I get how disheartening it is to watch paper wealth vanish. For many, this was a chance to secure their future. There was a window when things could've gone differently, but in my view, those in charge didn't anticipate the game-changing shift and mishandled the situation. They lacked the experience to navigate the complex issues at hand.
We just needed a stake in the world's largest hard rock lithium mine; any reasonable percentages would have been extremely profitable. When lithium prices skyrocketed and AVZ started losing control of the situation, it's puzzling why an equity deal couldn't have been reached between AVZ, Chinese interests, and the DRC government. Some argue that the Chinese can't be trusted. They distinguish between 'good' Chinese, such as CATH and other future Chinese buyers of the product, and 'bad' Chinese, like Zijin. That argument seems a little selective.
AVZ's refusal to negotiate, though probably legally correct, was a recipe for disaster. While a hard-line approach might succeed in other places, in the DRC, when the stakes became so high and adversaries began circling, a more flexible strategy was imperative.
Many have taken a big hit, not just from a personal perspective but this investment was shared extensively with friends and family. I found out about it through a mate who was all-in on the stock, including participating in the capital raise. After a steady flow of positive announcements, he shared the opportunity with friends, thinking the investment was now substantially 'de-risked'. However, just like everyone else, he was oblivious to the behind-the-scenes developments unravelling in the DRC and the impending chaos they would bring.
I'm sure other investors have similar tales, grappling not only with financial let-down but also with the discomfort of having touted this 'once-in-a-lifetime' chance to friends and family.
AVZ Price at posting:
78.0¢ Sentiment: None Disclosure: Held
