a strong buy now., page-2

re: a strong buy now. corrected version! Now is one of those special times when opportunity knocks.

Anvil well held in Canada and Australia is into second period of progress.

Recently "overburden" build up at the Dikulushi open cut mine stopped the strong growth in profits while removal took place.
Institution support weakened as this event was sudden and unexpected.
Institutions need to base valuation of companies on actual past profits and predictable profits to avoid moving into speculative considerations.
The unexpected fallback in profits meant no strong buy recommendations could be given.

My impression is that management worked very hard at mine commencement to push profits above all else so as to be in a strong position to raise finance for future growth.
This was a successful exercise as fundraising has been successful and now Dikulushi has paid a penalty as management tidied up and have ensured open pit mining is now back to normal.
Normal meaning strong profits are again soon likely as output increases, concentration of ore is upgraded and richer ore seam gets closer.

Institutions were happy to value Anvil at 60 cents - or there abouts - on Dikulushi output alone.

STAGE 2
A new "mine" (Kulumaziba) - processing plant - is now being put in place.
A very simple operation to process copper rich tailings from many years of previous mining.
This mine will be operational somewhere close to September this year.

Once both mines are in operation and have produced strong profit results institutions will have results to place a higher valuation of Anvil shares.

If Dikulushi is conservatively worthy of a 60 cents valuation then add valuation based on the additional profits from Kulumaziba and the figure of $1.20 comes to mind.

This figure - $1.20 possibility - is based on the prognosis that both Dikulushi and Kulumaziba have been proven through actual profits presented in a quarterly report.
The first quarterly report for 06 in April next year is the one!

In the meantime as Dikulushi progresses towards full production and completion of Kulumaziba draws closer one should anticipate strong increase in Anvil share price.

First and quickly to 55 cents then 60's and 70's by the time Kulumaziba starts production.

My tip is about 80 cents when last quarterly report for 05 is presented in January 06.

Once these two mines are working well management will move to develop large - long life - resource deposits which will place Anvil into a mid-range world ranked mining company.
But that is another story.



POSITIVE DEVELOPMENTS

1. Anvil manager has been nominated for consideration as an entrepreneur of the year. (One should back good management).

2. Anvil company has received world bank insurance which means the sovereign risk factor is no longer an issue and institutions need not reduce valuation outcomes for Anvil based on such factors.

3. Rebel problems in the opposite corner of the Congo are now being strongly put down.----

http://www.csmonitor.com/2005/0510/p06s01-woaf.html

4. Exploratory drilling in areas known to be viable large deposits has taken place (is also ongoing) with company waiting analysis of ore sampling.


Whatever the price of copper in years to come Anvil as a world lowest cost producer will be there.
Eventually expanding total production of copper - along with associated silver and cobalt.

Expect mining operations to move to other countries and continents and to include gold production and possibly other.

However it is the short medium term that concerns us most of all.

This is where Anvil stands out.
Not as a blue sky, risky spec but as a well managed company with developing strong profit flow.
With much greater prospects ahead.

Time to buy is when market is in doldrums and share price is weak.

Now - and perhaps in the next month too - will most likely prove to be one of those special opportunities.

That's how I see it anyhow.

Cheers,

NT