Running discussion on SP, page-21202

'Horse i don’t understand why you always compare AVZ cost to producing miners?'

Hi @Kikker1959 et al,

Suspect that @8horse (like me) compares AVZ to other hard rock producers because he sees the incredible value by buying now vs the imminent re-rate once Manono enters production. Despite continual skepticism in the market (and thus attracting a 95% discount valuation vs peers) Manono is on course to be better (Tier 1 quality - minimal impurities), bigger (400mt and counting) and cheaper to mine (ultra low strip ratios and higher grade) than current producers - with the exception of Greenbushes.

However for arguments sake, let's compare AVZ to the darling ASX listed explorer of the hour - LTR.

Market Capitalisation:
LTR - A$185m (at 12c)
AVZ - A$111m (at 4.8c)

Est. cash position as at 30/6/19
LTR - ~A$3.5m (CR required this quarter IMHO)
AVZ - ~A$8m (CR not required this quarter and project funding imminent IMO)

Enterprise Value (EV) based on the above est. cash positions.
LTR - A$181m
AVZ - A$103m

Resources:
LTR - 75mt @1.30% (62mt Measured and Indicated)
AVZ - 400mt @1.66% (269mt Measured & Indicated)

EV per contained Li resource ounce
LTR - A$2.41 (US $1.69)
AVZ (65% share) - 39c (US $0.27c)

Strip ratio:
LTR - 8.24:1
AVZ - 0.7:1

Enough said - except to say the market will eventually sort out the wheat from the chaff and apply fair value accordingly.

GLTA

Cheers
Elpha