Thoughts on AVM... is it over-valued?I'm glad you asked.
No, is the short answer. But there is a LOT of information yet to unfold, before this Company is a low risk purchase. Saying that, my average entry price of 0.495 is shown on the chart. While the price is depressed and there isn't any positive sentiment, and I am buying, I see no benefit in publishing my bullish viewpoint. I might want to buy more at a lower price, right. Well, I did buy quite a bit between mid-April and mid-August 2025. AVM has gone from about 3.7% of my portfolio to over 10% for a gain of 176%. So is it time to take some profits.
Well, #1 it is great how well silver has been performing, and there is a lot of attention now coming on Companies with an appreciable silver reserve. When I bought AVM it was clear (even at the silver prices then) that AVM was "un-loved" and un-appreciated. Relative to its ASX silver explorer/developers AVM was substantially under-valued. How undervalued? At the time AVM had around 45Moz silver foreign reserve at around 400Ageq grade for a Market Cap of around 8 to 12 million. So, relative to its peers, each established ounce in the ground was drastically cheaper. I worked out at one stage that vs Silver Mines that each AVM ounce had 5 times higher grade and each ounce valued a 1 / 7th the price per ounce. That appeared to be quite a mis-match.
But that isn't why I bought a boat-load of AVM shares. I viewed the Victorian gold exploration assets as fundamentally under-valued. In light of that, I saw the under-valued silver assets as essentially coming for free. Why do I see the Victorian asset as undervalued. Well look at the drilling results (so far they have only drilled out about 1% of their claim). But one drill result caught my attention;
11.7 meters at an average grade of 160.4 grams Au/ton (historic hole from 2021 I believe, from before they purchased the tenement).
That is a spectacular result and doesn't just hint that there is gold there, it SCREAMS it. Even huge Victorian developments like Southern Cross, started somewhere. I thought, there was a "non-zero" chance that AVM was onto a massive winner. Victoria is also improving as a mining jurisdiction, and other miners I follow have reported quite encouraging changes of late. They describe the state mining regulator as "motivated, accountable, and transparent." If, when, and how a mine will get built on AVM's tenement are completely unknown and will remain unknown for some years. But I was reading a LOT of drilling reports that had marginal results, like 1.2m at 2gpt at 250m depth or deeper. But 11.7m x 160.4gpt stuck in my brain. I could not understand why anyone would see a tiny Company with several million silver ounces and extremely prospective gold tenements wasn't valued an order of magnitude higher.
They also made a very cheap purchase of a closed gold/silver mine in Mexico more recently, to bring their silver assets up to over 100Moz. But still the market didn't really move. So, I kept buying. I think often, people need to be told when something is valuable, they can't recognise value when they see it. They need some sort of third-party confirmation. That came with analyst coverage and then a capital raise.
So, where is the "top." No idea, we will level-off and possibly even sell-off gradually, but as more drilling results come in and the silver and gold assets improve, the price will keep steadily marching up. If each AVM silver ounce in the ground becomes valued on a par with those in SVL's claims, it will increase AVM's value by 4x overnight. That is without even considering the future value of the gold claims. I will be following the news daily, but for me, AVM is a buy and hold on a multi-year basis. Considerable up-side remains in my view.
