AZL Daily Report, page-520

Well, well - is this the beginning?

(A long post. I know many don't like long posts. Those who don't, please ignore my post. It was a key day I was waiting for 3 years, so may have got carried away).

From a weekly perspective, a drop from 2.3 to 2.2. Volume was high on 1 day when the sell on 2.2 happened. Otherwise playing usual games, mostly following Li macro play.

But something has changed, isn't it? A Trading Halt. BLM Approval.

For those playing with AZL for sometime, it will come as a big relief. I have been playing AZL for over 3 years, there have been many periods, sometimes very long, when I have not held AZL. Reason being if I don't like the price action, I try to minimise or get out. And AZL didn't have a good time. So after a long stay out, I got back in the big play which happened later towards last year. I did get out at around 5. I got a bit of flak for that, including from our old regular poster BR, but i explained my reason. Then I got back. Since then haven't got out, but few trades, as I do on all stocks. My current heads is 2.5, oppies 0.65. So I am down on both. But have held it, a very decent amount still, though I reduced some as I wrote last week.

So why did I keep on holding here? Potential. I felt AZL has great potential. On two fronts - Prairie and Big Sandy. Prairie became the flagship project in last 1 year or so as BLM approval was not there for Big Sandy. But if you listened to any of Paul's webinar, he always kept saying Big Sandy is equivalent, if not more potential than Prairie. Why was that?

Big Sandy, the amount of drilling that has happened, there is enough resource to mine for minimum 10+ years. That in itself is a big tick. Only 4% of land was drilled. So the potential was huge. It still is. Big Sandy, by itself can be a company maker. By itself it can create very significant value creation for holders. So what was lacking? BLM approval, to go to next stage. More drill, and then finally, license to produce. We have taken the first step, more drill.

Many may say, we already have a resource that can be mined for 10+ years, so why is this significant? Anyone in Li sector, even vaguely having knowledge around how atrocious US laws are for doing any mining, will understand the significance. Its not easy to get approval in US. Some tribes, some environment issue (INR), and you can be derailed for years, if not decades. So its a big deal to take a next step. It might be a small step. But now that step is in the right direction. That step is on a ladder which is going up.

So after struggling with BLM for close to 3 years, what did AZL do? It recognised that its not an easy thing. It recognised that it needs help. In last 6 months, it engaged a local, who could understand, and make others understand, what this is all about. We got NTEC on board. Initailly over 6 months back, more on an advisory role. But in March, things changed dramatically. Many may not have not understood the significance. After today's announcement, many will.

So what changed in March? NTEC literally became our partner. It was not about a consultant coming to help us. It was about an organisation who will work with us. NTEC for several months had done a lot of due diligence. Finally we signed in March. NTEC were to get some runs on board and they would paid with shares - not cash. So that they would want the share price to go up - then only they will make money. Not like taking cash and running away. Their success was dependent now on AZL success.

NTEC’s remuneration is via the issue of 424,242,424 AZL shares at 7.5 cents, which are subject to the achievement of various milestones including full
permitting of the Big Sandy Lithium Project and shareholder approval.

So we have seen the first step. More drilling to happen soon. But we have enough resource to go 10+ years. So drilling is a formality. It is not required greatly for success. Where the drilling will take us, is add to resource, and more importantly, get to next stage of license/production etc. It won't happen in a day, month or year - its a multi-year objective.

So what are NTEC milestones?

I have posted that below in the end - we are at Number 4 I think.


I have been reading the posts through out the day. Bot positive and reaction from our usual suspects. I think its fine, its best to get everyone's opinion. As we all know, there is no guarantee. The more one knows, possibly a better decision one can make for themselves. So I feel that part is fine.

Many feel this will not make any difference. Its possible. And we should be open to that idea. Many saying this approval doesn't mean much, there will be court case. Li industry is in doldrums, etc etc. All good points. But in stock market, a large amount of play happens on hope and potential. The potential can change, governed by macro conditions. Current Li macro conditions are not great. Some may say it will never be great. Possible. But if that is the play, it is about Li sector play. Not solely AZL play. Markets can change. And they change often. 2 years back, June 2022, i will never forget. Markets got smashed like anything. SP 500 on 3500. Many saying it will reach 2500 and will take years to recover. 2 years later we are 50% up and make new highs every week. Many don't know what's going to happen - its very difficult to predict. So whether in 2 years time Li sector will be in doldrums, I don't anyone can predict - we can all make our guesses, some will get it right, others wrong. No different from many other things where future is not certain in one direction.

So what will happen now? Volatility. It will take some time to settle. So we could have some swing. But Prairie is on the move. Next few months there can be big defining moments there - its coming, I can feel it.

Overall I feel, we are in much better position after this approval than before. I can understand why many may not think so. I play on probability, odds - as I know there is no certainity. The odds of doing much better has now gone up significantly.

But what is significant about NTEC agreement? They have said that they receive the shares at an equivalent price of 7.5c. They expect this to much higher, hence want to play with shares rather than cash. Why? Because they want to make money. Big money. They have shown confidence that they can achieve. And they have started well. They would like to at least get over 7.5c, to confirm that they don't make bad judgements. I have a feeling, they will get us there and beyond.

All this my opinion. I am holding. I may be biased. So please dyor. Please check your risk reward.



Here is the schedule/milestone for NTEC -