Running discussion on SP, page-83149

Good post sf120.

My central comment is hopefully AVZ have concluded it would be madness to attempt to ever go mining in the DRC. IMO, AVZ should only be aiming for a cash payout at this point, either via an award by the international courts or via an offer from Zijin. I have a high degree of confidence one or the other will happen, eventually.

It seems clear AVZ would be impeded at every turn if it tries to go mining. One example of many is achieving a reliable power supply via hydro. Zijin will conspire to ensure that never happens. Ditto Transport etc. All aided and abetted by the DRC.

For these reasons, market sentiment would be poor if AVZ announced it was going mining, ditto the share price and CAPEX funding might be difficult to get. The Chinese "partner" will surely dump AVZ as they were only ever China's backup plan B.

If AVZ isn't intending to go mining, it follows there should not be an MOU "where AVZ gets the south and equity in the north." The resource at the North alone is large enough for Zijin and China to dominate world supply and suppress the lithium price for years to come. With control over the North, Zijin and China have what they wanted all along and will have zero need or interest in buying the South from AVZ.

Zijin would go hell for leather digging it up the North without any environmental or workforce constraints while:
1.) Ensuring the AVZ "equity" in the North won't result in much by way of actual payments to AVZ,
2.) As mentioned above, do their best to make mining the South is as difficult as possible (or actually impossible) for AVZ,
3.) Supressing the lithium price,
4.) Guaranteeing Chinese lithium supply for decades
5.) Not making any serious offer to AVZ for the South.

Main current concern is getting litigation funding finalised. The delay is a worry, despite AVZ assurances. Assuming AVZ are holding off on finalising the litigation funding for as long as possible, in case AVZ get an offer from Zijin or, much less likely, a payment of liquidated damages. Or AVZ get some favourable court rulings and can strike a better litigation funding deal.
I have confidence in AVZ management finalising any necessary litigation funding:
- due to to their actions and statements so far
- AVZ directors wouldn't risk the certain legal action that would occur if they have misrepresenting the prospect of litigation funding still being available,
- AVZ have a great case, excellent legal progress so far and a ginormous potential settlement figure.

Last three comments:
- the timing of any offer from Zijin might be tied to lithium prices. If the lithium price shows signs of recovery, Zijin might act. At the moment low prices and dampened demand means there's no rush from a Chinese perspective as they have adequate supply at low prices.
- the DRC Govt will be over the moon if Zijin buy AVZ out and litigation ceases. DRC will be off the hook and there'll no doubt be plenty more snacks on offer to make it all happen.
- If Zijin get Manolo, it will have huge implications for non Chinese lithium producers as China will have self supply locked in for decades.

We wait.

IMO, DYOR, etc.