Where to from here?

By now, most of you would have seen Nigel’s presentation and subsequent interview at the Sydney RIU Conference. Further to that, and my discussions with Nigel at that conference, as well as other research I have done, I thought I would share my opinion on where to from here for AVZ. Just to make it clear from the outset………. the following are simply my thoughts based solely on my own research.

The way I see it, is whilst our SP remains at these low levels we are open to a hostile take-over………… and this may happen at any time so the danger is imminent. With the low Market Cap at $95.9m, Scoping Study update and updated Transport figures coming soon, an interested party could throw a formal offer of say $70m over current MC and walk away with the prize. This would not be in the best interest of Shareholders, other than those who recently bought in at around the current price and would be happy to quickly double their money. Unfortunately most of us here are not in that boat.

IMO, I have no doubt Nigel and our BOD are more than aware of this threat and are probably prepared with the necessary actions to combat it if it occurs. I only hope Nigel has lined up a tier 1 M&A house to assist in defending such, if a HTO. HTO-wise, one would need the assistance of a tier one capable house like JP Morgan, Goldman Sachs and/or Deutsche Bank……………… Anyone else local would not provide sufficient support.

If a HTO were to happen……….let us say next week, it would probably be for around 6cps to 7cps. Naturally this may immediately trigger a bidding war with any other parties currently sitting on the sidelines, which may in turn end up with the best offer (IMO) being around 12cps to 15cps. Still very low-ball considering the resource size and quality as well as the potential control of the lithium market that the prospective buyers would enjoy.

On the other hand…………..If the Company was to announce future financing for mine construction, an offtake partner, the appointment of a new Chairman and the Scoping Study for 5mtpa (or even 3 of these announcements) prior to any HTO finalised, our SP should naturally rise and to that extent a threat of a HTO diminishes greatly. No one knows for sure what’s in a hostile entity/ies’ war chest/s but neither does any one entity know for sure what management has or, is firming up with absolute certainty. The HTO-er would have to move fast and that may or may not fail depending on their sense of measure.

It is obvious that Nigel & the BOD want to take us mining………….. I believe most here would also want the same thing, so their investment in AVZ can realise its true worth. Therefore IMO, a HTO at this point in time, would be devastating for most.

I still have faith that Nigel and our BOD have the situation at hand and want the best result for the shareholders. I will admit that like most here, I was not impressed at all with the recent CR and still believe if it was organised differently we would not be languishing at the current SP…………… I still cannot fathom the reason behind it, however it is what it is, and we need to move forward.

I hope that I am wrong in relation to a HTO as outlined in the near future……………I hope I am correct that Nigel and the BOD will surprise us all in the next few weeks with the positive information we have all been waiting to hear.

IMO, either event, HTO or significant consolidation of AVZ’s progress should raise the tide but shareholders need to know that it’s the end of the journey for them if a HTO is successful whereas funding just takes us to the next stage of the journey

All IMO & DYOR