Ok so lets start by looking at the facs as we know it:
- AVZ owns 75% of Manoro;
- Manoro is the largest Lithium deposit in the world;
- Lithium is the hottest new mineral on earth;
- Shares start going up go well above $1- $1.30;
- 4% of the company is shorted and shares start dropping;
- ML Announcement imminent; then
- Zijin starts fight over share sale;
- Zijin seeks arbitration.
- Trading halt/suspension
So now let's look at Zijin strategy-
if Zijin thinks its claim is good, it will come out on top in the Arbitration courts, nothing left to do but AVZ may commence legal action, that is factored into Zijin strategy.
But if it knew it was spurious as AVZ says, and likely is, then the charade of seeking arbitration, and later if it loses, then initiating further litigation in court it will achieve the desired effect of what the shorting has done and legal action will do:
- create a level of uncertainty in current and future shareholders;
- lower the share price further; and
- allow an aggressive Zijin to buy a controlling interest.
This is exactly the strategic advice I would give if I was advising Zinjin.
If I'm right the next chapter to this story will be Zijin loses in Arbitration and the commences litigation at great cost and time to effect the above desired uncertainty.
I genuinely hope I am wrong, and please note my thought above are only an observation, not a detailed advice on prospects.
One final thought and only in my opinion. Regarding share price, it may flutter up and down but ultimately it's the biggest and best lithium mine in the world and no one is going to walk away, there is no better or bigger option. The litigation, news of a court action, coupled with this giant of a mine and its resources and earning potential may have the opposite effect and send the share price skyward.
