New Thread as requested by Wirral Owl.

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Ash

..Questor share tip: Avocet beats guidance

By Garry White | Telegraph – Fri, Jan 27, 2012 07:16 GMT

When it comes to production guidance, the best thing mining companies can do is under-promise and over-deliver. This is what Avocet Mining (Xetra: 900745 - news) has done.

Avocet Mining 226p +14¼ Questor says BUY

The gold mining company, which owns 90pc of the Inata gold mine in Burkina Faso, issued a production update on the final quarter of last year that smashed expectations. Avocet produced 46,102 ounces of gold in the three months ending December 39pc more than the previous quarter. Guidance was for 40,000 ounces.

This brought total production for the year to 166,744 ounces, compared with guidance of 160,000 to 165,000 ounces. For 2012, the guidance is a conservative 160,000 ounces.

The company has had a busy couple of years selling off its South East Asian gold mines for £200m to focus on West Africa. As well as Inata, the group has a pipeline of exploration projects in Burkina Faso, Guinea and Mali.

Avocet is ramping up Inata production and this is going to consume most of the cash that it throws off over the next couple of years. However, gold prices are likely to stay at elevated levels for some time.

Indeed, the prospect of more quantitative easing in the US, as hinted at by Ben Bernanke, Federal Reserve chairman, on Wednesday, sent the gold price once again above $1,700 an ounce. Guidance for the cash cost of producing each ounce at Inata is $800 to $850 an ounce this year.

Most gold miners have underperformed over the past year or so but the view is building that they could have a better 2012. This includes Avocet. Indeed, last week Nomura named Avocet as one of its top three picks in the sector.

The group should continue to throw off cash and, although one should never buy a share on bid hopes alone, some analysts regard it as a prime acquisition target.

Avocet does not currently pay a dividend and it is likely to use its cash flow to invest in new projects, so Questor does not expect any payments soon.

The shares are trading on a December 2012 multiple of 14.1, falling to 8.1 in 2013.

Last tipped at 190p on June 28 last year the shares are up 19pc compared with a FTSE 100 (Euronext: VFTSE.NX - news) up less than 1pc since that date.

The shares are a buy.

..

Obviously Garry White doesn't know anything about Avocet... serious profit warning coming through...SELL.

Shares in Avocet Mining continue to tumble...

Shares in Avocet Mining continued to fall in early trading in London and were down more than 4%.

On Friday its shares plunged by more than 35% after it issued a profits warning ahead of its results for the half year due on 1 August.

The company now expects its gold production for this year to be reduced from 160,000 ounces to between 135,000 and 140,000 ounces following lower-than-expected output for the year to date and a reassessment of mining for the remainder of the year.

Two brokers issued downgrades on the company. Numis downgraded Avocet Mining from buy to hold and cut its target price from 230p to 130p. Westhouse Securities reduced the company from a strong buy to neutral with the target price down from 262p to 102p.

65p now and still falling

2012 Fourth Quarter Production Results

Avocet Mining PLC ("Avocet" or "the Company") today announces its production and cash costs for the fourth quarter of 2012 from its Inata Gold Mine in Burkina Faso:

· Total gold production for the quarter was 30,909 ounces at a total cash cost (including royalties) of US$1,246 per ounce. This compares with 33,067 ounces produced in the third quarter of 2012 at a total cash cost of US$937 per ounce, and with 46,102 ounces produced at a total cash cost of US$773 per ounce in the fourth quarter of 2011;

· Gold production from the Inata Gold Mine for the year was 135,189 ounces at a total cash cost (including royalties) of US$1,000 per ounce, in line with revised guidance. This compares with 166,744 ounces at a total cash cost of US$693 per ounce from the Inata Gold Mine for the year ended December 2011.

As expected, cash costs rose in the fourth quarter due to consultant fees paid to Alexander Proudfoot, a full quarter of costs associated with the hired mining fleet and scheduled maintenance of Inata's own mining fleet. The impact of such items is expected to be lower in future quarters. In addition, movements in gold in circuit, which reflect the timing of gold pours, added approximately US$190 per ounce compared with the previous quarter. This reflects 4,568 ounces being added to gold in circuit inventory during the fourth quarter, compared with a reduction in inventory of 2,631 ounces in the third quarter.

Anybody any idea why these (and TSTL) have tumbled so dramatically this am?

RNS out for AVM does not make happy reading, dealerdear.

Thanks for that db4. For some reason the RNS didn't appear on my screen at the time.

This was evident from last year.

post 185 - because those in the know knew what those not in the know didn't know and they didn't know they didn't know either! - an emergency cash call apparently

.

Were you actually considering investing here Mr C?

more than 3 years ago????
don't remember, but doubt it and certainly did not

Lots of gold minnows for you to have a look at. All seem to be high risk, imo.

minnows are of no interest to me ..... buy quality, especially in the current markets, though they're more indian bazaar (or even bizarre) than followers of newton