STTCOMP AVZ, FA LONG
MC: $220m
Currently estimated cash: $15m
SP: 12.5c
Mining: Brownfield exploration - hard rock lithium project in DRC.
Chinese company, HuaYou, subscribed $13m @7c in AVZ.
Recent Drilling results are extremely exceptional,
- MO17DD001:
235m @ 1.66% Li2O & 1001ppm Sn (24.5m - 263.9m)
- MO17DD002:
202.8m @ 1.57% Li2O & 1078ppm Sn (65.5m - 268.3m)
- MO17DD007:
250.9m @ 1.48% Li2O & 913ppm Sn (1.9m - 252.8m)
Exploration target has been upgraded to
1Bt - 1.2Bt @ 1.25% - 1.5% Li2O (about 6 -9 times of PLS'; AVZ's ownership 60%).
AVZ is heavily discounted for its early stage at exploration and sovereign risk, so it's high risk, but the assay results were compelling, and its exploration resource target (already factored in 60% ownership) is the world largest, 4.7 times of PLS', and 4.9 times of KDR's.
AVZ's fully diluted market cap is 1/5 of PLS', and about half of KDR's.
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| 1 |
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Fully diluted Market cap |
Resources |
Li2O (T) |
x |
| 2 |
PLS[/B] |
$1,328m |
156Mt @1.25% Li2O (JORC) |
1,950,000 |
4.7 |
| 3 |
KDR |
$523m |
128Mt @1.44% Li2O (JORC) |
1,843,200 |
4.9 |
| 4 |
AVZ |
$281m |
1Bt to 1.2Bt @ 1.25% to 1.5% Li2O (Exploration) |
15,125,000 (100%)9,075,000 (60%) |
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seekingalpha.com article was written before the upgrade of the exploration target to 1Bt- 1.2Bt @ 1.25% -1.5% Li2O.
Estimated fair value could be anywhere between
A$1.33 and A$13.4 per share for 800Mt @1% -1.5% Li2O.
Then multiply by heavy risk factor, still is a good punt at 12.5c, imo.
Valuation
Since AVZ has not created any feasibility study yet, it is difficult to come up with any intrinsic value estimates. One way to look at AVZ's valuation can be through peer comparison with already established lithium players. Coming from the most recent intrinsic value estimates of Galaxy Resources (
OTCPK:GALXF) and Pilbara Minerals (
OTCPK
ILBF),
I guess that AVZ's fair value with 1714M shares outstanding
could be anywhere between A$1.33 and A$13.4 per share. However, please note that this is merely a rough estimate.
https://seekingalpha.com/article/4108404-can-congo-become-saudi-arabia-lithium?page=2
DYOR.
