AVZ (ASX) Ann: Resources Roadhouse Explorers Presentation

Originally posted by setfire2thehive ↑

Pennywise and pound foolish selling today IMO.

3/4 offtake potentially iced this month. This materially changes the optic for avz as opposed to have the initial token offtake for partial amount. but that did however cause a large re-rate. With Tin offtakes and namely the spodumene offtakes it will now be a case of some 50-60% revenue stream being under contract. This then underpins the likelihood of obtain finance and given the tightish timeline that follows even if you were pessimistic and thought the timeline might slip, on all 3/4 probably not IMO. Additionally there's no context on exactly when they will occur and I think because they will land somewhat unexpected i would think the market will mark up AVZ appropriately.

When you look at company valuation i always lean back on statistical probability of achieving the stated NPV. AVZ has the opportunity to quick pull the levers on 2 of these items. The first being that the offtakes naturally IMO de-risk the project and increase the likelihood of finance being obtained. Secondly, the upgrade impacts to the economics are set to be pushed in favourable directions with the wedge drilling, a very low impact high economical return. This occurring in April with the sulfate falling similar timing.

I've been very vocal regarding timelines over the last 4 years here, but i think it's the biggest 3 months in AVZ's development. Market has likely priced a discount in on history repeating itself where management overpromise under-deliver, gut instinct tells me they actually get this one right.

Lithium sector improving immensely over the last 6 months, shoe is on the other foot in terms of negotiation whereby the miner has leverage over the customer in a lot of ways with scarcity of supply a genuine concern to meet chinese and moreover european EV demand.

Sentiment buy reflecting actions today, first time since AVZ was 6c.

SF2TH

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" Market has likely priced a discount in on history repeating itself where management overpromise under-deliver "

I couldnt agree more with your statement above ,, the market is yet to be convinced , it seems as though the GF off take was no where near enough ,, lets see what the month of March brings ,, we are so heavily discounted to our piers its laughable !!!!

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