Why I think AVZ is not undervalued and instead may have further to fall:
- ML has hyped it to the moon complete with promises of Easter eggs and #saudiarabiaoflithium - the air is starting to come out of the hyping tyres but has a long way to go from where he started.
- Infrastructure, infrastructure, infrastructure - at the moment its a stranded resource an effing long way from port and there is no working infrastructure at mine site. I'm surprised very little of the discussion on HC is about how this infrastructure is going to be built. If the Chinese are building a road as a start, what's are its specifications and stage of completeness now? What about the bad weather and its affect on timing of construction?
- Size doesn't really matter - once you get past 200-300mt it's going to take 40-60 years at 5mtpa to mine anyway. Due to the cost of the whole mining operation, including the chem plant, this will probably have to start at 2mtpa to get financed and mined. So the exploration target most people focus on is irrelevantly big.
- Great metallurgicals, as well as high grade, big intercepts, and low overburden mining costs, tin credits, for a very large resource are already factored in by the market - metallurgicals due end May, and further assays any day, and even JORC unlikely add anything surprisingly good that is really new to the upside.
- This is the DRC not Australia - will affect financability and timing of stages beyond exploration.
- Potential Chinese takeover or JV partners can easily afford to sit back and wait indefinitely because AVZ does not have a credible "were going mining" path
Happy to debate and be educated / shown to be wrong on any of the above
