OK antimatter - understand your reasoning. I think you are...

OK antimatter - understand your reasoning.

I think you are ignoring three important issues:

1.) The MARKET - this is a variable that is much harder to predict than AVZ's operational outlook. My experience is that when the market shits itself - could happen tomorrow or any time before June - the initial 6 to 12 months sees stocks being sold of irrespective of stock quality. AVZ was not immune to the recent market wobble, so it will not be immune to the next. In my view, a 2-3 day market decline that is recovered within a week or so is NOT a market correction. It has been the gentlest of "wobbles" - like a minute seismic ripple ahead of a potential earthquake. I do not KNOW that there is more to come, but based on history, based on globally high debt levels, based on monetary pumping since the beginning of Phase 1 of the GFC in 2008, based on no longer just TALK of rising interest rates but rates actually going UP, and global equity markets continuing to be at all time highs, I think the PROBABILITY of a serious market correction - ANY DAY NOW - ought to be rated as HIGH rather than LOW.

2.) The REAL world - in which SHIT happens! The scenario you describe might be the probable or likely one we all expect and hope for (no argument there), but in the REAL world, often things happen that we do not expect or even can not anticipate. Drill rigs can unexpectedly go kaput, flash flooding, landslides all sorts of things that are all in themselves unlikely, but not impossible, to happen. None of them change the "fundamentals" of AVZ, but any of them would cause DELAYS that would see cash flows depleting our balance sheet - while we see AVZ's share price drift lower and lower, day after day after day...

3.) FIDUCIARY DUTIES OF DIRECTORS - when signing off the financial accounts of the business, and unequivocally stating that AVZ will be able to pay its bills as and when they fall due for the next 12 months. Directors can take a cavalier attitude and just sign off on this - given that they too most likely believe that things will play out EXACTLY as you describe in your above post. Or thy can take their responsibilities towards AVZ shareholders really really seriously and do everything reasonably under their control to ensure that the business does not run into trouble. They know that if they don't and things turn to SHIT as per 1.) and 2.) above, there will be any number of shareholders who will cry wolf and hire any number of lawyers to sue the Directors' pants off.

So again, with ONLY $8m of cash in the bank by the end of 1Q 2018 or 2Q 2018 (though I prefer to exclude any assumptions on conversion of options) I think it is both prudent and necessary to raise capital sooner rather than later. Again, that is not making any assumption on what else may or may not transpire in the short term.

UNLESS, you are suggesting that AVZ Directors are already aware of further drilling results or intend to selectively offer stock at a steep discount to large institutional shareholders who then get to reap all the benefits of the surging share price that all of us have been waiting for - that would be NO NOs.

However, I do not think you or anyone else is suggesting that this is what they think is happening here. I am very often very critical of Directors, but I like to believe that on this occasion given what we know about historic cash flows and the balance sheet, AVZ Directors are merely prudent and act with the best interests of ALL CURRENT shareholders in mind.

DYOT