Investors will need to take the time to do a proper due diligence on AVB's projects in Brasil and not just look at the trading patterns. I feel that there is alot more upside for long termers on the horizon as the projects have been significantly derisked with the previous news release.
Instead of focusing on the spectacular results of one intercept, one has to look at the other metrics of making a deposit economical. As i have said in a previous post for another firm, too many investors are paying slavish attention to the price of the stock. If investors don't have some idea of what the value of the stock is, the price information will be useless.
Money is made on the arbitrage between price and value. Of course, the price information is always easy to obtain. But one needs to have some consensus on what the underlying value of the company is and how the company will add value through exploration in order for that price information to be any use.
As such, one look at the results should let us know the obvious...that is, we might be looking at a HIGH GRADE, NEAR SURFACE deposit/s. As such, we will probably have a low cost, open cut producing mine with numerous satellite deposits to feed off on, if further drilling proves its viability.
By browsing through their release, one will be able to observe how important the next announcement will be. Not in relation to the grades but rather if they have discoveries along those drillings. If intercepts are found at ARVD 101, 102, 76, 99 and 100...we have a wider pit to look at as it is open in other directions and strike. We can also say that ARVD ARVD 83,84, 85, 86 and 91 might show good indications of copper grades and prove its depth. But there is so much more to this play that will be revealed in time.
My point is that investors should start looking at the results [i.e. facts] of their drilling and management calibre when putting in your hard earned money and not too much at the chart trends. Charting is extremely useful to build a buy and sell position but the reasoning behind those investments should be established from the start.
I am bullish for this company but i do see a healthy correction before another significant rerate with options giving a better leverage.
AVB Price at posting:
6.7¢ Sentiment: LT Buy Disclosure: Held
