@JoeProThe angle of KoBold acquiring a partial stake in AVZ’s...

@JoePro

The angle of KoBold acquiring a partial stake in AVZ’s interest for $500 million is more likely than a $10 billion full buyout, given the financial, legal, and geopolitical realities.

It offers a balanced solution: KoBold gains access to a world-class lithium deposit without overextending financially, AVZ secures compensation and a path forward, and the DRC benefits from U.S. investment and potential security support.

The deal’s structure mirrors KoBold’s framework agreement with AVZ, which emphasizes “fair value” and a $1 billion investment to develop the southern portion of Manono.

However, the $500 million figure is speculative, and the final amount could vary depending on negotiations and arbitration outcomes.

The involvement of U.S. diplomatic leverage and the DRC’s desire to diversify partners strengthen the case for this structure, but AVZ shareholders may push for a higher valuation, and Chinese stakeholders (e.g., CATH, Zijin) could complicate matters.

The $20 million break fee to CATH seems manageable, but it’s a reminder of the complex web of interests involved.

The proposed angle is a credible and pragmatic scenario, particularly given KoBold’s financial constraints, the DRC’s geopolitical priorities, and AVZ’s need for a resolution. It’s not without risks—legal disputes, valuation disagreements, and regulatory hurdles could pose challenges—but it aligns well with the current dynamics of the Manono project and U.S.-DRC relations.

Time will tell!