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78.0¢ avz minerals limited

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eshmun

12,259 Posts.

3833

08/05/18

02:43

Post #: 32942149
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Originally posted by ozblue ↑

Eshmun, I commented the other day on what this resource would be worth if it was in Australia. The answer was many multiples of the current price.
Given about 20km of mineralised pegmatites (thanks to the TTX discovery), plus the sheer thicknesses of the pegmatites currently being drilled, and the grades coming in, the value of 100% of the product, LCE, would be around $400-$600 Billion dollars (given over 1 billion tonnes of ~1.6% Li2O). It is a truely massive resource.

This will be mined, even if it takes $1b spent on rail and $5b spent on a large hydro scheme in the nearby Congo River. I'm talking much more massive plans than those currently envisaged, plus eventually 20mt/a plant or larger, such is the nature of the deposit. That will all take 1-2 decades to come about, but the world will need the lithium from this deposit.
When ICE vehicles are becoming nearly extinct in 10-20 or 30 years time, the 100m EVs will need about 6.3M tonnes of LCE/a. Add all other uses and we start talking 10-15Mt/a, numbers that most cannot comprehend at this stage of a paradigm shift from FF to renewables.

Your discussion of sovereign risk is already priced into this deposit, hence the $400-500m current MC. If in Australia it would already be in the Billions.

Why keep raising it when it is already priced in??

The weak short attack of last week was just enough to panic retail investors that had already seen up to 50% of their gain eroded, and was at a beautiful technical point to pull off the operation. Large international investors that you keep alluding to, would have been short in the 10's to hundreds of millions, yet there was a grand total of 6m shorts, including Monday 1st of May. That is one smaller institution/hedge fund at best, there are many people on this forum that hold more than 6m shares in AVZ by themselves, sitting on multibag profits. My assumption, until proven otherwise is that some of these people reduced risk when the technical support of 19-20c was broken, all having sell triggers at around the same levels, set off by the short operation.

You also need to remember those many millions of shares were bought by someone, so there was no collapse in price (like MUS or ASN). This company has the rights to this immense resource and despite the location, nothing will stop it from being developed, simply because the world needs the lithium.

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Hi ozblue,

I don't want to get into a debate on the value of the project, the value of Australian projects or the future demand for EV or lithium.

In answer to your question.

"Your discussion of sovereign risk is already priced into this deposit, hence the $400-500m current MC. If in Australia it would already be in the Billions.

Why keep raising it when it is already priced in??"

I don't keep raising the question. I've posted on these threads on the odd occasion and posted recently to give my opinion on the share price fall. After all the thread title is about a running discussion on the share price. People need to understand that sovereign risk is not a static risk, it can change in response to changing events a country. I've been monitoring the situation in the DRC on the World Events threads and posting a semi-continuous news feed relating to in country political events for anyone interested. Esh

https://hotcopper.com.au/threads/un...onusco.3604992/?post_id=26458305#.WvCA_8K6ztQ

AVZ Price at posting: 18.0¢ Sentiment: None Disclosure: Not Held
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