haywood securities buy rec.
Haywood Securities have published a report on AVM.
Reads very well and plots out the next 5 years.
Main points : Dikilushi waste stripping has been completed, accessing higher grade ore. Cash costs however for the remainder of 05 will be US $0.92, dropping to US $0.76 in 06 when production will be 32 million pounds of Cu.
Kulumaziba in production beginning 06 with an estimated annual 37 million pounds of copper output. Cash costs of US $0.85 per pound.
Large exploration program underway on the Mutoshi and Kinsevere projects.
Valuation: Anvils NAV assuming a 12% discount rate for Dikilushi and Kulumaziba and 15% on the others and basing the calculation on a long term Cu price of US1.00 pp = Can $7.15 per share (approx Aus 0.75c). At a Cu price of US $1.20 NAV rises to Can $9.50 at a Cu price of $1.40 this rises again to Can $12.
In 2007 it is expected AVM will also be mining cobalt.
By 2008 it is expected AVM will have a SXEW facility at Mutoshi and one at Kinsevere in 2009
AVM Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
