AVZ Discussion 2022

[Winenut]

Question regarding the buyout endgame that is mentioned quite often. Apologies in advance - my question is very naive as I don't have any experience of this type on situation. Don't mean to anger anyone. Genuinely curious to hear others' thinking on this.
When there's talk of a buyout, I assume that people mean our share of Dathcom would be bought from us.
I presume also that a Chinese or US player can't buy AVZ Minerals based on previous FIRB intervention.
That leaves only a takeover by an Australian major, but that doesn't fit with the US vs China narrative.
So the only way for one of those players to get hold of Manono is to buy AVZ's share of Dathcom.
If that's the case, then assuming for a moment that AVZ has 75% of Dathcom and Dathcom has 90% of Manono, then a buy it might yield about AUD 5.7B (0.75 x 0.9 x USD5.66B, using the ICC claim as Manono's valuation in the absence of anything better) cash for AVZ.
Let's say then that AVZ has to settle a few law suits and pay some costs here and there and walks away with about with about AUD5B.
That's about $1.40-$1.50/share, but what value would the company likely really have in that situation?
AVZ would be a cashed up company with no projects. Would the share price likely converge on a simple value of cash-at-hand/SOI less some discount for having the best (highest paid) BOD on the ASX?
I know this is all very back of the envelope and no-one knows for sure what will play out, but just curious to hear what is in others' minds when they think about the buyout scenario and how it would yield a benefit to us long suffering shareholders.

No-one was ever going to takeover AVZ minerals

Nor for that matter AVZ International

FIRB will not come into play in my opinion

The value is in Dathcom assuming Dathcom has the ML (Dathcom is not an Australian domiciled entity)

Everyone knows that Dathcom is what you want control of

All of these things are well known now

You are not as naive as you think I won't add anymore than this

 

[Onthefm]

Then why is our BoD so optimistic one may ask. They seemed to be very happy about a positive outcome, so we will have to wait for the next announcement.

Yes mate they are as optimistic as they have a great relationship with the upper echelons of government. As you would expect from the best bod on the asx. Oh fuck hang on a minute now the best bod on the asx is sueing the upper echelons of government. Mmm but I congrate your optimistic out look. But for me get me out of this complete fuck up as soon as possible any fucker that spends 20 fucken years somewhere and still doesn't get it is a clown imo. Christ he was born in kuching he didn't even get corruption there did his old man not explain it to and 20 years Congo. Somone is taking the piss.

 

[Flight996]

Is it possible for Zijin to actually stall it? Or are they legally bound to the date of schedule?

If the previous reason for delay was true ie conflict of schedule of arbitrator (even though super super lucky/convenient for Z), and thus ICC likely not in Zijin’s pocket, then surely Zijin couldn’t find a way to stall?

Hopefully
Gltah

Hi David

Here are the ICC rules, which unfortunately are silent on delays and postponements by the parties. Nonetheless, there's still something for everyone in the text.

ICC Digital Library

library.iccwbo.org

Cheers

 

[tonster66]

z has brought this action in the ICC against AVZ, so there should be no excuse for a further delay.

 

[j.l]

No-one was ever going to takeover AVZ minerals

Nor for that matter AVZ International

FIRB will not come into play in my opinion

The value is in Dathcom assuming Dathcom has the ML (Dathcom is not an Australian domiciled entity)

Everyone knows that Dathcom is what you want control of

All of these things are well known now

You are not as naive as you think I won't add anymore than this

View attachment 38632

Hey @Winenut, thanks for taking the time to reply. In hindsight it was silly of me to post the question, so I have deleted it. I was curious about how a post-buyout valuation of the company would be made, but it's inevitable that my question would be seen as a discussion of Manono value, which understandably is frowned upon right now.

 

[Frank]

*Don't Shoot the Messenger, Cos the messenger is going to

Just like the rest of you after reading this pile of

We all know who's been "Tasting the Honey" Princess

That outfit alone makes me wanna

 

[Carlos Danger]

Hey @Winenut, thanks for taking the time to reply. In hindsight it was silly of me to post the question, so I have deleted it. I was curious about how a post-buyout valuation of the company would be made, but it's inevitable that my question would be seen as a discussion of Manono value, which understandably is frowned upon right now.

Frydenberg spoke of 'secure, resilient and sustainable global supply chains' when giving his preliminary view on why the 2019 Yibin deal was unlikely to be approved. It is unlikely this criteria has changed at FIRB. Therefore concerns of control of AVZ and its 'significant interest in the Manono project' applies only to China and not the USA imo

That being said a buyout of AVZ's 75% of Dathcom is the most likely scenario. This deal would include all legal challenges being dropped and will be before the mining licence is awarded imo. I can't see the DRC government suddenly deciding to give us the licence just so AVZ shareholders can get more money. The awarding of the licence is their leverage and they will use it to benefit themselves. Not us.

As for what management do with the proceeds of a hypothetical buyout of AVZ's interest in Dathcom there are two main options. Wind up the company and payout all remaining funds to shareholders. Or pay a special dividend and continue operations with remaining funds and look for new tenements in more regular jurisdictions. The latter is more likely imo

 

[Winenut]

Hey @Winenut, thanks for taking the time to reply. In hindsight it was silly of me to post the question, so I have deleted it. I was curious about how a post-buyout valuation of the company would be made, but it's inevitable that my question would be seen as a discussion of Manono value, which understandably is frowned upon right now.

All good

I didn't want to get into the valuation.....too bloody hard!

If AVZ's effective interest in Dathcom is bought out I guess the board can decide to push on to other projects all cashed up and ready to go....or pass the cash on to all the shareholders and ride off into the sunset

That's a couple of scenarios straight off the top of the head

There's probably a hundred more.....

 

[Winenut]

All good

I didn't want to get into the valuation.....too bloody hard!

If AVZ's effective interest in Dathcom is bought out I guess the board can decide to push on to other projects all cashed up and ready to go....or pass the cash on to all the shareholders and ride off into the sunset

That's a couple of scenarios straight off the top of the head

There's probably a hundred more.....

Apologies!!

I hadn't read Mr Dangers thoughts before posting mine

So it seems there a couple of obvious possibilities in the wash up of this shit show

 

[Sparrowhawk12]

Frydenberg spoke of 'secure, resilient and sustainable global supply chains' when giving his preliminary view on why the 2019 Yibin deal was unlikely to be approved. It is unlikely this criteria has changed at FIRB. Therefore concerns of control of AVZ and its 'significant interest in the Manono project' applies only to China and not the USA imo

That being said a buyout of AVZ's 75% of Dathcom is the most likely scenario. This deal would include all legal challenges being dropped and will be before the mining licence is awarded imo. I can't see the DRC government suddenly deciding to give us the licence just so AVZ shareholders can get more money. The awarding of the licence is their leverage and they will use it to benefit themselves. Not us.

As for what management do with the proceeds of a hypothetical buyout of AVZ's interest in Dathcom there are two main options. Wind up the company and payout all remaining funds to shareholders. Or pay a special dividend and continue operations with remaining funds and look for new tenements in more regular jurisdictions. The latter is more likely imo

Would a TO pre-ML cause delays in ML for the buyer? Surely so, even with greasing Gov wheels from brown paper bag grease. A deal is a deal - wouldn't it be smarter for DRC to award ML to AVZ, immed followed by pre-agreed TO? That would also be a more spinnable story for DRC Gov to try keeping the IMF, WB, international investor gravy train running? Could be why a deal is taking so long to construct & agree on? IMO.

 

[Carlos Danger]

Would a TO pre-ML cause delays in ML for the buyer? Surely so, even with greasing Gov wheels from brown paper bag grease. A deal is a deal - wouldn't it be smarter for DRC to award ML to AVZ, immed followed by pre-agreed TO? That would also be a more spinnable story for DRC Gov to try keeping the IMF, WB, international investor gravy train running? Could be why a deal is taking so long to construct & agree on? IMO.

Why would AVZ sell if we get the ML?

 

[Bray]

*Don't Shoot the Messenger, Cos the messenger is going to

Just like the rest of you after reading this pile of


View attachment 38633

 

[TDITD]

What do you think a fair TO price would be Carlos - my guess is a tick above $2 and happy to be ridiculed for it

Agreed $12 USD

 

[j.l]

Frydenberg spoke of 'secure, resilient and sustainable global supply chains' when giving his preliminary view on why the 2019 Yibin deal was unlikely to be approved. It is unlikely this criteria has changed at FIRB. Therefore concerns of control of AVZ and its 'significant interest in the Manono project' applies only to China and not the USA imo

That being said a buyout of AVZ's 75% of Dathcom is the most likely scenario. This deal would include all legal challenges being dropped and will be before the mining licence is awarded imo. I can't see the DRC government suddenly deciding to give us the licence just so AVZ shareholders can get more money. The awarding of the licence is their leverage and they will use it to benefit themselves. Not us.

As for what management do with the proceeds of a hypothetical buyout of AVZ's interest in Dathcom there are two main options. Wind up the company and payout all remaining funds to shareholders. Or pay a special dividend and continue operations with remaining funds and look for new tenements in more regular jurisdictions. The latter is more likely imo

Thanks Carlos appreciate your insight as always.
You answered the question I was trying to ask

Your answer has jogged a memory from either the last AGM or Perth RS in which Nigel mentioned pulling the pin and chasing another project (hazy memory but I think it was in the context of AVZ being unsuccessful in getting the ML).

 

[cruiser51]

Why would AVZ sell if we get the ML?

Simples if it is part of the best deal AVZ can get, at the end of the day, a deal is a deal.

 

[Samus]

If they sell they better not decide to keep our fucking money. I'm not following these lying turds on another pied piper adventure. Ffs.

 

[aanti.dumb]

Apologies if this has been discussed already but I have been doing some reading on the Martin Fayulu. I wonder if NF has considered having a meeting with Martin to discuss the AVZ situation. Getting the political opposition to apply some pressure on the Gov cloud help shed more light on the corruption and hopefully force the corrupt ministers to follow the law. Also if he wins AVZ situation will be top of mind.

Looking at the 2018 election results seems like he was close to a majority but due to some shady actions and possibly some brown bags and snacks in the right places a deal was done and a coalition was formed and Tshisekedi declared winner.

Watching this interview with him and he seems very PRO US/ EU/ Western countries.

 

[Carlos Danger]

If they sell they better not decide to keep our fucking money. I'm not following these lying turds on another pied piper adventure. Ffs.

A lot of people make the mistake of thinking that the lesson of the pied piper is to not trust strangers. But it's not. The moral of the story is to always pay people what they are owed.

 

[Samus]

A lot of people make the mistake of thinking that the lesson of the pied piper is to not trust strangers. But it's not. The moral of the story is to always pay people what they are owed.
View attachment 38639

Put it this way - I'm not interested in following Nigel off a cliff like a fucking lemming (again).

 

[Winenut]

*Don't Shoot the Messenger, Cos the messenger is going to

Just like the rest of you after reading this pile of


View attachment 38633

Why isn't there an "oh fuck me are you kidding?" emoji