Ann: AVZ to increase equity stake in Manono Project to 75%, page-208

First 208 Last

Share
Profile

Follow
sachz

11,417 Posts.

1588

22/09/20

11:39

Post #: 47529318
Share

Originally posted by Ubique13: ↑

Exciting to see AVZ picking up a greater proportion of the project.

Waiting on the sidelines for an entry at 1.5c but I don't see it getting there for another 6 months or so.

Key risks to AVZ:

1. High valuation - I don't think the project at its current stage can justify this market cap.

2. High CAPEX - near impossible to finance over half a billion USD in this environment - I assume a spod concentrate only scenario in my analysis as I think this is realistically how it will be developed in the end if the stars fall into alignment. IMO sulphate is wishful thinking and a hail mary strategy from management as it is apparent that selling spod alone isn't economical for the project due to the combination of high CAPEX & OPEX.

3. High OPEX - $371/t is on the high end and this is already at 4.5Mtpa scale. Doubt it can be reduced much more with further scale. Even if this is scaled to say 10Mtpa - who will purchase all of that spod while the market is currently in oversupply?

See comparison to AVZ's closest African peer below which quite clearly demonstrates the disadvantages to AVZ's project and the lack of upside at current prices:

*This is an old screenshot, need to add an additional $20M to the above for AVZ's CAPEX to acquire the total 75% of the project.

The problems noted above can be condensed down to the following question: why would someone pay $4 for AVZ's lithium when they could buy it for $1 elsewhere? And this ignores the multitude of additional risks that come with this project that have been discussed to death.

As I say, there is value here but not at these prices. I will wait on the sidelines accordingly.

Expand

great analysis @Ubique13 but i think 1.5c might be a bit of a stretch.

i've got my AVZ SP buy targets at 2.0c..... IMO

but, mainly due to the extremely high number of shares on offer offset by the high number of posts here.

AVZ Price at posting: 6.3¢ Sentiment: Sell Disclosure: Held
6 Upvote

0 Great analysis

Reply

Top Stories

COD

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

NTI

Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

WCN

White Cliff jumps 24% on 'bonanza grade' copper rock chips at Rae project, Canada

BUX

Buxton projects new graphite province discovery at WA Narryer play

ACW

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Week 40 Wrap: China's nonsensical stimmy hype wanes (shocking!); HotCopper's picks; oil & inflation

BCI

BCI reaches close of funding facility for salt-first part of Mardie project

RCE

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

SLS

Solstice Minerals to ramp up drilling campaign at Yarri Gold Project

CKA

Cokal upgrades infrastructure for BBM ramp-up in Indonesia

There are more pages in this discussion • 105 more messages in this thread...

First 208 Last

Add AVZ (ASX) to my watchlist

Ann: AVZ to increase equity stake in Manono Project to 75%, page-208

Top Stories

Coda Minerals (ASX:COD) enters rights issue to further exploration in South Australia

Neurotech knocked back by FDA as agency declares target condition not rare enough for special status

White Cliff jumps 24% on 'bonanza grade' copper rock chips at Rae project, Canada

Buxton projects new graphite province discovery at WA Narryer play

Actinogen Medical ramps up Alzheimer’s treatment trials, targeting fast-track global approvals

Week 40 Wrap: China's nonsensical stimmy hype wanes (shocking!); HotCopper's picks; oil & inflation

BCI reaches close of funding facility for salt-first part of Mardie project

Recce eyes Indonesia for novel anti-infective as Indo-Aus ties grow stronger

Solstice Minerals to ramp up drilling campaign at Yarri Gold Project

Cokal upgrades infrastructure for BBM ramp-up in Indonesia

Featured News