Running Commentary on the SP Movements., page-9622

“Are the chinese really waiting for a confirmation that it's the biggest version of itself on the planet?”

Huayou’s MC rose significantly from about the time they first invested in AVZ. Their current MC is about $7.8 billion USD which is up about 3 billion from a total MC of $4.7b USD from just before they invested in AV in August....strange hey.

Huayou have about $800m cash in hand and due to raise another $250m+. It’s a lot of cash ; but compared to the likes of CATL whom aim to raise $1.97 billion through an IPO of 217 million new shares by the end of June next year, which will indicate a valuation of around $20 billion MC ...Huayou is much more exposed to a billion dollar financial torpedo and so they’ll probably be more risk adverse than CATL.

Anyone ever sit in on precontract risk review and you’ll know that there will always be a exposure risk factor that will need to be applied to protect the company; the ‘risk’ and ‘opportunity’ factors do go to offset each other somewhat and although the opportunity Manono possesses for a potential suitor is immense ; their is always some risk factoring that needs to be applied. CATL may only require another 2500 to 5000m to be drilled resulting in good results , before they get the green light from the board to proceed; whereas Huayou, being more risk adverse and financial susceptible if that for some reason Manono just didn’t live up to expectations for whatever reason ; they may require for example 5000-10000m of drilling before getting the green light.

Logically thinking one would think that it would be CATL that would move first and would be financially be just too strong for Huayou. Huayou may have $800m plus another potential $250m giving them just over a billion of cash in hand...a lot of cash , but still take out what Manono May cost them on TO alone....we’ll they’d need go scratching around and looking down the back of the sofa for considerable capex / opex costs.

From Huayou’s public announcement afew days ago -




‘Huayou Cobalt can swiftly gain exposure to lithium resources’ should the Manono project registers in range from 400m to 800m tonne.....bit of a strange comment hey? Are Huayou not expecting any competition?

Where would Huayou get the cash to develope the mine After blasting their cash at hand on the purchase price? my thinking is that it will be a JV arrangement between Huayou and CATL which will suck Manono up and take it to mine. There will be about 3billion in cash soon enough between them; enough to buy develope and probably a wack of rainy day money still at hand.

Huayou to mine cobalt and lithium feed it into CATL the battery manufacturer and out to the market; it would be an absolute cash cow for both companies. A ready made flow mechanism ; Supply, miner, battery processor and out to market..a match made in financial heaven.

400-800mt range 1% to 1.5%...somehow it doesn’t sound like they will wait till it’s all drilled out. Wait too long in any case and you can bet others will just start to pull their triggers .

A 8horse says, patience is a virtue. We’ve heard the phrase ‘right place right time’ mentioned many a time on many a stock thread only for those stocks to be still floating down the river.

We are now in the middle of a huge energy shift. Manono looks set to be the largest high grade lithium resource on the planet and the DRC which already feeds 65% of the worlds cobalts ; to become the powerhouse in EV battery metals.

Indeed ‘patience is a virtue’, especially when you have a team of rigs about to hit site any day now.

Happy Xmas

OW