Look, this debate is going around in circles, but here is some commentary:
Your post:
My response to the following comments of yours in Italica and bold follow in your post:
1. "I do think the deal is a bad deal."
My response: Sitting on the fence, but what is the alternative now, as clearly to this deal either the Europeans were not interested, didn't want to bid at this time until a transport option was opened up or under-bidded. Which one it is don't know, but the Chinese are known for getting in early, whilst the Europeans and Americans sit on their laurels and complain. On the deal I am sitting on the fence, but have indicated I would have preferred a non-Chinese player. But what is the alternative now, and will it be different the next time? Also is their a benefit in having Tianyi associated with CATL for AVZ?
2. "It seems to lock out the non-chinese and so to reduce the future value of AVZ shares compared to what they could have been without it and if the non-chinese hadn't been excluded. Also it seems like Nigel has struck it prematurely."
My response: As per my earlier post:
It is a nice discussion to have, but IMO suspect there will not be another proposal from another entity prior to end January 2019, or before the 3 January SH meeting. As SHs, simply need to decide whether you want Tianyi onboard or not by voting. My gut feel is it is a done deal already regardless of what I think, and what I am thinking is still why the extent of this CR raise at this time given the funds we already have - $5.7 million at the end of last quarter. The benefit I see from the deal is a CATL related/affiliated party coming into the books and one we could have future Offtake Agreements with, but the cost being more Chinese control and what that means in a Chinese collusion context on SP (were that to occur) and the fact we don't have a major non-Chinese battery or hydroxide producer on the registry.
3. "We were supposed to be funded to DFS.I thought that NF has done a good deal when he'd managed to get an extra 5% from Dathomir quite some time ago - perhaps his first good deal - but that deal until the Dathomir 5% were paid for wasn't really complete and NF has managed to get that deal (paying for Dathomir's 5% which he had plenty of time left to do - tangled up in this one along with an offtake that we haven't seen the price of."
Agree, but now what is the alternative? Also if the purpose is to get the additional equity so that AVZ can use it in securing Equity for Offtake Agreements that is a good thing. So why the hurry to get the extra equity done and dusted now is the better question?
Also as per my earlier post - I think management need to rein in their pay packets or have performance shares better aligned to metrics as well. But that is another discussion.
4. "I think Dathomir has under delivered or just not delivered all the way so far in its relationship with AVZ. The road to manono they were going to facilitate isn't ready. Another 6 months it seems to before even the unsealed stage is done.
My response: I suspect the entities underlying Dathomir is Chinese. In any event, the key question is the infrastructure been developed for AVZ's use is going to be done by the Chinese. Therefore the production start date here is going to be influenced/regulated by the Chinese in completing those works. This IMO is how AVZ is also been controlled by the Chinese and potentially why it is difficult to get European and American players onboard - they see it as ultimately a Chinese owned project purely because of what is happening in the background. I would just like some non-Chinese players onboard, and so the better question is why haven't they come onboard and has AVZ in the past spoken to them and indeed what actual level of interest did they actually express. Lots of weasel words by AVZ in the past IMO when they talk about non-Chinese interactions but it is never clear whether the discussion was a friendly chat over a beer, or a more detailed and lengthy discussion where documentation was exchanged and written proposals received by AVZ
Let's see if JC can do better in getting a non-Chinese player onboard, and work with DRC officials ensure that infrastructure is in place (by the Chinese) to facilitate a 2022 start production date. Or at least work out in the DFS where minimum transport spends by AVZ, if needed, can accelerate a transport solution outcome been in place by early 2022.
5. I'd like to know who is behind Dathomir - I'd like the benefificial owner - who AVZ is dealing with when they talk to Dathomir to be public knowledge because I think it would be better for the share price and for the confidence of non chinese to have more transparency.
My response - does it matter given the comment above. Suspect it is Chinese
6. As I understand AVZ can trace the beneficial ownership of Dathomir if it wants to - it might cost it about $3847 (from memory) to do that - but I think that at this stage that would be money well spent."
My response: Suspect AVZ already know who is behind Dathomir
7. "My intent in talking about the deal is to depeen understanding about the deal by shareholders who are going to vote on it. I was encouraged that there were sufficient shareholders interested in getting value for themselves to have delivered a first strike on the remuneration report."
My response: Cash burn here has been pretty significant each quarter. So a better question is when would hypothetically the next raise be required if this one falls through? Also how will Tianyi/CATL react if this one falls through? You do realise the concept of 'saving face' in Chinese and what may now happen if the deal falls through.
The better question is who else was approached by AVZ for funding, because I suspect the exclusivity provisions you have brought up in part is to stop those other discussions that were happening, if they were happening, from continuing and prevent those parties from lodging an alternate bid after the event. In part that is why you see such clauses in agreements btw.
In other words, I suspect the deal is a formality IMO, and the repurcussions of not proceeding might be a bit more significant than what you are assuming. AVZ has feathered its nest now, and now has to continue to wine and dine this new bride or the likely divorce settlement is going to cost SHs here an arm and a leg. A jilted lover is worse than a hungry and angry barking dog at the back door. For SH's it's a question of whether you consider it a marriage of paradise, a marriage of convenience or disaster unfolding and make your own decision in that regard.
8. "With more transparency and better management AVZ shares could be worth a lot more. But it will take smarter behavior from the shareholder base with respect to looking after their own interests to realise the potential value in their shares. In my opinion."
My respose: Agree, but AVZ has built its nest here and found its mate. Now been viewed as a Chinese play - refer 4 and 7 - it may be difficult to find a new mate (European for example) so SP will be adversely impacted by that. SP may recalibrate later on, i.e. where SP could head with Chinese and Eurpoean interests on board as against solely having Chinese interests onboard - but right now it is what it is (just like when I go to the pub and occassionally their is no VB at that yuppie pub, but if I bought the pub it certainly would have VB). The better question becomes, what happens if SH vote the deal down? Refer question 1.
All IMO and this is my final response as whilst I understand your concerns the outcome is what it is now - refer question 7. I can't see the deal falling through either given the above. If you disagree with what AVZ is doing it becomes a question of timing your exit. I am still sitting on the fence.
Anyway after writing this I think I am staring to sober up LOL
All IMO
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