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78.0¢ avz minerals limited

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Scarpa

9,145 Posts.

18429

26/05/18

19:12

Post #: 33321953
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Originally posted by Remark ↑

Maybe we should copy & paste an email (or several) to AVZ?

(With @Scarpa 's approval of course)

https://avzminerals.com.au/contact/

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I have no issues with anyone using my post for any reason. It is in the pubic sphere that I have posted it so what people do with it is up to them as what I have posted is IMO anyway.

Originally posted by bpinvestnstocks ↑

"Like to hear what others think, but I would actually like to know from managment what conceivable production could come from AVZ in their opinion in the time period 2021 - 2027."

Like your posts scarpa, to me anyway they seem like you take a sensible economics based view.

As you would know I've been critical of AVZ not hitting stated targets in the past (drill rigs to site etc). I note others are getting stirner (ozblue, Dr Wolf, gouldians) whilst ironically I'm inclined now to cut them a little more slack (the assays we are awaiting are in here in Australia at least). I also take statements like "hoping" and "expecting" are forward looking. For me those qualifying words matter. I'll give management a lot more latitude if they include them in their estimates than if they don't.

But I find myself wondering if it might be too soon to be pressuring management or asking that management publicly commit to either a we-are-going-to-mining or to a we-are-looking-for-TO-offers position. Reason and data strongly suggest their is a very significant resource at Manono and Kitololo but it is still the case I presume that AVZ management don't know all of the details of what they have because the drills and assays will actually be confirming things for them too. I think it is probably fair comment that in the details they aren't holding back on us, the are waiting just as we are. Nigel's 'batting away' offers statement 'because it was too soon' (and I'm assuming the offers were too correspondingly low) seems consistent with this view. Put to much pressure on the Management team to go public with one or the other direction might effectively mean pressure is being put on them to prefer a sooner rather than later low price TO - when that probably isn't the best outcome for investors.

Management has share price incentives that kick in above the 30cent TO figure you mention so whilst I think I'd prefer management incentives linked to deliverables rather than a share price I still recognize that those incentives are better inducements to get the TO price higher if they want to go that way.

RE Tin credits. If I follow you arguments correctly tin and lithium products are not currently producable from the same starting volumes - so tin credits are actually not credits. Either you produce tin from your dug hole and treat the lithium as waste or you produce lithium and the tin is waste - on current tech. Could be wrong on that - but that is what I've understood you to be saying. And you point out Greenbush's use mine from two holes.

Dr_Manhattan, another poster whose research I respect is including tin credits in his reckoning of costs. Haven't checked yet why there appears to be a difference between you guys approach. But you seem to be saying tin is an alternative product from resource not a credit. Am I wrong on that?

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Regarding tin and tantulum, your assessment of my views are correct. I posted these here:
Post #: 31669795

Originally posted by ozblue ↑

@Scarpa , great post and analysis. I pretty much agree with everything you have stated in regards to management providing an expected path forward, we definitely need it. However the 2 Mt/a starting plan is not that bad IMO because of initial Cap costs, and the points that @kcheers raised on "The road to Manono" thread.

IMHO it is going to take time to get everything in place, and being 2500km or thereabouts from a port will need some type of rail solution for large scale development in the 5, 10, or even 20Mt/a future. That will certainly take years to develop, and there are no concrete plans for it yet, just talk.

Also, IMHO the "we-are-looking-for-TO-offers position" type of talk has been wrong from day one. It smacks to me of "desperate seller" so only low ball T/O prices should be expected. The alternate approach of going full bore towards development is by itself more likely to bring higher T/O offers or a JV buyout if that was the path chosen.
I'm afraid I have never been a believer of grabbing a massively valuable resource, and flipping it quickly for a profit. The real money is made long term in developing the asset.
Those that are prepared to cut a lot of slack to management over the time things take, you should remember that these people are experts in their fields, so should set timelines they can deliver on. If they don't know how long assays take for example, then I would not consider them to be industry experts.

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If we look at PLS they are starting at 2mtpa but already are proposing to expand to 4 mtpa ore feed. Given the distance of AVZ to port - i.e. transport costs - and the need for tin/tantulum credits, scale and size is the key here (and to be frank 2 mtpa ore feed facility IMO will not cut the mustard if that is all they intend building, which I doubt). As a start up facility for AVZ 2mtpa for a year or two maximum is fine but like PLS (noting AVZ is a longer way to port) expansion plans are needed and ramp up to 5mtpa would need to come quicker IMO to drive project economics and any credits available. (Note: PLS will start at 2mtpa but will be at 4mtp probably a year or two after first production IMO).

I dealt with this issue a while back when the Ivanhoe transport costs were put up in this thread and we went through AVZ's scale and size to show what will happen here as Ivanhoe was a smaller operation hence why Ivanhoe had high transport costs per tonne - i.e. economies of scale in transport costs requires more tonnages and that is what AVZ needs to do to lower transport costs per tonne (and treat tailings to get your credits to reduce transport csts). Without scale and size the project economics can be adversely affected, unless of course they decide to have dedicated tin/tantulum pits as well, on top of their 2 mtpa ore feed facility at project start up. Post #: 30646252.

In any event my post is around what management is currently thinking around expansion plans and whether they should be advising the market. Some transparency IMO is required but all IMO.

All IMO

AVZ Price at posting: 15.5¢ Sentiment: None Disclosure: Held
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