Thanks, Amovatio.
The basis of a just solution for this mess is Datcom JV agreement and DRC mining code.
The notification by MoP regarding ownership issue gives me confidence that DRC wants to sort this out according to Datcom JV agreement. The JV agreement specifies that no transfer of shareholding prior to ML. The MoP clearly states in the notification that AVZ has 60% (not 75%), Commiere will have 25% (cancelling any ownership transfer by them and MoP as it was against JV agreement) and Dathomir will have 15%. The transfer of 60% to AVZ by Dathomir is against JV agreement, but the govt provided a waiver because AVZ carried out genuine work. But they didn't allow the waiver for the further transfer of 15%, which makes sense. If DRC wants to kick AVZ out, they could have cited the violation of JV agreement as the main reason. The inference is that DRC wants a just solution to a very complicated issue and everything should be done as per JV agreement and the mining code.
The two decrees by MoM (and announced by AVZ) point to a solution based on mining code. My take on this announcement:
- The MoM decree announced by AVZ today and the ownership notification by MoP are the results of 9months negotiations between all the parties.
- The splitting of the 13359 is against the mining code, but DRC wants to follow their mining code and sort things out legally.
- The MoM decree issued in April 2022 by splitting the tenement was against the mining code, so they rescinded it.
- I expect a new decree soon from MoM issuing ML to all of 13359, in accordance with mining code.
- I think the AVZ response of consulting independent legal advisers is to make sure that the content in the decree is in line with the agreement with all the stake holders and BOD's understanding.
- MoM rescinded the wrong decree for ML to issue a new and a correct one.
The decree also mentions about disagreements between JV partners which DRC thinks is the main reason for the delay. I believe there may be a broad agreement that this should not happen in the future and only JV partners with good relationship remains in the JV. Some actors may not like this, so there are social media rumours. If AVZ remains in the JV, then shareholdings from others will be bought out. We were expecting announcement dominoes to come, which I think will be:
- Issue of new decree from MoM very soon and subsequent ML registration
- AVZ to buy out Comminere's 15% (part cash and part scrip)
- AVZ to transfer 9% to CATH
- CATH could buy Dathomir share 15%), if not then AVZ could buy
- The final ownership structure (DRC - 10%, CATH - 9% or 24%, AVZ - 66% or 81%)
- DFS for 10M tonne
I believe, we will have no more extensions.
If things turn out the way as mentioned above and AVZ comes out of suspension this month, AVZ will regain ASX300 and ASX200 memberships in April. In that case, there will be not much selling pressure from the institutions. There will be some retail selling. I am a very frustrated investor and really in need of some money, but I am not going to sell in the first week, as all the negatives are gone.
I could be wrong just like anyone else in this forum. Expect the unexpected with AVZ. :-
I and all the AVZ shareholders suffered enough. It is not a crime to dream.
