Avocet Mining Share Discussion Threads

[bestbuddy] 06/4/2006 12:56

As i said, looks like it picked the wrong day for a retrace. I think it will be hard for the price to fall against such a strong rise in gold. I think current price is as good as we are going to get. In fact almost a gift considering the 200p level was broken yesterday so forcefully.

[trader horne] 06/4/2006 12:47

apologies Wobble, topping is tough when the price rise is almost vertical with no sign of a pullback - well allright, a few p today ...

[muzzy123] 06/4/2006 12:18

also other mining groups are going down because of a recent strong run...

[muzzy123] 06/4/2006 12:17

this share is currently overbought...it will retrace and move bak up...

RSI = oversold severely.

[hectorp] 06/4/2006 12:12

well done holders!
been trading and lurking.
- more to go IMO after any profit-taking
H.

[holdontightuk] 06/4/2006 12:12

If gold breaks 600p today, I will be bankrupt!

[bestbuddy] 06/4/2006 12:01

With gold making new highs, i think AVM chose the wrong day to fall. Cant see it finishing below 200p if gold breaks 600p today. Would have liked a nice drop to buy more but may have to make do with current level.

[yikyak] 06/4/2006 11:32

Just as a point of interest I quite often use this site for further confirmation of entry levels although it obviously has difficulty in predicting individual stock manipulation. I only use it for entry levels as once in I tend to stay in for a good few years.

[wobblechops] 06/4/2006 11:05

Trader, I did'nt miss the boat as you say, I made good profit from AVM, I'm just looking for a sensiable entry point this time round.

[kojak78] 06/4/2006 11:04

I will look into it..

Take a look at DEZ and their 20% correction. Perhaps I'll have to sell Minefinders and put the money into AVM if we go back to 160 or something. I'm the worst market timer and so I have to rely on fundamentals alone.

AVM has 1.8 mio ozs reserves or let's say 1.95 with the latest additions (yes, only 1.2 mio of that is jorc standard). Let's say .55 Penjom, .4 North Lanut and 1 mio Jilau. Bakan looks like it will have .5 mio ozs, Taror+Chore have 2 mio (feasibility needed). So we have .55 + .9*80% + 3*75% = 3.52
At 194p and 110 mio shares fd that translates into just $107/oz. For all of you considering Taror and Chore not as "real" reserves: I think it is more likely that AVM will bring them into jorc standard reserves category than MFN to bring Dolores into production in 2007.. If you want to compare with the likes of MFN you have to include Taror/Chore reserves! If one compares with ultra-conservative companies like Newmont, then I'd exclude Taror/Chore.

BTW, my recent studies with options theory applied to gold stocks suggests one oz of reserves with AVM production figures is worth $350 now.

[yikyak] 06/4/2006 10:27

Today's action just adds fuel to my theory below, I guess institutional money really wants to flush the retail investor out, nasty little inconvenient parasites that we are!

30 Mar'06 - 22:05 - 2302 of 2363 edit

Holdon, I agree and perhaps even higher. The reason I say that is because I have felt for a long time that certain entities whilst going long North American pm stocks they on the flip side been short UK pm stocks. Remember the days where the HUI was raging away and the likes of Avocet did absolutely nothing or even dropped regardless of sterling gold movements. Today was an exception which makes me believe it possible for the likes of Avocet to rise by a very unexpected amount in a single trading session, if, and that's a big 'if' they have decided to allow it to run or feel they should reverse short/go long. If this was the case then we could see a single session rise of, for example, 30% just like the good old days when we were around the 25p mark. This is obviously complete speculation on my behalf but Avocet stockholders have been treated in such a Pavlovian manner it might come as a bit of a shock as over the last year or two we have been happy with an odd couple of percent rise when cash gold has just gone up another US$20, we have grown use to it, ring ring, woof woof. As a bit of further evidence my UK stocks far out performed my North American, I can't remember that EVER happening before!

Should be interesting to see how the ASX performs overnight.


Kojak, seeing you are into North Americans take a look at NGG.V and the recent deal from FR.V, me think you like!

[holdontightuk] 06/4/2006 10:15

What I dont understand is why the sell off today, the first day of the new TY....often happens though??

[kojak78] 06/4/2006 09:39

I hope AVM will be down today as a down day is bitter needed. We could get a correction that could take us much lower but I guess not below 160 or so. With gold at these levels I think the HUI is due to make a new high for the year, why shouldn't it? This will ensure that AVM isn't going too low. Some stocks like Minefinders are even oversold, once financing is through they should do very well. Silver is goingto break 12 (but is looking like it should correct, too).

Would, could ,should, the fact is AVM traded at 97p when the XAU was at 87 and that was with better GBP/US$ exchange rate. So we have only outperformed by a very moderate margin. Considering that we argued about AVM being 2.5 to 3 times as much worth against other gold stocks back then and considering the recent developments at Jilau, Hatu and Bakan I think AVM is now even more undervalued against the average gold stock than in the past. AVM price in GBP = DEZ price in US$..

We will get a bumpy ride and I'm mentally prepared for some losses but I won't sell now. Every other investment idea from 2005 (Agnico, Desert Sun, Yamana, Gammon Lake) just went higher and higher.

[kickstart] 06/4/2006 08:58

I think it will. It has been nrewing up to make this run for a few days.

[goml] 06/4/2006 07:59

Looks like gold may test 600 today!

[jeddah jo] 06/4/2006 06:10

Just to remind everyone, that selling your shares immediately after your unloved and disregarded gem has been re-rated is possibly one of the worst or at least not so good things you can do. The recent price action indicates that people are desperate to clamber on board because they know over the next 12-24 months this share is much more likely to go to 400p then back down to say 100p.

The risk reward after such a swift rise believe it or not, favours the buyer at this time and NOT the seller. Therefore in all probability your best course of action remains, to tuck the shares away, sleep peacefully and contentedly at night with a big grin, and come back and look in another 12 months.

Plus, for all us die hards who bought in at the 20-30p range (or lower), relax, the market says the share is now worth 200p and that will not be changed lightly, each 2% movement from now on is effectively a 15-20% move on your initial investment. I think I said a few years ago, I look forward to the time when 50% moves up on buy price are regular occurences.

JJ

[holdontightuk] 05/4/2006 22:41

K.....is it still trash at $600 pog? I think not.....extraction costs of ca $275/oz, with maybe 300k oz/year production on hoped for 2 mill oz reserves/resource. It is clearly not without risk, but if they deliver on the above......whoooooossshhh! We will know within 12 months, possibly 6 months. I hold all of 7k's worth now, but intend to add whilst sub 100p, all being well.

Back to AVM.....fair value imo is ca £3.5 / share, with gold trading around current levels. This is based on produccion and exploration potential alone.

[kojak78] 05/4/2006 22:32

Meekatharra is trash, I owned some St. Barbara stock years ago. Just look at Croesus and see what happens if amateurs, trash assets and hedging come together. If Mercator has the right management and if they can get around the usual hedging commitments then they'll have a real chance. I'll take a look at them. Trash at the right price is a great investment!

[holdontightuk] 05/4/2006 21:27

I realise some of you dont like me (or anyone else) posting on other opp's, but here's another good article on MCR....


From www.proactiveinvestors.com.....(very good site, imo, and worth registering (and it's free!)....

MERCATOR GOLD PLC


Mercator Gold plc: Could be a mid tier gold player by this time next year
By the proactive team.

Vital statistics Epic: MCR
Shares Issued: 39.12 million
Share Price: 65.5p
Market Cap: £25.62 million
1 Year Range: 115-50p
Sector: Precious Metals
News: Latest
Website:
Other Articles:




Considering their are more than 50 gold explorer and producers listed on the London Stock Exchange and Alternative Investment Markets alone, it should come as no big suprise to investors that with-in this group there are a diverse range of plays on the metal.

Mercator Gold has the unfortunate luck of being a gold play on Australia - unfortunate because Australian companies that have attempted to list in London as a primary listing have often found it hard going in the after market. Australian companies often, somewhat undeservidely, are treated with a great deal of scepticisim because they have floated Australia assets on the LSE instead of the Australian Stock Exchange (ASX) which has a good history of developing mining juniors into mid-teir producers.

Why the scepticism? Well ask any Australian company this question and they will tell you that the city is of the believe that Aussie companies that float in London only do so because they can't raise the money in Australia. If they can't raise the money in Australia then something must be wrong with the assets. Of course this is a very generalised critcism to lay on any company seeking a listing in London from Australia, and their is no real foundation for this, but none the less it is a fact that the Aussie's can find it pretty hard going in London.





The problem is usually compounded by a management team that are mostly based in Australia or wherever their assets are, and as a result don't have much of a presence in London to keep the markets updated to make sure the market doesn't lose track.

However, Mercator aren't at the mining stage just yet, and at present are concentrating on the mine economics whilst making sure they have the right people in place to make the plan happen. Mercator are all to aware that a project of this type requires experienced management. As a result when the company was first formed, is was created around people with a history of taking mining explorers and turning them into mid-tier producers. Mercator are also keen advocates of using the latest modern technology to help identify targets that may have been overlooked by previous operators; and as such are the only company with a 3-D version of the Spadis data analysis program, which is specifically designed to analyse historic drill data in a mathmatical model to identify new high priority drill targets.

Mercator's immediate goals for 2006 include commisioning the plant, which is envisaged to take from June to the end of this year to complete. The company has three drill rigs on site and intends to have a two pronged approach:

1) Shallow depth, tight spaced drilling to move more of the gold reserves into the mineable reserve category so there are at least 4 years of mineable gold identified.
2) Drill targets identified by Spardis to increase the reserves

By doing so, Mercator hope to be able to build up a good short term mineable reserve whilst at the same time continue to expand the size of the known ore bodies. It is certainly possible that Mercator could increase production from 150,000 ounces per annum to as much as 300,000 ounces per annum if enough reserves can be identified. Mercator futhermore still have to carry out additional metallurgical testing and they have to decide how the mine plan will develop going forward as the current ore bodies contain a mix of soft and hard rock at varying grades which must all be extracted to get to the overal head grade in the region of 2+ grams a tonne.

Not an easy task, but Mercator are confident they are up to the task and can implement the mine plan successfully.


The company is unusual in that they already have a mill and sufficient cash in the bank to start production. Unlinke most mining companies, which require bank finance to build a mine, Mercator has the luxury of having no debt moving into production. The mine will operate 24/7 at full production, and cash costs are hoped to be around USD $275 an ounce. To put this in perspective, once in production Mercator would move way up the ladder of producers firmly into the mid-teir range with comparisons to companies like Avocet Mining or Celtic Minerals being likely.

Mercator is a tightly held stock with approx. 92% of the issued capital held by 26 shareholders. The company would like to see more liquidity in the stock, but is aware this will be difficult whilst it is so tightly held. I certainly got the impression that a small dilution may be considered to help liquidity and give the company a little extra cash in the bank for other tasks they would like to carry out at Meekatharra.

On a final note, as I mentioned earlier, London is always sceptical of Austrialian projects listed on the LSE. We had to put the question to MCR, and this was the response we got.

" When we originally bought into the Meekatharra gold field, we knew it was damaged goods. St. Barbara Mines had done very little on their land and were in jeopardy of losing some of the titles if they didn't start putting money in the ground. We took a minority position in an exploration play in a gold field. It was a bit of a hard ask for the ASX, so we pitched it to London as it was very different from anything on AIM as a leveraged position on a gold field. The "big picture" was more attractive to the AIM market than the ASX."

With three drill rigs on site, observers can expect plenty of news flow over the next 6 months, and going forward Mercator has the potential to put a lot of city sceptics to silence if they move this project into production in 2007. Long term, assuming a continued buoyant gold price, Mercator could besitting on a major gold field with large enough reserves to spark even the interest of a major.

[holdontightuk] 05/4/2006 20:09

£5 was this year !!

Sentiment has changed towards this stock - the fundamentals remain as before. Hoever we now have the chance to become fairly valued rather than undervalued.

[bionicdog] 05/4/2006 19:04

£10 a share it is then. Blimey it was only talked up to £5 this morning , that's good going :o)

[holdontightuk] 05/4/2006 18:49

Is this still a good investment?

Depends on :
- where you see price of gold heading to
- where you see AVM prpduction heading to
- where you see AVM's reserves and resource heading to

I personally think possible that (in order)
- $1000 / oz within 2 years
- 300k oz's / year, within 2 years
- 10 years worth, or 3 mill ozs

On this basis, AVM will have a mkt cap of ca £1 billion within 2 years

[wyla] 05/4/2006 17:29

kojak: although 8 days rise on the trot is not often exceeded, did you watch sportingbet last year? I am only speaking from memory, but I seem to remember it went for about 6 weeks with one day of no movement, and perhaps one tiny down day. All the rest were blue.

[trader horne] 05/4/2006 17:25

Wobble, jump in now??? You missed the boat in 2004 and 2005.

[wobblechops] 05/4/2006 16:11

yeah agreed