Running discussion on SP, page-57330

Hi guys

I attended the AGM today and have some comments below.
Please also read other commenters’ opinions and comments on the AGM and please DYOR as there is a good chance I could have skipped/misinterpreted a lot of stuff and is just my best opinion on today’s meeting based on what I think that I remember.

1/ Other documents and comments which might help

Just a few documents which might help while reading about today’s meeting.

AGM results
https://hotcopper.com.au/threads/ann-annual-general-meeting-results.6431690/?post_id=57682826

It shows that resolutions were passed but also shows fair amount of people voted against some resolutions especially pertaining to performance rights

AGM presentation
https://hotcopper.com.au/threads/ann-agm-presentation.6431105/?post_id=57676991

A lot of the AGM was about this presentation. So obviously helpful to read at side of this comments. I’ve broken my comment based on pages of AGM below

My yesterday’s comment – interview with Cantor Fitzergerald
https://hotcopper.com.au/threads/running-discussion-on-sp.4111732/page-57149?post_id=57650816

Since a lot of today’s AGM was about the presentation, it might be useful to read / hear what Nigel had to say about the company in detail during his meeting with Cantor Fitzgerald.

2/ Basic info about meeting

Hybrid meeting- physical location and online

Meeting was quite professional with John Clarke chairing the meeting from UK through video link, and several people from management attending – Nigel, Johnston, Rhett, Huljich, Jager and Cohen from memory. (refer presentation pg 3/31)

Around 25 to 30 shareholders were present

3/ Chairman intro to company

Hereon, I’ll mention what I remember.

We had a successful year.

Substantially close to becoming a leading producer

Capital raising was needed some months back to get the 10% extra equity stake

Mine life extension to be looked into

Pei Zhenua and CATL have funds, technical expertise etc

Placement some months backed by shareholders in different parts around the world

Debt component for funding now would be less than 50% because of substantial funding to be received from CATH

FID to follow

Congrats to team and thanks to shareholders

We are transitioning from explorer to a leading producer

Meeting declared open at 2:09 and quorum present

Technical stuff of meeting to start now

4/ Resolutions

Resolutions to be discussed now. Refer point 1 of my comment where resolutions can be found (AGM results)

Resolution 1 - Remuneration report

Management mentioned that number was considerably less when issued originally, is subject to performance hurdles.

As can be seen in the AGM results, around 20-25% shareholders in general had already case their “against” vote against most resolutions pertaining to performance rights

Johnston performance rights resolution 7
Query was that EPC contract is part of normal duty online query. Nigel mentioned that it is also a major milestone and useful for weeding out contractors, making sure budget is okay and everything is cost effective

Management answers for resolution queries in general were Short and brief answers.

Now poll for resolution was conducted. Automic share registry and auditors were present

Meeting closed

5 / Nigel Ferguson short presentation (Refer presentation pages 1 to 7 of 31 pages)

Nigel gave a short presentation now.

Most of management present can be seen on pg 3/31 of presentation

Same board and no changes this year


5A / Nigel speaks - Awakening monster (Pg 4/31)

Expect 400 mil tonnes that we have to go up once drilling more

5B / Nigel speaks - Project background - Pg 5/31

Mining license to be obtained fairly soon

Shareholders would be pleased with BFS

15 member committee reviewing as mentioned in my yesterday’s comment. 5 cases in front of them and 4 have been rejected. AVZ application still there
No hurdles expect

Extension of life likely and lot more than 700,000 tonnes of sc6

Reserves jumped up

Power ministries MOU signed - hydraulic resource

Water readily available from man made lake

5C / Nigel speaks - Project timeline - Pg 6/31

Project timeline. Self explanatory. Refer what is done and not

5D / Nigel speaks – Product export routes defined - Pg 7/31

Kabondo Dianda first and then Export routes Dar es salaam and Lobito

Any issues will be handled. There are sufficient wagons. Transporter SNCC very engaged

Drc government considers batteries strategic – so good for us

6 / Technical update by Graeme Johnston – Pages 8 to 14 of 31 pages

Look to expand Roche Dure resource and reserve

Significant intersections more than 2%

Potential for tin Exploration plan to unlock potential

Tin price rise from 16000 to 35000 within reporting period

Plan for maiden tin resource

Access problems earlier but solved

Carriere de L’este is an unusal body. Looking for maiden resource. Same procedure as Roche Dure

2types of tin deposits are there. One area alone exploration target 821 tonnes

Johnston looking to develop under explored assets while colleagues build mine

Tin has a bright future

7/ Marketing and Project update by Ben Cohen – Pages 15 to 21 of 31 pages

EV revolution just started

only 8000 Evs sold in 2020 – so still very early days
Lithium demand to rise 700% rise in decade

Government policy is expanding the EV revolution

Plan to phase out ICE vehicles by 2040

Prices tripled for various types of lithium

Auction platform supports market price and transparency

AVZ Share price tracking SC6 price

Briefly on project – refer 3D pic on PG 21 - plant Rom pads, PLS trains, etc

Early works vision - waiting for mine license, FID , then contracts can be awarded quickly

8 / Finance update by Jan de Jager – Pages 22 and 23 of 31 pages

Cap raise of 40 million some months back needed to increase stake in project

Needed to sort this before further discussion for debt, dealing with CATH etc

CATH needs China government approval

20 million break fee received and is in escrow

9/ Summary update by Nigel Ferguson – Pages 24 of 31 till end pg 31

Refer points below

9A / Opportunities – Nigel speaks – Pg 25/31

Nigel gave summary of main stuff

Other opportunities are there

Significant exploration potential

Tin and tantalum good potential – I think he said 600 000 tonnes but not sure if I heard right

Look to bring “middlings” to sc6

Don't need to transport sulphuric acid if plant on site and this can be cost effective

Discussion with transport providers including SNCC

Looking at solar for camp and process plant

SEZ on table for tax concessions

Downstream potential,- hydroxide etc.

Pei Zhenua and CATH very supportive - Looking to ship PLS around globe which would be more cost effective than SC6

If sufficient money, we can easily expand

9B / ESG - Nigel speaks – Pg 26/31

Avz foundation has role

Polio vaccination, treatment of polio and cholera

ESG report by qtr 1 next year

Plans for each qtr mentioned on Pg 26

9C / Sustainable development , High standards - Nigel speaks - Pg 27 and 28/31

One of Lowest carbon footprint

As close to zero emissions

There is Carbon tax and waste charge in Europe. So we look to reduce carbon footprint and waste Hence push for PLS as PLS is 96% lithium and 4% waste

9D / Takeaway facts -Nigel speaks - Pg 29/31

Tier 1 can only get better

Great expansion plans

CATH deal makes funding easier

Lot of finance DFIs after CATH deal

Experienced team in DRC pushing with govt all way to top

Getting more traction

Follow DRC forum meeting coming up

DRC President has vision.

DRC could be new force to reckon in batteries

AVZ highly Leveraged to EVs obviously

Downstream plans for hydroxide

Diversification later as we start looking for more projects but need to walk before we run

Might be corporate activity

10/ Questions session

CATH deal end of Nov – not absolute deadline. There won’t be issues
They need China approval. Mining license should be favourable

11/ Conclusions

Please DYOR and note that there could be several mistakes above and I could have heard a lot wrong. I’m only sharing my own notes based on what I think I heard and these should not be relied for any of your invesment decisions. Please refer comments by other commenters for full info

Meeting as can be seen was mainly Chairman intro, resolutions and then AGM presentation stuff

I think my yesterday comment covers lot of stuff from presentation
https://hotcopper.com.au/threads/running-discussion-on-sp.4111732/page-57149?post_id=57650816

Resolutions passed but with around 20-25% against votes for many performance share resolutions.

I like the fact that different management staff spoke about different aspects and this gave a perception of roles being very nicely delegated.

Cheers