AVZ (ASX) Running discussion on SP

Originally posted by suds100: ↑

This is the announcement ryh and zenoah mentioned.

Background to Claim
On 21 April 2015, Tanzania issued a Retention Licence for the Project, covering the same area as
the Ntaka Hill Prospecting Licence, for a period of 5 years.

In July 2017, the Government of Tanzania amended the Mining Act 2010 by, inter alia, abolishing
the legislative basis for the Retention Licence classification with no replacement classification.

On 10 January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018, which made
it clear that all Retention Licences no longer existed and that the underlying rights over all areas
under Retention Licences, including the Retention Licence held for the Project, reverted to the
Government of Tanzania.

During the time from January 2018 to December 2019, the Company actively engaged with the
Tanzanian Minister for Minerals and the Mining Commission in an effort to resolve a suitable tenure
mechanism for the Project Licence to be reinstated. At all times Tanzanian Government
representatives reassured the Claimants’ representatives, as well as Indiana Board members that
visited Tanzania for the purpose of collaborative engagement with the Government, that their
historical investment would be recognised and that their rights would be respected and protected.

On 19 December 2019, the Mining Commission of Tanzania announced a public invitation to tender
for the joint development of areas covered previously by Retention Licences.

This initial invitation to tender provided that the successful bidder must compensate the previous
Retention Licence holder for its exploration costs incurred. This public invitation was not sent to the
Company or the Claimants but was advertised on the website for the Ministry of Minerals.

One day after that invitation to tender was published, the Mining Commission of Tanzania
announced a revised public invitation to tender on 20 December 2019, which removed the
requirement that the successful bidder must compensate the previous retention licence holder for
its exploration costs incurred.

A different country but the arbitration was through the International Centre for Settlement of Investment Disputes (“ICSID”).

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The interesting thing about Indiana's situation is twofold (1) the govt of Tanzania failed to live up to its agreement to recognise and safeguard Indiana's interest and sunk costs in the project, and (2) the Tanzanian govt changed its mining legislation presumably through the parliamentary process. The changes subsequently applied to all explorers going forward. Indiana was treated unfairly by the Tanzanian Mining Commission, which was recognised by the ICSID.

In AVZ's case, the Democratic Republic of Corruption (DRC) singled out AVZ for unjustified treatment due to govt corruption and bribery. There was no carefully considered legislative basis for its shoddy treatment of AVZ...just corruption and bribery in order to steal away AVZ's legitimate stake in Manono, and give it to the Chinese.

The DRC govt has no option but to fully restore AVZ's rights in the project, including the mining licence or face an eye-watering multi-billion dollar ICSID award. Regardless of the potential outcome, AVZ may never be allowed to develop the site and build its mine. The DRC govt is likely to put up various administrative road-blocks on everything in order to stall progress and force AVZ out, and let the Chinese in.

Sooner or later AVZ may need to negotiate an exit package. I hope they have rock solid negotiation skills.

Cheers
F