Avion on the tarmac

Jan 20th, 2010 – Comment

With increased drilling on their poperties to expand their resource base, and assuming that they can meet their production target of 100,000 ounces this year AVR looks well positioned to advance over the next 12 months.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Precious Metals.


 

avion

Hi Lou,

I recently read your article on Petaquilla Minerals (PTQ) and I enjoyed your insight on the company. I would like to see if you would happen to know anything about Avion Resources Corp. Both companies have had quite the run and I wanted to see if these upward trends will continue. I am a holder of both stocks, PTQ for a few months and AVR very recently.

Thanks for your time.

Carmelo

 

Hi Carmelo,

Thanks for the assignment. Avion Gold Corp. ( AVR TSXV) is a growing gold producer which has concentrated its efforts in West Africa. The major theatre of operation for the company is in Mali where they bought $100M in assets for $0.20 on the dollar in 2008.

AVR has no debt and has not hedged its production which reached 21,300 ounces of gold in Q4 2009. Annual production in 2009 reached approximately 51,300 ounces since production began in Q1. Forecast for the year was 50,000 ounces. The plan for 2010 is for AVR to reach 100,000 ounces for the year. Longer term the goal is 200,00 ounces per year.

avr2

The three year chart provides another great example of a V shaped bottom from the late 2008 lows to a golden cross in April of 2009. The stock was range bound with support at $0.30 and resistance at $0.40 through the fall of 2009 and then a break above $0.40 in the late fall.

The current advance has taken AVR toward resistance at $0.80. If it can make a move through $0.80 there isn’t much resistance towards the 2005 highs of $1.70.

 

 

AVR

When you look at the six month chart the RSI indicates that the stock has recently just dipped out of an overbought situation, but only just. The MACD has turned lower after signalling the advance that took AVR from $0.45 late December  to $0.73 yesterday.

 

I like what management has accomplished in terms of production. With increased drilling on their poperties to expand their resource base, and assuming that they can meet their production target of 100,000 ounces this year AVR looks well positioned to advance over the next 12 months.

In the shorter term the stock price looks to have gotten a bit ahead of its support and may have to move sideways a bit longer before it makes another jump higher.

 

HAPPY CAPITALISM!

Categories: Precious Metals
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media