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Ka-ching ... AVZ Minerals chairman Klaus Eckhof sold down 25m AVZ shares.
AVZ chairman Klaus Eckhof speaks out about his 25m share sell-down
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13 hours ago |
Rachel Williamson
AVZ Minerals chairman Klaus Eckhof says there’s no secret behind his big share sell-down two weeks ago: he wanted to take a profit.
Mr Eckhof caused outrage among some AVZ shareholders last week after selling more than a quarter of his stake — just before the explorer unveiled what could be
the world’s largest lithium deposit in the Democratic Republic of Congo.
AVZ’s share price has since lost 31 per cent to reach 10.5c — though the shares are up spectacularly for the year.
After spending five years in the doldrums around 1c, AVZ shares have traded as high as 17.5c this year.
Mr Eckhof’s sale of 25 million AVZ shares at an average of 15.5c meant he ceased to be a substantial shareholder.
Mr Eckhof told * it was simply time to take some profits after leading AVZ for four years.
“If the share price is up 3000 per cent, why wouldn’t you take some profit at some point?” he said.
It was also his last chance to sell before the pre-annual report trading blackout period for directors, he said.
“I only had three days [to sell] because on the Friday we [directors] couldn’t sell any more shares.”
The company’s announcement of a big lithium find on the following Monday was within a four-week black-out period during which directors are not supposed to trade shares according to ASX rules.
Why, then, did AVZ’s share price fall 31 per cent this week after the company announced “the longest pegmatite intercept ever reported” at its Manono Lithium Project in the Congo? (Pegmatite is a primary source of lithium).
Mr Eckhof says the fall was due largely to day-traders — who he suspects now make up most of the company’s share register — taking profits ahead of a quiet period before the next drilling results.
AVZ’s shares began their dramatic climb at the end of July when drilling results started to arrive for its Congo Manono lithium project.
AVZ has so far found lithium and tin at high volumes in its at depths between 235-251 metres at the site.
Even after this week’s share price falls, AVZ has a market cap of $180 million — a high value for an explorer without a mine.
Mr Eckhof said AVZ would enter drilling contracts in the next few weeks and start developing a mine early next year.
Funding will come from $18 million in options that can be exercised from October 12, he said.
However if a buyer, such as “one of the bigger Chinese miners” comes knocking, AVZ won’t turn it down.
In August AVZ raised $15 million from investors, and $13 million from China’s Huayou Cobalt Group.
