There is a strong tradition if beating up on "downrampers" on HC. Definition of a DR seems to include any poster introducing a measure of balance to discussions as evidenced by the comments around @makingmoneystill and @eshmun who add great value to HC threads.
I am in and out of AVZ as the price fluctuates. I am super excited about the resource size here, management from KE, and the potential for Chinese backing which attract plenty of investor interest.
The stock also has plenty of volatility that provide the opportunity to trade it for gains which I have done in the May run to the 4s and the current run to 9c. We are here I think to make money, and no apologies for taking these opportunities.
Volatility is inherent in the AVZ price, and a few items that drive my thinking are:
1. DRC politics...this is not a politically stable entity. The DRC president has a greatly disaffected opposition and is being unresponsive on calls for elections due in 2017..with the recent history of conflict in DRC watch that space
http://www.dw.com/en/president-kabi...nt-despite-agreement-for-elections/a-38775887
2. Funding and geography
Manono is in the middle of nowhere. Ports are distant - 1700km as the crow flies to ports in the DRC with around 1000km of rail or road to be constructed, or 1300km via Tanzania and the Great Rift Valley the other way.
The $15M Cap raise at 7c will pay to drill and tell us what is already largely known re resource size / grade. Bringing the resource to market will take some time (late 2020 in my view if they get jiggy on it) and a large amount of $. Chinese backers will be dilutive - infrastructure will not come cheap
3. Chinese backers - there is plenty of potential capital and the ability to move quickly on construction here, however having worked closely with a largely State-owned company on a Chinese backed mining project, I am aware that they look to the long game. They are very risk averse, moreso if connected to State-owneed businesses. Having locked in a resource, Chinese industry is well able to wait for the right market and production conditions to initiate development. The political climate will need to be stable and controlled for the investment to be forthcoming - rapid development is not guaranteed.
4. Management support for SP / existing SH
I am puzzled as to why management is raising at 7c if the AVZ upside is so large. If investors are convinced, then a raise at 9c or above would be a shoe-in. At 7c it seems like a gift to instos for a quick cash turnover. This fuels my view on a short term correction and a ST entry point below 8c.
I would be very pleased to see AVZ hit the stratosphere and GLTAH however this is going to take time and involve a few false starts IMO. Given my view of the facts above, I will take a more risk oriented view and not stake the house and kids on AVZ LT. I will ride the AVZ volatility and be back in when an entry point arrives below 8c and back out above somewhere above 10c, wash rinse repeat. DYOR
Cheers
BS
