i'm a mug , page-16

When people talk about CGT of 25% and 700% gains, I think I am right to assume they are talking about the SP from today. If they are referring to the 2c days, then I don't see what benefit that information is to someone looking at entering AVB today.

I do however see the benefit of them ramping this stock up. Find bunnies to buy and hold so that once your 12 months is up, you get your 50% tax concession (which is the equivalent of the SP rising 50%) and then you dump at the highest price possible and move on as there is no more value left in holding AVB longer.

I guess we all now know what was meant by, "Remember that the share market is a most effective mechanism of wealth transfer from those who have educated themselves, have a plan and patience, to those who have none of these qualities."




When they announced the HGZ, the SP reached a maximum of 23.5c. At the time, there were 511m shares on issue, giving an undiluted MC of $120m. For me, this is the maximum MC the market will ever attribute to AVB, whilst it is clearly still an explorer.

Since then, AVB have done a CR and options have been converted. Currently, AVB has 787m shares, undiluted. If we were to work on the MC of $120m, then the SP equivalent is 15.25c.

IMO, based on those figures, expectations of 18-23c are therefore unrealistic if you are relying on more drill results. They need to use a different trick to get the SP past the MC ceiling of $120m. Acquiring more tenements and drilling them to China is the same old trick.

Since the options are well in the money, if we work on a diluted 949m shares, the SP equates to around 12.65c with the MC of $120m. As options are converted and dumped, the SP will continue to fall to that target. As 12 months is also approaching for many early holders, I see another reason as to why the SP will decline in the coming months.




For me, the decision to hold or trade AVB was made by MW. When a director sells half of his holdings, it tells me he is hedging his bets. Someone doesn't sell half if they're confident of succeeding in the long term. Sell now to guarantee some profits, keep some to free carry 'just in case' it turns out to be one of the 5% of companies that make it to mine.

If there is a 50% doubt in a director's mind, then that puts 100% doubt in my mind. I'm sure he would have loved to have dumped it all, but as a director, that would have been irresponsible. That would really have spooked the herd and sent the SP back to 2c.

I loved the reason given for the sale. "The proceeds from the sale of these are being used to meet commitments including tax liabilities."
But what came first? The chicken or the egg? If anyone sold 2c shares for 19c, they too would have 'tax liabilities'.

That's my 2c worth on AVB, you may now all proceed to thumb me down.