I posted a while ago that I didn't think Felix was on our side, or if he was, didn't care enough to act to sort this mess out and show others he was serious on stamping out corruption, and this latest action by AVZ illustrates that too. My previous views are here -
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This would almost be in production now if this mess had not occurred last May 2022. Now this mess simply benefits existing producers and those entering production shortly as the supply demand imbalance will not be addressed in the near term, meaning spodumene prices will continue to remain well above what most put in to their respective DFSs.
Which takes me to this point - AVZ's place in the development queue has been taken by others, and if this issue is not resolved in the near term, I doubt this will get to production this side of 2028 - 2030, and the DRC now needs to work out whether it wants to be a battery hub or not.
My next point is that if you were an
serious exploration play to day looking for opportunity, there is no way on earth now you would commit any funds to exploring in the DRC which means that the DRC is going to have to rely on its own exploration endeavors which it is known they are hopeless at - hence why AVZ got exploration permit in the first place because Comminere even admitted they weren't good explorers in that interview their head did - or simply roll over and let China dictate its terms. At the end of the day Manono is a mine, but someone needs to pay for the transport system developments and I can't see western countries/world bank putting up funds with the stench of corruption hanging over mineral ownerships
As I said in the past, all this could go away if Felix had issued a Mining Lease, but now it is obvious that the rotting fish head in the DRC is all the way to the top. How DRC deals with this development from AVZ will determine whether DRC is simply a playground for China or not, because I doubt any more exploration dollars by anyone else will go there. At the end of the day who would to explore in the DRC when there is the threat if you fond something it will be taken of you.
Having said that, AVZ, and it has been my opinion for some time, should have cut a deal when it was clear that production and development timeframes would be blown for a 2025 start up date, and there is no way on earth IMO this will get to mining this side of 2025 even if a ML is issued tomorrow (and that is the biggest issue now). Now all sides have dug in, so it is really a case for DRC to deal with if they want this to get to mining anytime soon, because court actions will take time, and probably a year or two or longer.
The longer this drags out the timeframe to production moves further and further down the road, and others continue to take AVZ's place in the development queue. The other key threat is what is going on in Quebec because some of the hits by emerging exploration plays there are pretty good, and if any of those get to DFS well Manono development gets pushed even further down the track. A lot of the developments in Quebec have happened post May 2022 by the way
A corruption mess this has become, and the rotting fish head is all the way to the top, IMO. You wouldn't take the President of the DRC to court if you didn't think he was part of the problem, end of sytory.
This Ann is not good news and shouldn't be viewed as a positive- unless DRC changes its way, or a solution is reached that doesn't involve the courts, we are talking years here, and I suspect AVZ will be delisted from the ASX next year unless DRC comes to teh party or AVZ strikes a deal.
As a final point, the information is out there now, and I am also now wondering whether AVZ should continue to remain in suspension?? (Yes it is a question). Yes relisting now will have consequences for the SP, but been delisted probably does to.
All IMO IMO
(20min delay)