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AVZ avz minerals limited

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Gouldians

933 Posts.

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03/08/18

21:58

Post #: 34716502
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Originally posted by ericson ↑

The following AIMHO with facts verifiable with simple Google searches.
So whats happening?
The company sentiment and SP has now rebased from over-hyped and under-delivering to seriously and properly managed company steadily progressing the mining Feasibility Study of what we now know is truly the largest Lithium deposit of its kind and importantly with high concentration, low impurity and significant tin credits. Not what the buyers of the 30c’s will see as particularly comforting but its necessary if the SP is to go beyond 37c.
Why is the prospect valuable?
In the next 10 years Li demand will increase by a factor of 5 to 10 times. Mining is a long term strategic undertaking and this is the market demand forecast that has to be satisfied. When taking the necessary longer term view, existing near-term infrastructure and transport challenges (whilst frequently quoted) wont impede the market needing to access the quality and quantity of this asset sooner or later. Things only get stranded when there is no capability and/or desire by another party to mount a rescue.
There is another important value to the Li resource at Manono and that is its expected high quality metallurgy. Li and its use in the new disruptive technologies requires bespoke post-mine processing and this is why end-consumers, for example battery makers, require more upstream involvement and vertical integration in the mine: the metallurgy of the base mineral seeds this bespoke processing and as such is now seen as critical. Another knock-on effect of this necessary up-streaming is the need to for consumer-offtakers (eg battery makers) to strategically control the mine if its big enough and of a high enough quality to become a strategic global resource!!!
The future for the new AVZ management?
The reality is that they are a small team currently in charge of this resource. They are surrounded by powerful forces who will be focussed on the resource with respect to the points above rather than the fortunes of AVZ, its SP and its shareholders – under such conditions the company is expected to be subject to some considerable buffeting shall we say! With this reality in mind AVZ management are bravely taking this company forward against all expectation since the TO they were convinced would happen vanished (for now anyways although we really have to believe that this TO gavel could drop anytime).
They are absolutely doing the right things. This resource will never remain stranded given the points above so the company should move it forward commercially and ignore the existing SP (although I’m sure they do try and maximise shareholder value at every stage). I don’t necessarily agree that release of x, y or z will necessarily be the panacea for the SP. No, the realisation of a SP well in excess of 50c will be assured by progressing with the stated commercialisation steps over the next 6 months; ensuring ongoing survival funding and continuing JORC drilling on Roche Dure and importantly Carre de l’est.
If you hadn’t already guessed I have evolved into a long-term, strategic holder of AVZ shares. The benefits, as I see it, are that the longer I hold, the bigger the final SP (50c++) I will realise for my investment.
DYOR
Ta-Rah

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The SP is a concern for more reasons than just shareholders losing wealth. We basically have our hands tied as we can’t raise enough money at these low levels to start mining without heavy dilution.

And I’m still concerned with why the Chinese, or any other party for that matter, hasn’t had a tilt at the company at these low levels. ML apparently working hard behind the scenes but he is obviously struggling to get the Chinese to commit. The question is why...

Manipulation can happen but you only need someone else to launch a TO bid and you will have egg on your face. With a MC of less than $250M, the worlds largest lithium deposit looks cheap to us retail holders but the big money obviously doesnt think so.

Somethings not quite right.

AVZ Price at posting: 12.0¢ Sentiment: Hold Disclosure: Held
25 Upvote

4 Great analysis

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