Well I wouldn't advise management to use Nemaska as a blue print. They did get a debt deal but they also did a CR which literally doubled SOI.
So from that perspective I guess it depends on what management (and shareholders) see as more beneficial. Doing a hugely diluting CR or doing a JV which basically ends you at the same point but possibly gets you the benefit of a partner with in country experience building and operating a mine.
I don't really want to go into the huge debate again and not the point of this comment but in my opinion AVZ still makes most sense with a concentrator and chem plant so at a minimum for AVZ to be operating on any sort of scale you're probably talking 5Mt + plant which has to be pushing up towards $1bn in costs.
So in my opinion they are going to need some combo of debt, pre-payments, partial asset sale (ala SDV), JV etc. The complete lack of guidance on this I think is the problem at this point.
But the company is just stuck in a bit of a negative feedback loop. Everyone knows resource is huge, but JORC is going to take time, yet despite everyone knowing this management probably need at least an initial JORC to push negotiations along but in the mean time the share price is getting lower and lower which feeds into discussion partners position of strength and a harder bargaining position for AVZ management.
I really can't tell at this point how this plays out and more crucially even if a result occurs if it will adequately compensate holders.
AVZ Price at posting:
13.0¢ Sentiment: Hold Disclosure: Not Held
