Given what we're going through $110+ odd million seems like a...

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Sammael

817 Posts.

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14/05/22

12:48

Post #: 61407394
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Originally posted by big2ben: ↑

A lot of posters seem to be very against the 51% scenario after CATH deal.
However, I have views of the opposite.
51% outcome is not bad at all, considering a quicker development cycle and lower capital expenditures (Zijin needs to contribute).
In addition, 51% NPV can support at least 10billion MC.
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If not, however, there might be other contingent liabilities, timing issues and opportunity costs that we may have ignored.
At least two issues need to be taken into consideration.
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African rumors claim that Zijin’s 33M USD is corrupt, based on the speculation that the fair value of such deals should be 110M USD or more.
In fact, I hate this rumor, not because of the corruption claim against Zijin, but because of the claim of the fair value.
1. Does this mean, even if we win legal proceedings, we have to pay 110M+ USD to acquire that 15%?
That is gonna be a lot of cash outflows I have to say.
Can we afford that, given our cash balance?
In 2021, the ANN states that part of the capital raising (75M AUD) will be used for negotiating that 15% and early work, but it seems to be not enough.
2. If such legal issue is pending and pending and CATH money is delayed again, when can we see our final products?
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I invest in AVZ because I want to make a profit; that’s it. However, the African rumors might also increase our costs and put us in a dilemma as well.
This is because if we want to show that we are clean and prove that Zijin is corrupt, we have to bear 110M USD costs.
Is this price really ideal? Let alone timing issues and other opportunity costs.

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Given what we're going through $110+ odd million seems like a small price to pay for increased ownership over 30 years. Bargain?
I'd hazard a guess that most holders would rather see a further cap raise (or one of many options) than bend over and let zijin have it through criminal conduct and fraud.

AVZ Price at posting: 78.0¢ Sentiment: Hold Disclosure: Held
34 Upvote

1 Great analysis

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