Avocet Mining Share Discussion Threads

[kojak78] 08/2/2006 10:30

Saucepan,

I guess you did the right thing for you. Sometimes it's better to trade not for money but for the soul, sometimes we just have to protect ourselves mentally. Money is not everything in live, it is just a tool.

Once again I'd like to recommend Jeff Kern's SKI System, he gave very good signals in 2005. Unfortunately you have to subscribe now in order to read his stuff. However, SKI indices can be obtained at sharelynx (

The black dots are userx prices (prices are available from quote.yahoo.com). The green line is the 35-39 index, once price levels reach that index the bottom could be in.

from
"Prices WILL eventually go down to touch/hit/break the 35-39 index OR will even generate a 35-39 index "sell" signal (an even more powerful bottom than a hit/touch/break of the 35-39 index; note that such 35-39 "sell" signals mark lows during great bull markets and the pure mechanical system simply remains long anyway from 8/9/05 at 8.07, essentially ignoring the 35-39 index signals). Our question is "When will prices decline to the 35-39 index back prices?" "

[saucepan] 08/2/2006 09:29

I am out for now, having been long in various amounts since 2003 - I simply wanted to protect profits. I'll be back soon - hopefully to catch the next breakout or if there is a good consolidation opportunity.

I realise I am in danger of missing good news - there is certainly plenty of potential in the pipeline.

Good luck to everyone who sits tight. Normally, I myself would in patches of weakness like this, but did not feel comfortable enough this time, with substantial gains to protect.

[corrientes] 08/2/2006 07:17

You're losing it. Have no fear.

[kojak78] 08/2/2006 06:45

What price today, 128p? 7% drop..

[kojak78] 07/2/2006 20:46

Don't hope for too much, AVM will do the usual thing:
HUI drops 5%, AVM nothing.
HUI drops 5% again, AVM up 1%.
HUI drops 10%, huh? godl stock crash?, AVM nothing
HUI turn, up 5%, AVM drops 20%.

[goml] 07/2/2006 19:37

HOT,
Agree, although i suspect gold will be voraciously bought below $500 now so it won't stay in the 480-90 zone very long. Hopefully long enough for me to fill up my e-gold account again though!

[holdontight] 07/2/2006 19:25

The drop in gold is not bad.....it needed to pull back for a while......I expect it to fall all the way to $480/$490 and then hopefully stablaise a few months. What will be interesting is AVM's reaction! My guess is either no fall at all or a small pull back to the late 120's. Anything below that and I am gonna have to sell other stocks to fund more AVM

[references] 07/2/2006 13:31

Agreed. I don't want POG shares, unless of course the premium were high and then I'd get out. Longer term the truth should come through. A bidding war would be fun though.

[kojak78] 07/2/2006 12:21

BTW, *of course* AVM's production is worth more per oz than Peter Hambro's! I'm not even discussing AVM's higher production profile. Whoever buys Peter Hambro at these levels must be crazy. I am certain any takeover attempt would be blocked by management+elliot+artemis+major shareholders, all those parties control above 60% of outstanding shares so a hostile takeover is very difficult.

[kojak78] 07/2/2006 12:17

Celtic Resources had a market cap of $400 mio at a time, now they are back to 178 mio (assuming 51 mio shares outstanding/fully diluted).

They can increase production to max. 170,000 oz until 2009. AVM will have solved the problems at Jilau until then and Taror/Chore will be running then, too. That means AVM's comparable production is 120+60+85+130, with minority interests 120+48+162=330 at the same cash costs. So Celtics share price of 450p translates into 404p for AVM and 200p into 180p.

I would never invest into companies with Russian mines (BGO etc.), way too uncertain. I'm glad Avocet has mines in Tajikistan and not any other FSU country.

Yes, it was so predictable. People paid 5x the money for a way riskier company and now look at the results.

[references] 07/2/2006 09:38

With the mkt cap of Peter Hambro standing at £1bn based on current production the same as AVM and aspirations to produce 1 million ounces by 2009, why don't POG take the easy route by buying AVM in a share only deal?

250,000 ounces of production is a mere snip priced at just £148 million in a paper deal, surely?! Anyone got Peter's phone number?! An easy finders fee.

[kojak78] 07/2/2006 07:34

Comparing the situation today to the lows in Feb./March 2005 Avocet stands now 30% higher in US$ adjusted terms and the XAU ca. 75%. Considering AVM was way undervalued back then it should have risen something like 150%, not 30%. Current price levels are totally inadequate for me and I guess with more and more investors learnings about AVM's low valuation, low cash costs (at least compared to the intermediate producers like Golden Star), rich reserve and resource base I guess we won't have to wait for too long for way higher prices..

[pomp circumstance] 06/2/2006 19:41

Gold Bugs Eye $600, $850 and Far Beyond

By Nick Godt
Markets Reporter
2/6/2006 1:52 PM EST
Click here for more stories by Nick Godt


Nervous jitters about Iran's nuclear ambitions haven't only inflated crude oil prices. Gold, often seen as a safe haven in times of uncertainty, reached 25-year highs last week and remained on the upswing Monday.

In recent action, gold for April delivery was gaining $2 to $573.80 per ounce.


Among metal-mining stock indices, the Amex Gold Bugs Index was recently up 2.34%, led by big gains in AngloGold (AU:NYSE ADR - commentary - research - Cramer's Take), Harmony Gold (HMY:NYSE ADR - commentary - research - Cramer's Take) and Gold Fields (GFI:NYSE ADR - commentary - research - Cramer's Take).

The CBOE Gold Index was up 2% and the Philadelphia Gold and Silver Index was up 2.3%.

Barrick Gold (ABX:NYSE - commentary - research - Cramer's Take) was up 1.7% after saying it would raise its stake in Placer Dome (PDG:NYSE - commentary - research - Cramer's Take) to 94%. Barrick offered to acquire Placer Dome in November 2005.

Broad indices, meanwhile, were mixed as oil prices rose and investors fret that the Federal Reserve may have to lift interest rates for longer than expected. The Dow Jones Industrial Average was recently up 1.76 point, or 0.02%, at 10,795. The S&P 500 index was up 0.07% at 1264 while the Nasdaq Composite was down 0.18% at 2258.

Gold Shines
Just like crude (which was recently gaining 38 cents to $65.75 per barrel) gold's latest surge came after Iran said over the weekend it would resume uranium enrichment activities even as its case is being referred to the United Nations Security Council.

But unlike crude, gold isn't likely to pull back if those tensions ease. "Gold is in a bull market," says Brien Lundin, gold analyst at Jefferson Financial, and editor of Gold Newsletter. "That means it responds positively to bullish news as investors are looking for excuses to buy."

For proof, there's no need to look further than the breakdown of a once-traditional inversion relationship between gold, which is priced in dollars, and the U.S. currency. A rising dollar used to depress gold prices, as it took less dollars to buy the same amount of gold. But, as it did all of last year, gold's latest push has occurred even as the dollar has been strengthening.


But as investors are looking for excuses to buy, a drop in the dollar might well give another leg up for gold. Should tensions with Iran ease, the greenback could get hit ahead of Friday's readings on the U.S. budget and trade deficits.

Still, after easily passing through the psychologically key $500 level in November and recovering from a mid-December slump, gold has been on a seemingly unstoppable upward trend. Most analysts currently view it as overbought. A correction, several say, should be expected soon.


This, however, is what gives Bernie Schaeffer, head of Schaeffer's Investment Research, confidence that gold still has room to run.

"This overwhelming sense of skepticism, this all-out assumption that the end of this rally is near, is exactly why the metal and its relevant stock indices still have upside potential, at least for the short term," Schaeffer wrote in a research note.

Schaeffer's contrarian investment strategy proposes that the investing masses may be right while a trend is unfolding, but they are likely wrong about when the trend begins and when it ends. "In this situation, I think the gold skeptics are calling an end to the trend a bit too early," Schaeffer says.

At the other extreme, James Turk, founder of GoldMoney.com, believes that gold might test $850 per ounce before the end of March. At a recent meeting in TheStreet.com's office, Turk said that after passing the key $500 level, gold has attracted investors who were previously under- or un-invested in the metal.

In addition, Middle Eastern investors tend to rush into gold when they are flush with cash, as they are currently, while the tensions with Iran, the ongoing war in Iraq and the recent victory of Hamas, are all fueling the short-term trend.

Several analysts, including Lundin and Peter Grandich, editor of The Grandich Letter, believe that gold will likely try to test the $600 before an expected correction occurs.

"I think [gold] is obviously overbought, and I do expect a correction at some point," Lundin says. "But one thing about gold is that it has repeatedly made prognosticators look foolish."

In the short term, Lundin says that large short positions -- or bets that the price of gold would fall -- have been punished since the start of the year, which should guarantee further upside for the price of bullion. As gold prices refuse to drop significantly, the owners of those positions (most likely hedge funds) are increasingly forced to buy gold to cover their bets, creating a self-reinforcing mechanism called a "short squeeze."


But before or shortly after $600 is reached, the "smart money" may start anticipating a seasonal pullback in gold prices, which typically occurs between March and May, Lundin says.

That's all in the short term, of course. Lundin's conservative estimate for this year is that the $650 will easily be reached. But he doesn't bar the idea that speculative fever may push it to test its historic highs around $850, which were last touched in January 1980. Adjusted for inflation, this would equate to more than $2,000 in current dollar terms.

"Should the nominal high of $850 be touched, then the next target would be $2,200," Lundin says.

That's also the call of French bank Credit Agricole Cheuvreux, which sees the possibility of a spike to $2,000, without providing a time frame, because of an upcoming short-squeeze.

In making the call, Cheuvreux analyst Paul Mylchreest revisits a conspiracy theory -- favored by hardcore gold bugs -- that central banks have roughly 10,000-15,000 tons of gold less than their officially reported reserves of 31,000 tons. Much of that disappeared gold was loaned secretly over the years to bring down the price of gold in times of crises, Mylchreest says. The banks' counterparties meanwhile have to replace the gold they had borrowed and this is causing a giant short-squeeze, the theory goes.

Whether the theory is true or not, the $2,000-per-ounce call brings to mind Goldman Sachs' famous call that crude oil might experience a "super-spike" that would take it to $100 per barrel. It wasn't long after the call before crude oil prices experienced a correction.

[saucepan] 06/2/2006 10:01

Looking interesting all of a sudden. Has anyone sussed out the significance of Friday's large trade?

[tom4mac] 05/2/2006 17:56

Saucepan

Good post

This is the best gold stock to hold.

[saucepan] 05/2/2006 17:11

I thought it would not do any harm to remind ourselves of news that might be in prospect – sooner or later.

All of the following extracts are taken from November 2005 interims:

* Testwork on the Taror and Chore underground mining projects, with a combined reserve base of three million ounces, based on prior feasibility studies, has commenced at two independent laboratories. Amongst various options, the Company is exploring the Geobiotics treatment process which utilises an inexpensive bacterial heap leach process for pre-treating refractory ores. A pilot plant for testing this process is under construction at Jilau.

* The Group budgeted just under US$5 million for exploration this financial year and to the end of September 2005 we had spent US$2.3 million. This included over 30,000 metres of drilling at existing operations and at two new prospects.

* . . . in Malaysia, we continue to undertake metallurgical testwork on the Buffalo Reef prospect, near Penjom. Given our significant presence in Malaysia, where we produce over 85% of the country's gold, WE ARE CONFIDENT OF NEW OPPORTUNITIES WHICH WE ARE CURRENTLY PURSUING.

* We have commenced an exploration programme at Saursai in the
same geologic environment as Jilau.

* We have also lodged an application with the Tajikistan government for the commencement of exploration work at Chore where, aside from a million ounce pre-feasibility estimate by previous western owners; there is a 5.3 million ounce gold resource identified by the Russians and Tajiks based largely on underground development. Receipt of a licence has been slowed by bureaucracy, but we remain confident we will receive this so that exploration work can commence in the spring.

* We are confident that the Bakan district will exceed our initial target of a 500,000 ounce resource and we have initiated a second phase drilling campaign to further evaluate these resources in order to bring them to a pre-feasibility development status in 2006.

* Our exploration portfolio has grown rapidly. With recent results at Bakan and Pusian in Indonesia, and further surface work at a number of other projects, we have a diversified pipeline of projects to bring into future production.

* Meanwhile, A NUMBER OF EXCELLENT ACQUISITION OPPORTUNITIES HAVE BEEN BROUGHT TO OUR ATTENTION as a result of our reputation as a company that delivers on our promises for both our shareholders and industry partners.

[zaky] 03/2/2006 14:57

waaaaaaaaaaa..............

[kojak78] 03/2/2006 13:46

Hm, 1.5 mio shares broker to broker..

[kojak78] 03/2/2006 08:31

BTW, $448 gold price received meanes $494 for the second half (first half 402 as far as I remember). 24000 are at 300 (hedge deliveries), so 86000 left at $548, seams even a little too high for the second half spot gold price.

When AVM announces full year earnings once again the stock will dive..

[kojak78] 03/2/2006 08:27

Production - 215,000oz (P=118, NL=56, Z=41)
Cash Costs - $281 (P=240, NL=200, Z=510), Energy costs have increased
Ave Gold Price - $448 (incl. Hedge 48,000*$300)
Gross Profit - $35.8m
Other Costs - $14m (Depr'n=$6m, Explo=$5m, Admin=$3)
PBT - $21.8
Tax - $7.6 (I used 35% due to local tax Malaysia)
Earnings - $14.2
Earnings - £8.6
EPS - 8.1
P/E (@138p/share) - 17.0

broadly in line with my assumptions, but who cares? That are old figures. The rolling p/e at current gold prices, current cash costs, current production and without hedging that will end in July is ca. 8 to 9.
Which gold miner has even a p/e of 17? 50-80 are common figures.
What is the average p/e for the market? 20 or more realistic 30 without fake earnings. What p/e has Desert Sun? Yamana?

Maybe the problem with AVM is that some guys try to value it like an ordinary stocks and not like a gold miner.

The most important things are still the dividend and Taror/Chore feasibility that will put an end to AVMs perceived reserve problem.

[beckaroo] 02/2/2006 23:51

What do people think about them being implicated in helping the Government of Congo put down an uprising and massacre some villagers last year? Think I'll stay out of them, not the most ethical investment in the world today..



People seem to be pushing for more answers. See news reports January 31st..

[gerry2] 02/2/2006 23:21

Is There a call for Anvils ?

[mikkydhu] 02/2/2006 23:17

Also listed in Canada, where the share price appears to be ten times as high as in Australia. Something here I don't understand. Trying to get at the market cap. Ashley, can you explain, please?