Avocet Mining Share Discussion Threads

[powerbooks] 26/9/2005 08:46

Gold Chart. Gold began the week with a solid follow-through to the breakout move of the previous week, zooming higher in a Hurricane Rita-assisted thrust which peaked Thursday intra-day at $475.50.

What a magnificent, but steep rise the metal has enjoyed since Hurricane Katrina slammed into the Gulf Coast (8/30) and gold bounced neatly off its 200-day moving average at $431.65. The market is perhaps a little overheated on Hurricane Rita news and significantly overbought. By Friday, reported fund liquidations and profit taking ahead of the weekend clipped the top off to close at $463.10.

The last two times gold reached overbought on the daily chart, a standard bull market correction ensued. However, (and this week's major caveat), neither of those two times followed a dual breakout. While the odds favor a further correction short-term, corrections after breakouts often find support at or near the breakpoint ($456).

Unless spot gold can move below the previous turning high of $449.50, the chart will remain decidedly bullish, just coming off being overbought. It is not unusual for a breakout to soon test the break point from above, which if held, can mean a renewed thrust to an even higher high.

[jk8] 24/9/2005 17:37

Is anybody going to the AGM this Tuesday?

If so, can you report back please.

Thanks

[powerbooks] 21/9/2005 20:35

http://www.fatprophets.co.uk/content.aspx?page=Greyhound%2c+Fat+101

21 Sept 2005

Avocet Mining (AVM) recently delivered another record result. Gross profits increased for the fourth consecutive year, to US$18.6 million. Underpinning the results were solid production at the Penjom mine, a robust gold price and the start of operations at North Lanut in Indonesia. With the miner also actively reducing the hedge book we believe that the outlook for further earnings growth is excellent.

With the mines at Penjom and ZGC now performing solidly, production will be boosted by the North Lanut deposit which should deliver more than 50,000 ounces this year. Elsewhere in Indonesia, Avocet will earn a 51 percent interest in the Idenburg Contract of Work after spending US$2.5 million on development and exploration. Thus far the miner has invested US$900,000 at Idenburg which has the potential to contain a multi-million ounce, high grade reserve.

Avocet's hedge programme had only 66,000 ounces of gold outstanding at the end of June. The company will deliver a further 36,000 ounces into this position over the next nine months. We believe this will provide support to earnings next year as AVM gains more leverage to the rising price of gold. This week gold hit a seventeen year high and we continue to believe that the precious metal is in the early stages of a long-term bull market.

We believe Avocet's rising production profile and reserve base will underpin earnings growth in the years to come. In addition, a robust balance sheet, and healthy cash generation will ensure that AVM has the financial strength to support an active exploration programme and capital spending initiatives

[mr ashley james] 21/9/2005 19:38

Kojak,

Yes I agree bluntly with miners and developers you have an asset, with explorers you just have dreams and residue cash, no other real asset in most cases.

I no longer touch MINEX Stocks because of this really.

Cheers

Ash:)

[yam114] 21/9/2005 09:44

I hold to many AVM and OXS to buy any more but would like to add to my gold holdings.
Anyone holding G340?

[wolstencroft] 21/9/2005 09:20

... and the other 10% only survive through share placements

[kojak78] 21/9/2005 09:13

I invest in producing miners only because it's not the reward that's important but the risk/reward ratio. Most explorers are just too expensive.

Of course there are some good ones, too. Those ones that can finance their mines with ongoing cash flow or by bank credit.

In the end investing into producers is a numbers game while investing into explorers means you have to evaluate management capabilities, further exploration potential and feasibility of the projects.

Look at the numbers. 90% of all explorers fail..

[kickstart] 21/9/2005 09:08

Looks like we are about to bust through the 100p mark today. Already over 100,000 shares traded -largest volume I have seen by this time of the day for ages.

[mr ashley james] 20/9/2005 19:34

Kojak,

Do you only invest in producing miners or also in development assets, ie measured and indicated resources at pre Feasibility and Bankable Feasibility Stage?

Cheers

Ash:)

[kojak78] 20/9/2005 19:25

Nope, that something's wrong with that figure.

They have 220 to 240000 oz in production now, US$10/oz is at least 1.5 mio after tax.

With Taror/Chore and Jilau full scale production AVm would have 395000 oz in production meaning at least 2.5 mio bottom line.

I guess 500k is based on Penjom production alone and calculated in UK pounds..

[tobie_1] 20/9/2005 18:50

i remember reading AVM increase approx. 500k bottom line per $10 increase to gold. this was when gold was ave. 410. coupled with improved production costs this is wonderful.

[kickstart] 20/9/2005 15:41

At last, moving up again.Must be a large trade in the background.

[kojak78] 20/9/2005 11:31

To keep things in perspective: Avocet costs ca. US$180 mio for ca. 300,000 oz production. Ranger Minerals with 300,000 oz production (Damang mine, now Gold Fields) sold for less than US$20 mio. And that stupid management sold the mine to GFI.

[kojak78] 20/9/2005 11:28

@wolstencroft

I never touched a dot.com stock. Traded gold stocks only. The stock I was talking about is Vista Gold. I bought them at 10 cent before the reverse split, they made 300% in two days (of course I sold them). The good old times. Eldorado Gold, Miramar, Ranger Minerals, Ashanti, Normandy. I had a lot of good deals in the years before 2002.

I have to admit that I made much higher gains when the gold market wasn't in its bull move. Strange. Perhaps it's because it is very hard to find value in the markets today.

[budevenwiser] 20/9/2005 11:13

regarding the latest rise for avm
a blind man on a galloping horse could have forcast the latest rise as i did on the night of the 14th just by looking at the chart
regarding what happens next short term i think depends on greenspam later today and if he raises rates
if he does gold should have a nice rapid correction and maybe also the dow so we could get a small correction down to about 87 88 just above the neckline breakout and where the 200 dma is
if we dont get a rise in rates it could be a green light for gold and gold stocks
for me two big plus points were we flew thru the 200 dma at about 86 and the longterm down trend at about 88
short term regarding the indicators avm is a little overbought so a little correction wont do it any harm
a thing i have noticed regarding avm when it breaks out to new highs on the new leg up is they stay overbought on the longterm indicators
all past corrections have corrected themseelves in the shape of a parabolic bowl so even if we go down from here i think at least a pound give or take a couple of days beginning october
measure down from top to bottom of bowl = 30p gives us a minimum shortterm of 130
all shortterm and longterm moving averages are now tightly packed the 20 50 100 200 and 455 are all within 6p of each other ,usually when the averages end up packed together like this it precedes a sharp move one way or the other and i'm thinking an up move especially with news of drilling at idenberg due around beginning october
i have already sold my trading shares and will buy back before then
just my take on the chart and nothing to do with the fundimentals you all know how bullish i am on them
good luck

[wolstencroft] 20/9/2005 09:15

kojak: "Having owned shares that quadrupled in two single days I know what I'm talking about."

You sound like and old dot.com trader. Don;t think many of them knew what they were talking about.

However, agree that AVM is undervalued, I reckon somewhere £1.50-£1.75 is more reasonable and that'swhere I'll start selling.

[kojak78] 20/9/2005 08:46

AVM still underperforming since November and since March.

As AVM is the best gold stock the overperformance from November to March was justified. Since then the XAU climbed 30% and AVM should double that percentage as it has done in the past. That leaves us with 155p we need to take first profits. If the XAU goes to 200 in the next 12 to 18 months we need to reach 300p as a first selling point. Below that I'm not selling one single share, buy low sell high..

Having owned shares that quadrupled in two single days I know what I'm talking about.

[kickstart] 19/9/2005 18:37

Lets hope the grades are the catalyst for the big move.

[mr ashley james] 19/9/2005 17:09

Thanks Budenveiser.

[budevenwiser] 19/9/2005 17:05

j henry told me they were going to jakarta to announce them in early october , so i'm expecting bumper grades
last time i spoke they had results from 5 of 10 holes drilled and were going to jakarta on the strengh of those 5 but should have all 10 results by then

[corrientes] 19/9/2005 16:49

yikyak - would love to believe you, but that story's been doing the rounds for a couple of years now. As far as AIM manipulation is concerned, totally agree with you - a den of thieves out there.

[wolstencroft] 19/9/2005 16:44

avm is my biggest gold holding and I am prepared to wait. Dont see why anyone other that short term traders would be selling AVM today though (overvalued majors perhaps are worth some profit taking)

[yikyak] 19/9/2005 16:33

Simple really imho, the big money want's us little investors out of the stock. Once every weak holder has been flushed it will probably end up one of the best performers, although I appreciate that's hard to believe at present.

London's AIM has a growing reputation for being pretty corrupt which is why I do so little on it these days, although I do make an exception with a few that scream undervalued.

Avocet is an obvious buy but with low volume it's an easy target. Only with volume will this situation change.

[corrientes] 19/9/2005 16:13

Don't understand this. What is the one thing that seems to be a big no-no with this one ?