Avion Gold Corp AVGCF

RE: RE: RE: RE: market cap ?

[baystock1]

>CompareAvion who essentially was created less than 3 years ago and got intoproduction within 18 months to Axmin who've been around for 10 years andhave not yet built a mine. With BFS due out in 2011 at the current SPthere's no way they can finance a mine without huge dilution. BTW thatJohn Embry quote is from January 2008. I see Charles Oliver went from adon't buy in July to a Buy recommendation in November which most likelymeans he needs people to sell his sharestoo. There's no comparison between Axmin and Avion. Avion hasaccomplished more in two and half years than Axmin has in a decade. <

I agree that avion has done good. Avion has taken over the failed assets of Nevsun in Mali. If you add in Nevsun's involvement you will find that these Mali assets have also been under development for 10+ years. To compare like with like you should take into account the change in top management of Axmin that happened early in 2010 with the merger between Afnat and Axmin. The management of Afnat is now in charge. I would contend that the clock for the new Axmin got reset 8 months ago and there has already been substantial progress since. In 2 years the Passendro mine will be in production at the rate of 200,000 oz per year and Axmin's market cap will be $1 billion+. I am confident that AVR's market cap will be considerably less than 10x that of AXM at that point, ie. axmin will outperform avion going forward.

Your other negatives about dilution and share structure are red herrings. It is share price to cash flow or market cap to cash flow that really counts. I have factored a reasonable amount of dilution to finance the new mine and made the case for Axmin to cash flow 16 cents per share (more than the current share price) in 2013 when Passendro goes into production. This will result in a dramatic re-rating of the share price.