a pause that refreshes?

Do not get the feeling that there have been a negative outbreak on Hotcopper.
Although SB200 deserves a chuckle perhaps.

While the latest crunch in Anvil share price is unexpected and surprisingly strong this is the famous "mania" part of the title of a classic on investing in stocks I believe.

The slump and instant pessimism in the copper market and exagerated slump in Anvil share price defies the rational.

The Chinese ANNOUNCEMENT (are they really serious? Will it happen and continue should "favoured" industries look like crashing?) should not be considered as doomsday.

Does anyone in their right mind believe that consumption of copper will be reduced in the coming six months?
What is the liklihood of Chinese imports being REDUCED even if growth is allowed to fall from 10% (?) to say 8 or 7 or 6%?

Anyhow Copper stockpiles are depleted.
Any surplus of supply will no doubt be eagerly snapped up to replace depleted stock.
However this is not a liklihood any time soon.

A fallback in copper prices is more positive than negative long term as the liklihood/degree of a rapid uptake of new mines or rejuvinating old mines is reduced.
Also copper substitution (if possible) is also less likely.

Anvil will thrive in a lower priced copper market.
Remember the Australian currency related to the $US will weaken in proportion to falling mineral prices.
This maintains a relative financial balance for Australian miners.

Some more able than I in these matters might be able to indicate the fall of copper price $US last week and the fall in the price in $AU terms after the slump in our currency and the effect as a consequence of falling price on miners.

It would be difficult to argue that there has been such a slump in world copper demand that copper prices will continue to dive.

Anvil holders will remember the excitement - not long past - when Anvil share price broke out of the 11 to 15 cents range - and moved to 20 plus cents.

A fall back to 40cents?
So what? If it was to happen!

We know the copper price in Australian dollares terms will be more than adequate for some time to come to ensure healthy profits for Anvil.
More than one would have hoped for even - some months ago.
We know on present profits Anvil is undervalued.
We know come the end of June when stage 2 is operating that profits will double.
We know that at least one additional mine - to Dikulushi - is likely to commence development this year.
We know that the listing in Canada will cause a re-rating of Anvil to bring share prices close to intrinsic value.
We know exploration of tenaments held by Anvil will be very promising.

We should also accept the market has over-reacted to the China statement.
That copper is not on a downward spiral to oblivion.- Perhaps some will say the jury is still out on that one - I will not go any further into that!

Anvil holders take a few weeks off.
In those few weeks the probability is that -
1. The "China Statement" willl be seen in perspective and markets will return to a rational state.
2. Copper price will find a level - higher than Anvil requires - or expected some time ago.
3. Demand for copper will not collapse.
4. Anvil share price will take off before/on listing on TSX. The bounce will be similar but opposite in nature to the recent slump.

A more mellow tone has taken over stocks of this nature.
90 cents AVL share price by third quarter report is probable - not just possible.

Cheers

NT