I posted a comment 12 months ago #36645835 and received some dud...

I posted a comment 12 months ago #36645835 and received some dud responses, however in light of events over the last 12 months I see no reason to change my opinion. I suggest shareholders need to concentrate more on the political and strategic games that are being played out in regard to the Manona asset. The acquirer of lithium is only interested in obtaining material at the lowest cost. The current Lithium oversupply is an old tactic that has been used for generations. For those investors who have been around for a long time, they will remember the Japanese created this situation with Iron Ore in the 1970's and Hamersley Iron's new Paraburdoo plant when completed was mothballed for about 18 months.
1. Dathomir holds the license. Did they invite HuaYou to participate? What are the ties of either party with the newest 12% shareholder? What other associated Chinese entities have a stake in AVZ.
2. HuaYou have a board seat but do not attend meetings. Is that a sign of their interest or do they feel that with their associates they already control the company? HuaYou this year obviously tried to cripple AVZ and forced them to have a capital raising at any level to remain solvent. The subsequent non binding, non exclusive arrangement has very little weight in AVZ's future
3. Cominiere's 30%. It has taken over 9 months for them to get signing capacity. Do they now have it? If so what level of disinvestment are they contemplating? Is this extra shareholding part of a further strategy to be offered to a new strategic partner? My belief is that the share price will not rise until this deal is completed so that Cominiere's stake is bought at a similar price to that of Dathomir.
4. Regarding the appointment of the Chairman. AVZ did have a number of hurdles to jump over before any Chairman of quality would confirm his appointment. The metallurgical tests needed to be progressed to a stage that would confidence to any new strategic partner or groups considering offtake. Once these proved satisfactory and a new strategic partner was on board ( who also agreed with the choice ) this position could then be filled.
5. Nigel has had a large amount of flack about his management. A good part of it may be unwarranted. AVZ is operating in a difficult environment, he has a diverse range of shareholders all with different agendas and he has been short of capital to push the project any faster. As MD he receives his instructions from the board and it is his responsibility to complete the nominated requirements. Yes, he will have inputs and recommendations but he still has to act within the agreed boundaries.

I believe the next 6 months are crucial for this company. For any meaningful increase in the share price, AVZ will need to have offtake agreements and possibly other strategic partners involved with a commitment to go mining. The other possibility is that a low ball takeover occurs.

I suggest that if you are a shareholder and living in Perth try and go to the AGM.

The comments are not advice not to be used for any investment decision.

Grassseeds