where to now?

  1. NT
    1,708 Posts.
    Can we blame Domum for the lessening of buy pressure for AVL shares - now that he has sold down/out!
    "Tee-heee" - just joking Domum.

    However the increased buying support after the recent road show is more subdued now.

    Past posts suggest share-holders have been miss led, profits at this formation stage are not as great as expected, management have not been capable in managing transport and refinery costs, that the whole world has a jaundiced view of the Congo, etc.

    There is no information that indicates any of these criticisms are based on facts - presumably these criticism are based on feelings of frustration rather than being valid reasoning based on information.

    As previously posted a number of times AVL is NOT a ROCKET-SPEC.

    AVL is now a mining company with known deposits of minerals making a profit and working towards greater profits with financing and commencement of stage 2 - to be in place early in 2004.

    There is no great speculative nature to AVL at the moment.
    Not withstanding this AVL does have potential to explore and discover more mineral deposits.

    So if traders are looking for volitile specs offering quick profits they may look else where.

    AVL becomes a promising 2 to 4 year investment.

    As such the number of potential investors is reduced - there are undervalued "blue chip" companies which offer much competition.

    That AVL has a huge "risk premium" - 60 per-cent - has been an irritant for those who understand the real value of AVL - and potential.
    The risk premium is based on a history of uncertain goverment of the country and a history of tribal/border conflict.

    Tribal conflict has been reduced to one small pocket now being contained by French forces and soon UN peace keepers.

    The probability that the final stages of such conflict in the Congo is now in place should eventually reduce any Risk Premium for these problems.

    No concerns about the Congo Political set up have prevailed of late.

    Information from those who are in face to face contact with the Congo Government indicate that there is great progress being made.

    The relationship between military forces and government appear to be resolved for the better.

    AVL has been one of the very few emerging miners that has berformed on time, on budget, and with virtually no set backs - conserving company finances with minimal dilution of shares and minimal allocation of free rights or options to management and employees.

    The theme of this post is to suggest that the risk premium is excessive.

    As AVL commences stage 2 it is more than likely that a "market sage" will announce that the risk premium for AVL is excessive and that it is one of the most undervalued mining companies on the market.

    Although some are predicting a surge in AVL to 16 cents or more this week my suggestion is AVL will possibly move to 16 to 18 cents in 4 to 6 weeks time.
    This surge to be brought about by the quarterly report due in July.

    Early in 2004 AVL could move to 25 cents based on stage 2 being implemented.

    Early 2005 AVL shares could be closer to 50 cents due to utilisation of mineral deposits not yet being mined and further discoveries of mineral deposits.

    And should the risk premium be reduced or removed???

    Others may be more able to suggest possible upside in AVL share price.

    And should new mineral deposits be discovered?

    Once again this likely scenario would have an effect on share price that would be difficult to predict.

    This is all my opinion anyhow!


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