Market related, not geology

Out of respect for@salpetie's good point, I thought it was worthwhile starting a new thread that deals with the market side of AZY, rather than the geology side.

When I bought in to AZY and was new to the mining sector, I was gobbling up all the geology stuff I could read and still find it interesting and useful. So I enjoy reading Salpetie's posts. By the same logic, it's good to have a separate place for market-related thoughts.

In particular, I was taken by@Scribbles07 comment that AZY is a dud stock. I don't blame him for thinking that way, even if it is strange that he doesn't hold the stock yet thinks it worth commenting on. (Note to self: we need a pronoun for posters whose gender is unknown!). It's that point that I think is worth some comment. Mostly for prospective buyers who – as I did two years ago – are thinking of buying in on the belief that AZY is going to go gangbusters...soon!

My general position is that AZY is shaping up to be a good investment one day, but that it will take a long time for the share price to reflect its potential. In short, don't expect the price to rise any time soon. Actually, I think it will go back to the 3s, in anticipation of, or at, the next cap raise, which has to come unless the company sells part of its JV lands or takes on debt. My reasoning is that to make a cap raise attractive, it would have to be priced at a substantial discount to the market price. They got away with only a tiny discount at the last cap raise, but I think punters are sufficiently burned and sceptical now that they will need a much better incentive to buy.

Other than the cap raise trigger for a share price drop, I think many things will have to happen before a lift in the share price – certainly before any serious one. Those things are essential in order to price the stock fairly. (I'm not talking about the "fill yer boots up" rubbish that will prompt little spikes. Hands up all those who are glad they bought in above 5c on the back of that beauty).

The market – people – needs to have some understanding about whether AZY is going to build a mine or truck their rocks to Telfer. That requires the completion of the scoping study (end of June?) and then the PFS (end of October?). Then time to make a decision on which path to take. Then they need money to implement that decision – a cap raise. Then (assuming they get the money) they need to actually implement it.

All this takes time. I can't see how or why AZY's share price would go up until those details are in. Of course there's the possibility of wildcards like getting a takeover offer, or stumbling on the biggest copper deposit in the world. Things like that may send the share price into orbit. I'm talking about normal operations based on the current "known knowns".

So, all in all, I think AZY has great potential. But don't buy in on the basis that it's going to be any time soon.