Few historical Chinese acquisitions:
1. TianQi Lithium: Acquisition price was about
A$163/t.
in 2012, acquired Talison (100%) for total about
CNY5b (~A$1b) in 2012 before lithium boom, then sold 49% to Rockwood for US$475m; (Greenbushes deposit:118.5Mt @2.4% Li2O - 6.1Mt LCE)
AVZ's Manono deposit exploration target: 1Bt - 1.2Bt @1.25% - 1.5% Li2O (AVZ's shared mid figure: ~19.65Mt LCE,
Three times of Greenbushes'.
Lithium price is up +300% since 2012.
Based on TianQi Lithium acquisition of Talison/Greenbushes depoisit in WA, for $1b in 2012,
AVZ's attributable Exploration targeted lithium resource is three times of Greenbushes',
Theoretically, $1b (TianQi Lithium paid) x
3 times deposit x
4 (300% increase in lithium price 2012-2017) =
$12b,
then Discounted for RISK factor ratio (Early exploration stage, country risk)
2. LATEST ACQUISITION IN CHINA: Acquisition price was about
A$297/t.
On 16 October 2017, a Chinese company bought 60% of a Canadan lithium deposit (still in development, not in production yet) with lithium resource of 14.25Mt @1.4% Li2O (M&I:12Mt), total
LCE 0.258Mt for US$60m.
Yesterday, news reported, some shareholders of the vendor complained
the project was sold too cheap.
3. AVZ current valuation : A$26/t on a fully diluted basis
AVZ's middle figure of attributable (Exploration target) LCE is about
19.7Mt.
AVZ, currently is standing at $26/t, compared with ASX peer's average $274/t;
recent China's acquisition of a small lithium deposit: $297/t.
DYOR & GLTAH.
