I think it's quite evident now, since we have read all the research many times.
JRO are broke and making unsustainable losses. Approx ten (10) banks in China have frozen their accounts. The CEO has resigned, and other executives have also had their personal accounts frozen.
JRO will be in no position to buy ANY Lithium at all from AJM, and it's just a matter of time before this information is officially released.
The fear is that if they go into administration, their assets will be frozen, including their ~15% of shares in AJM, which would then be sold to another entity.
JRO have clearly been led by a group of overly greedy Chinese investment men, and I would expect that many of them have done what most other rich Chinese executives have done over the past couple of years, and siphoned much of their wealth off-shore (with many of these executives and their companies hiding their wealth in Australian real estate, and in tax free havens).
The biggest question for AJM shareholders now, and one they should be IMMEDIATELY putting the AJM board, is... "are the board aware of what is going on with their biggest shareholder, but more importantly, WHAT contingency plans do they have in place when JRO collapse ???".
When this is announced, the AJM share price will collapse for a period of time.
If the AJM directors are smart, they will have been spending nearly ALL their time creating relationships with other potential off-take companies, and with financiers, otherwise this could go South very quickly with the collapse of JRO.
Does ANYONE know what the AJM board are doing, other than crossing their fingers and hoping.
One possible scenario that will play out is as follows. JRO collapses. AJM cannot pay down debt, and so a bit global Lithium player, like the one who is partnering with Kidman Resources, comes in and buys out AJM for a song, with a very low ball opportunistic bid that has to be accepted.
AJM should never have got into bed with JRO, and just shows how weak and naive this board is. They also funded their development at 15%, whereas Pilbara and most others got 10% to 12% finance, again showing how weak the AJM board is in it's negotiations. I just hope they are also not blind to the unfolding JRO debacle.
Good luck everyone, because other than news of first production, I can't see anything good on the immediate horizon here, at least, not while they have the collapsing and dubious JRO as major shareholders.
I'm expecting this to retrace to 25 cents or less at some stage on the JRO news release.
Gw
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.... furthermore Citi would not be sitting on their hands at this point either - not only do they have a vested interest in AJM, but they were ‘appointed’ to actually do a job and allow the BoD get on with the day to day operations !
(20min delay)