Ok, I have a VB so I will give a theory or two since you haven't given yours LOL and as people know VB lets me drivel a little easier btw.
Theory 1
The props are by someone willing to pay that price - don't know who - but could also be there to ensure oppies get converted. If oppies get converted automatic dilluton for CATL and Hauyou and prevents AVZ doing another CR anytime soon to btw, noting the monies received by AVZ in any event from Tianyi would reduce any prospect of a CR done in the next 6 to 12 months in any event. Also conversion of oppies also further dilutes Hauyou's stake more importantly.
The alternative is keep the heads price high enough so holders can either offload oppies on market, or sell heads more easier so as help to convert oppies without adversely impacting the SP. Having a timely DFS - see below also a key to this.
Theory 2
Timing of the DFS forms a base for SP rise above the 6.6c and 6.7c base, meaning DFS is likely to be close. Covering this theory is index rebalance, because if the DFS is good expect AVZ to find its way into the top 300 IMO in the next two years (so why not get in early if you need to rebalance your index LOL).
Note - after DFS, scheduled to be released quarter 1 2020 and before oppie conversion, I suspect capex funding will be done by a combination of equity for Offtake Agreements and bank finance thereafter in any event.
Complete guess and I haven't a clue anyway, as I am no good at TA to start with LOL.
Maybe just the beer talking but have enjoyed looking at the green label on the stubby and it transferring to some green days of late.
Separate issue: Impact on Tax Concessions on IRR
On a separate issue, over the last week or so a few have been talking about tax concessions and what that does to FA etc . The best way I could explain it is that they will make the post tax IRR become closer to the pre tax IRR. (Or, another way to look at it from a NPV angle, post tax NPV will be closer to pre tax NPV.) In any event based on the 2mtpa and 5mtpa SS pre tax NPV is ver very good btw so if that did translate to actuals in poduction well SP will look after itself with or without tax concessions.
A while ago I posted the following, when seeking to duplicate the modelling in the 5mtpa SS released in May 2019, and work out impacts on IRR and NPV if AVZ remodeled and didn't have/delayed a floatation option which was alluded to after that SS - the post is here which the below builds on Post #:
40536113
For others, under:
1. The base case for the 5mtpa facility had a pre tax IRR of 64.%, which I I got close to getting in my own modelling, and I then calculated a post tax IRR 45.31% (given AVZ don't actually provide these post tax IRRs in their studies generally (read probably they know/think they will be getting some form of tax breaks etc etc, which seems a very reasonable assumption btw)..
2. Scenario 1, pre tax IRR 68.61%, post tax IRR 49.19%. This scenario was for a DMS only option.
3. Scenario 2, pre tax IRR 80.64%, post tax IRR 58.42%. This scenario was for a DMS only option.
Obviously pre tax IRR is exceptional, so any tax concessions simply move post tax IRR/NPV closer to the pre tax IRR/NPV.
The details of what I was doing are in the embedded post, and the revised tables, compared with what is in the embedded post, showing post tax NPV and post tax IRR numbers are provided below - for simplicity and so people can see just putting in first 7 years data btw, but another15 years data follows etc etc:
Base Case - seeking to duplicate results of 5mtpa SS
Scenario 1 and 2 - using MET tests and reworking SS for DMS option no floatation.
Scenario 1
Scenario 2
The details as I said are in the above embedded post. The DFS will be interesting btw, and looking forward to it
The following post herein was the way I also looked at the DMS option as it applied to the 2018 SS for 2 mtpa facility as well - Post #:
39996281,
All IMO and obviously hope all have a good day today with prawns, beer etc etc
