1.) Under promise & over deliver on operational milestones. It seems that AVZ needs to clear the decks and restate all historically stated timelines that were too optimistic and provide the market with new timelines that management are confident they can meet or possibly even beat. While this could lead to one more drastic downward share price correction, going forward, it would lead to more sensible share price movements on the release of new positive information. If instead the company continues to drip-feed news about delays together with already priced-in good news about resource quality, the share price will continue to drift [imho].
Just to illustrate this:
On 30th April, AVZ announced to the market :
• On track for initial JORC resource calculation by end of June quarter 2018.
AVZ’s Executive Chairman Klaus Eckhof commented “We are delighted with the progress of the resource drilling at Manono with four rigs now fully operational 24/7. With our resource consultants having visited site for independent reviews of the drilling program we are well placed to complete resource calculations as planned.”
Today, on 4th June, AVZ announced to the market:
• Company to continue drilling during June to maximise the initial JORC mineral resource to be completed in July.
How can anyone expect the share price to move up on this news?
2.) Offer meaningful incentives to both senior executives as well as consultants and contractors based on OPERATIONAL milestones being met [I will continue to argue for this until the day that I die] .
3.) AVOID providing senior executives, consultants and contractors with incentives based on SHORT-TERM share price targets. Many experienced investors consider such incentives TOXIC.
4.) AVOID describing past trading halts due to different interpretations about "nuances" in continuous disclosure obligations. Instead, ensure all share price sensitive information AND all information that may be PERCEIVED to be share price sensitive, is only ever first released via ASX announcements. This is BLACK and WHITE - there is no shade of grey in interpreting this rule.
I am certain that - all else being equal - if the above were implemented, after one or two reporting periods the AVZ share price would respond in a more positive way to real positive news and shareholder TRUST would gradually be restored.
AVZ Price at posting:
13.8¢ Sentiment: Sell Disclosure: Held
