Im bullish in general because they're getting about 6 rigs in total by next month (aggressive drilling / potentially onto something significant) + the potential scale of this project (potentially very large / potentially 100mt+)
Companies with 6 rigs are the likes of PMT - very bullish indicator.
Bearish because the valuation is getting ahead of itself / getting too high based on a peer to peer comparison with other players. My guess is they're trading at a premium for various reasons including: SQM being a cornerstone investor (plus SQM indicating that they believe this could be a significant 100mt+ deposit), large scale project potential (not common + projects with a single large deposit are always valued higher), WA premium, hype etc.
Being overvalued or trading at a premium in the heated lithium space isnt uncommon. Just look at WC8. Fully diluted WC8 has a market cap of $150M at 11c and WC8 really has nothing to show for it other than 'potential' (wont get in to their 'story' here). It seems that as long as there is great potential, the market doesn't care about being overvalued or trading at a premium to peers (in AZS case the assays would need to confirm the 'great potential' continues to exist).
You mention the MC places AZS alongside the likes of GL1 and ahead of DLI
The question is, does AZS have more potential than the likes of GL1 (~32mt @ Manna / not the best strip ratio etc) & DLI?
We will soon find out - it is certainly a possibility (although agreed that for the current stage, the SP seems to really be getting ahead of itself)
AZS pegs have a gentle dip - so the early indicators are quite good
Side note: Theres also the nickel that most people are discounting / dont care about. Currently 6mt, scoping study underway and they will attempt to up it to 10mt with further drilling (from previous research, they've been in talks with other majors about the nickel, but they imply the resource needs to be a little bigger, ie 10mt).
Anything less than high grades across decent thickness is going to see an almighty crash back to earth here.
Agreed. This is the major risk from here - probably the main reason i decided to free carry / de-risk at these levels. It also means i have powder ready incase the results are decent but it gets sold down, then ill keep myself open to buying opportunities.
Widths im not too concerned about - from the early visuals we can see that there's potentially a 50m intercept (or 30m, depending on the grade in the pink areas). We've also seen that AZS has hit 200m in hole 198 - that was in a completely different location though, and was not mineralized (where they were drilling for nickel). So the potential for very wide hits exists.
I suspect they are currently sitting on 6-8 holes. Which i feel more comfortable about (initially was worried that the assays would only include a few of the early holes).
Time will tell if Tony has been giving honest indicators (in most recent presentations he has been indicating that the grades should be high based on the amount of spod visually seen - but we know its his job to talk in a bullish tone - so keeping cautious).
I would update my sentiment to hold, but i dont want to be changing my sentiment as the share price moves around. In the future ill probably change my sentiment to 'none' to avoid this issue
AZS Price at posting:
62.5¢ Sentiment: Buy Disclosure: Held
