AVZ 0.00% 78.0¢ avz minerals limited

As I am not a chartist, and haven't a clue, here is my views for...

  1. 9,105 Posts.
    lightbulb Created with Sketch. 17786
    As I am not a chartist, and haven't a clue, here is my views for nothing more than a guess.
    Open - 5.2c
    Low of day - 4.7c
    Close - 5.2c

    What happens after Monday in terms of SP (3 - 6 months) is how NF responds (and DRC govt responds) thereatfer given the fact they want this project in production in the next few years (noting IMO equity for Offtake Agreements are likely to also be of the Table in a FIRB context, but prepayments are fine).

    AVZ Potential Outcomes
    1. China sticks middle finger to Australia and a number of prepayments (Ofttakes) are signed with AVZ - positive for AVZ. Impact positive, including continued AVZ control over the project.
    2. Europe/USA comes onboard - positive for AVZ btw, but given Europe and USA hasn't really come on board for a number of plays, including Australian plays, and that the final product even for the former KDR is destined for China, not really clear here how that helps spodumene prices for the others. What will help prices, and reduce China's influence on prices across EV battery mineral needs, is Europe/USA developing their own gigafactories in their own countries. Question for yourselves - what % of future gigafactory builds are currently happening outside China?.
    3. DRC states if unlikely AVZ can get this to mining, given what the government has done here, a new player be entered into Dathcom (i.e the JV entity holding Manono where AVZ has a 65% stake) to provide funding and AVZ stake in project reduces. Impact - unknown to AVZ, but obviously AVZ has reduced exposure and operation on teh project under this scenario.
    4. AVZ relists on a different stock exchange, or a really out there thought been Dathcom lists on another stock exchange offering a 30% stake to retail for that listing. At the end of the day AVZ owns the surrounding tenements at 100% but not Manono - Manono is in Dathcom (@Royal_Viking interested in your thoughts here).

    For Australian exploration and production plays in critical minerals
    1. Not clear if the decision is about China or all foreign investment.
    2. If it is about China, I can see some issues emerging, and certainly a sovereign risk issue has arisen short term becoming longer term if there is no Oz government plan here.
    3. Unknown Australian Government strategy around downstream processing in Australia in relation to those minerals deemed critical minerals (i.e. lithium ore to spodumene to lithium chemicals to batteries to EVs). If you are knocking back small investments of this type - refer NTU as rare earths also identified as a strategic mineral - what is actually the plan here Mr Treasurer for what you plan to do and incentivise use of 'critical minerals' in Australia?
    4. Companies relying on chinese investment to aid Australian-based exploration and/or the road to production, in critical minerals, will be nervous. Note: AVZ's project is not in Australia btw so it will end up been developed, just a question of the role AVZ has in it.

    In other words, SP for AVZ has short term uncertainty until AVZ provides a way forward and/or the DRC govt steps in btw.

    For Australian plays, uncertain future, especially for those Australian plays yet to get to a DFS but are doing their exploration activities offshore as well. The assumption here is that the restrictions on foreign investment for plays in 'strategic minerals' are blanket restrictions btw, but even if the are targetted at teh Chinese only how China responds will be interesting (if more and more Chinese FIRB proposals are now knocked back). Makes a mockery now that we fully sold off a producing port (Darwin) and milk formula player to the Chinese, given events of recent days (NTU and now AVZ).

    Wrote enough on this last day or not, so will sit back now and see what happens.

    All IMO
 
watchlist Created with Sketch. Add AVZ (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.