Great to see that the long awaited ML is another step closer to completion, though hope NF's "days away" doesn't turn into another "imminent". The carving off of a section of the former exploration licence out of of the ML isn't particularly unusual if those areas haven't been sufficiently investigated, but I hope we are able to secure it in continuation - this situation has potential to result in games with the other sharks circling the tenements should certain DRC players instead decide to seek advantage through transferring those Manono rights elsewhere. (e.g. AJN or Chinese players?)
For me however the crash today clearly relates to concern over the legal environment - ownership disputes are messy (whether spurious or otherwise). With AVZ talking about potential DRC or international legal action should the purported 15% transfer to Cominiere to a Zijin proxy have taken place, this points towards a potentially murky and problematic situation. Sure we have preemptive rights for that 15% under the existing Dathcom shareholder agreement, however potential legal fights with major power players and government elements in these jurisdictions are not always simple and straightforward, and in any case could take time to resolve and put to bed.
Add to this the shenanigans by the Kabila-aligned faction crying that they were cheated in the earlier transfer/sale of 5% and 10% from Dathomir (which appear largely sour grapes that the company subsueqently gained massive value), and you've got one heck of a mess. I really don't expect this portion of the dispute to go anywhere, we have good title to the 75% IMO, but when put together with alleged Zijin holding from Comeniere there is even a remote (don't attack me - I said remote) potential that should we lose out in both claims and the CATH deal still go through, that our holding could drop below a majority. Not going to happen, I feel, but surely investors can see the concern over even dubious ownership associations being brought to a fight. If nothing else its just unwanted instability when we need it most.
I'm still long and for now aren't going anywhere, but I suspect that our momentum may be slightly blunted for a time now that company has acknowledged the disputes, particularly re: Jin Cheng/Zijin, until they are resolved by courts or otherwise. Some big players may see this as too much uncertainty or risk. Others may of course see the potential, and the final awarding of ML and the catalysts which will follow - especially BFS - will certainly provide more upwards pressure, but IMO it may be significantly more of a challenge now to blast through our ATH than before. Will wait and see though, with fingers crossed that the Zijin news turns out to be false and that the other old disputes fade back into the distance..
AVZ Price at posting:
80.0¢ Sentiment: Buy Disclosure: Held
