AVZ I believe could be a great speculative investment but I think there is some warning signs in the risk assessment currently
Pros - Possibly the worlds largest Lithium deposit ever recorded (400-800mt exploration target)
- High grade hits and long at length
- Solid investment partners for development
Cons - Only own 60% of the deposit (makes peer analysis very hard and potentially after close last night it is valuing the MC of the deposit with one drill hole at $330 odd million
- In the jungle ( qualified with a 10% holder committing to build infrastructure should development continue)
- Could be up to 3 years from first product being delivered and the lithium landscape could change dramatically in this time where pricing could drop significantly from the record prices of 850-900 USD per spodumene tonne being recorded currently (This can be mitigated if they can get production and freight costs to around the $200 per mark as long term lithium pricing is forecasted to be $450-$550 over next 10 years
This COY has the potential to be one of the mr Bigs of the lithium space over the next 5-10 years but has considerable development to occur. I think the question has to be asked do we all think a $200 million MC for 60% of an asset that has one drill hole does that have significant upside in the short to medium term? Funding will be significant and dilution will occur for the mine to come into development. This is certainly a company to watch but also be wary of significant overvaluations. It is all about putting a price on what you think the asset is worth currently (discounting for risk assessments) and hoping that is greater than what the market values it at.
Good luck to holders but always DYOR
AVZ Price at posting:
12.5¢ Sentiment: None Disclosure: Not Held
