I have held my tongue (fingers, I guess, what types on keyboard) about this deal, while I made my mind up about this.
However, it's clear that RCF is pushing AVL together with TMT, and favoring AVL.
I have maintained, and continue to maintain, that TMT was a genuine developer. They have published a DFS within 5 years of listing, underpinned by a Reserve and Resource base of fresher, better, less compromised (metallurgically) ore than AVL, who dawdled for 18 years under the stewardship of old mate Vince, to a crapper DFS with a dumber development pathway. I held through this all, and maybe should have taken profits at 45c here, because I saw TMT as the most technically astute and realistic and commercially focused company, whereas AVL was a lifetimer outfit helmed by boomers and sinceured lazy puffins with dumb ideas to cart ore to Geraldton.
AVL's development ineptitude is exemplified by their inability to secure water supply except via a worthless MOU with Westgold and a furphilicious plan to pipe water from Burnakura or Paddy's Flat. Meanwhile, TMT had a water exploration borefield and was doing water licenses and proving up water resources to underpin ~20 years of mining. One, clowns. The other, apparently not clowns.
AVL has batter technology, and got a MMI grant. Sure, a benefit. But their vertical integration plan is out of synch. Look here at Vital Metals' Nechalago caper where VML built a field of dreams mine for a downstream processor. They made product, but couldn't sell it because the processor (which was reliant on VML) wasn't ready. SO now both parties ar FUBARed.
I see the same thing with AVL's MMI grant - an electrolyte and battery factory in search of a electrolyte and primary AMV/pentoxide feedstock. Perhaps the brain geniuses at RCF think they can fund it through this mismatch in supply and battery/electrolyte factory completion, and good luck to them - but what the hell are Ian and the guys thinking tying TMT's fate to that malarkey? Let AVL flounder and die on its own dumb-ass illogic.
AVL raised $15M merely to secure the government grant because, in case everyone was asleep, the government realises AVL has no plan, the emperor has no clothes, and the Albanese government is under pressure to justify the Liberal Government pork barrel funds (MMI, Future Energies, and NAIF) which were thrown out like chum before the last election. Kalium Lakes torched $240M of government money, and NAIF will get $80M back assuming the Deed of Company Arrangement goes through. The taxpayer lost on KLL's fantasy thinking.
Meanwhile, BCI at Mardie is under water on their idiotic venture, which once again, was funded by NAID right before an election. Nothing suss! NAIF has to make a decision to double down, or let BCI's Mardie Salt fail hard and waste $600M. I remind everyone, the government funded 60% of Mardie. It's an absolute joke.
So NAIF is on the hook at **anintha for TMT. But that's based on TMT's DFS and mine plan. If the new merged company changes the mine plan from TMT's process-on-site, to AVL's process in Geraldton, an TMT assure shareholders that NAIF will back in $120M or whatever it is, to get the camp, pipeline and whatever else they agreed to fund?
Also, remember that TMT's plan was 3Mtpa. AVL's was 3MTpa. TMT's mining lease application and mining proposal was for that mine plan as envisaged by the DFs. AVL did the same.
SO what's RCF's grand galaxy brain idea? 3Mtpa. Because re0permitting both operations is insanity, having gone all the way through enviro and heritage and everything, you're kinda stuck at 3Mtpa.
If you double the amount of sheets of toilet paper on issue (and TMT gets 40% of the poo tickets under the merger) you're bound by the mining proposal rate of 3Mtpa. Which means you only ever make...8ktpa pentoxide. Same costs. Same profits. Twice as many butt wipe pieces of shares to split the winnings with, after dilution, and assuming the merged entity gets the MMI grant, builds a risky technology factory for batteries, gets the mine production aligned perfectly with the factory, and then also gets NAIF to grit its teeth and fund it now you've cut the nett profitability in half and added in all the extra risk.
From what I can see, TMT and AVL haven't even discussed this in their tragic merger presentation. Both boards have just listened to one major shareholder and agreed, like sock puppets, to the merger.
In a way, it's fair enough. Whomsoever agrees to keep tipping money in gets to decide what these companies do. If no one has an alternative to RCF's money, then RCF gets to decide. The fact both companies' boards are just RCF tools is by now not a shock.
So be it.
SO, if I was going to hang around to try to get out of this stock on the day I would get my 12 AVL poo tickets, I would merely sell them in the morning, but it won't be worth the implied 32.5c AVL prices suggest right now (because of course AVL's price is being propped up).
Anyway, bitter and twisted? Yep. Best of luck if you hold.
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