much higher than 439 now if you had any idea you would have known that just by reading the interims

[corrientes] 23/5/2005 08:15

Gold price ? Even US ppt won't allow China and India to buy their gold on the cheap. Gold would not have held up so well based on the last few months of dollar movement.

[biswell] 23/5/2005 08:08

GOLD

Next big support test level.....$414.50

B

[biswell] 23/5/2005 08:07

It is my opinion that costs in Tajikistan will stay higher than expected, thus making the claimed 300,000 figure in effect a bigger loss maker even it was ever attained.

Which it won't be I think.

FWIW I also think...security and 'protection' money for continued operations in Tajikstan will rise..not fall

B

[biswell] 23/5/2005 08:03

Did you spot that important word......PRIMARILY in the Para below ?

In other words the costs are for other things as well.....what are they ?

Security ? Pay Off's to goverment officials ? What are they...the company should say.


' The increased unit cost and decrease in production at ZGC were PRIMARILY on account of increased waste stripping needed for the reopening of the Jilau Main open pitand a large proportion of production coming from low grade stockpiles.'

[biswell] 23/5/2005 08:00

Re my comment earlier about AVM's increased production costs....I have edited out the following remark to prove my claim is factual...from it you can see costs at Tajikistan have gone up by over $ 119 to $439 per oz.

In other words they are losing money digging it out the ground to sell it.



RNS Number:9659LAvocet Mining PLC06 May 2005 AVOCET MINING PLC


Production from JV Zeravshan LLC (ZGC) in Tajikistan for the fourth quarter was 9,827 ounces (Q4 2004: 15,028 ounces), bringing total production for the financial year to 44,241 ounces (2004: 55,771 ounces). Total cash costs at ZGC are estimated to be US$439/oz for the financial year (2004: US$320/oz). The increased unit cost and decrease in production at ZGC were primarily on accountof increased waste stripping needed for the reopening of the Jilau Main open pitand a large proportion of production coming from low grade stockpiles.

[biswell] 23/5/2005 07:51

Is that the best you can do Bud ?

Gold to test $400 very soon now....then £375.....then $350

B

[budevenwiser] 23/5/2005 07:36

saddo
been up all night on your lonesome again
still think biswell is ashley james he likes to stop up all night aswell

[biswell] 23/5/2005 05:06

You guys do take on board what I have said about AVM gold production falling by 7,000 oz's don't you ?

I hope this makes my previous posts a few months ago....which seem to have dissappeared , re the 300,000 production by 2006...which used to be 2005. Now it looks a pipe dream.

Now way will AVM get production up by circa 120,000 oz's within a year and a bit. At some point....and I would suggest soon, the board will have to make a revised production figure....say 250,000 oz tops with a strong tail wind and no more problems like they have been having which have sent the recovery costs sky rocketing to levels where AVM is losing money hand over fist.

When they do make this announcement....and I think they will, and the drop in production is a fact not fiction, then the share price will take a big hit.


The board were simply timing their announcement so that they hope a higher POG will take the steam out of it. A good idea I agree....but unfortunately for them and many more the resurgent $ V a EURO in trouble and thought to be 30% overvalued against the dollar, has caught them with their pants down.

My opinions .....DYOR.....

B

[biswell] 23/5/2005 04:54

Of course I will corrientes....and cos you ain't a bad bloke can you remember a Hybrid H...but don't let on cos I won't like it.

But why 12 months....let us make it more interesting and say 3 months

AVM to hit 60p.......how does that suit you ?

B

[corrientes] 22/5/2005 19:45

At the AGM, a couple of years ago, I heard Mr Catchpole talking to a representative from the major shareholder, and they agreed that sods law would come into play with tungsten ie they'd probably sell at the bottom, but it wasn't key to the game plan. As far as Taj is concerned, has B ever been there ? I've been in that area, admittedly quite a while ago. The similarities between those countries are as close as those between France, Germany and UK (lol). In view of our Dear Leader's profound knowledge about all things, would he like to give us his forecast of the AVM share price over the next twelve months ?

[biswell] 22/5/2005 04:53

Bis says: FinancialRuin got it right for the most part....exept from the last para about selling off it's Tungsten pile which would have seen a X 5 INCREASE over the last year.....a bit like seeing gold going to $2,000 / oz

Think what AVM's share price would have been if the Tungsten had been kept and not given away

FinancialRuin - 23 Apr'02 - 14:45 - 3 of 19


energyi,

Some interesting information about Tungsten.

I'm sure that, as an investment, Tungsten will again have its day.

Over the last decade demand for Tungsten has exceeded production by an average of 25%, however this demand has been met by the release of Tungsten from Russian and Chinese stockpiles. It is generally believed that these stockpiles have been virtually depleted and, when they really are depleted, the price of Tungsten could explode.

The following link gives historic Tungsten prices.



Maybe a bottom in Tungsten prices has now been reached. However, I still think that Avocet should sell off its Tungsten operations because the rationale for investing in Tungsten is entirely different from the rationale for investing in gold. Investors should be able to decide for themselves the mix of commodities in their portfolios

[biswell] 22/5/2005 04:48

Mr DoobyDave is leading some up paths in garden settings methinks

DoobyDave - 4 Sep'04 - 23:28 - 5051 of 5067


Looking harder at the thread header has made me realise just how out of date the information is. In fact, it's almost Biswellian disinformation now

[biswell] 22/5/2005 04:36

Re the 300,000 oz production figure which others have been crowing about.

When I said this had been put back a year....I was called a liar

Please note

LAST YEARS PRODUCTION FELL BY 7,000 oz

When do you think the current 300,000 oz production date will be put back again ?

What will be the effect on the share price of the birdy when it is ?

B

[beckaroo] 21/5/2005 12:04

The mine was also unaffected by past disputes, such as the five year civil war in the 90s.

(FROM april 2003)

TWST: Currently, what do you see as potential risks with where you are mining in Asia?

Mr. Catchpole: Well I think there's a perception of certain areas out there as being quite high risk from a political perspective, Indonesia being one case in point. We have people who are very experienced in working in that country, and I think what a lot of people don't realize is that there are areas in Indonesia that are a good deal less of a political risk than others -- North Sulawesi is a case in point. So you really have to pick your territory in that part of the world, and, just as importantly, gain a relationship with the local authorities. So I don't view the specific area of Indonesia where we're at as being high risk. Politically and economically Malaysia is a mature country and very easy to operate in as far as infrastructure and educated work force goes. It is not much different from many Western countries, in fact. Tajikistan is an unusual situation. It's the poorest of the central Asian republics, but probably the easiest to work in from a political risk perspective, particularly for us because the acquisition we made up there involves a company that has been there since the early 1990's. It has really been the country's only relatively successful foreign investor and therefore has a good relationship with the local government. Geographically, the area of Tajikistan we're in is quite isolated from many of the more troublesome regions -- Afghanistan and some of the neighboring countries. In fact the mine was developed during a local civil war which never adversely affected it.

[dixi] 21/5/2005 11:23

Tajikistan Not Likely to Experience Popular Revolt

(Washington, DC -- May 6, 2005) Despite a worsening political situation and a poor economy, a popular uprising similar to those that have recently occurred in Ukraine, Georgia and Kyrgyzstan is unlikely in Tajikistan, according to RFE/RL Tajik Service Director Massoumeh Torfeh. Torfeh told a recent RFE/RL audience that, in contrast to the political events in these post-Soviet countries, change in Tajikistan is more likely to occur along "a slow road to democracy."

[shirishg] 21/5/2005 08:42

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