AVZ Discussion 2022

[Deepp]

Too me on the whole seems positive.

The big question is not how does this value the company, it's how does the valuation compare to the initial CATH deal.
(rounded figures, i'm lazy)
First deal was 24% for $240mil. ~1 Bil MC
This deal 30% for $280mil. ~0.86 Bil MC

So despite AVZ's situation, and aaaall the shit we've been through, and still have to go through...
it seems CATH still willing to value the company similarly to their previous arrangement.

Sure, slightly less, circa 15%, but they' thrown in some other sweeteners to help us power through to the end of this shit show. That's a very positive sign to me. Don't use this price to try and estimate what our MC should be. Just as useless as trying to do the same thing when they made the first deal. OF COURSE they are getting a bargain! Because of what else they can bring to the table. They get a good deal but it increases the value overall because it increases the potential of what we can achieve.

But on the whole:
This is the best sign we've received in years that we are nearing the end of this thing, we're gonna survive it, get what we deserve!

Some more random thoughts.
This is still a great deal for the Chinese. They will get all the Lithium they need.

• They will get the lithium cheap, but this thing is so fk'ing huge i'm sure it's still gonna work out well for us holders.
• USA is fkd now. They did fk all to help us out so too bad for them. China will continue to control the worlds lithium supply. Maybe CATH caught wind of US or other companies sniffing around AVZ and so decided to just make a move and lock things in?
• Chinese companies often compete against each other. Time for CATH to squash Zijin.
• CATH can apply pressure in ways that AVZ can't. It's good to have a clear commitment from them that we're in this thing together and they are fully throwing their weight behind pushing forwards WITH AVZ.
• I'm not clear how the 'discount' works..

"First deal was 24% for $240mil. ~1 Bil MC
This deal 30% for $280mil. ~0.86 Bil MC"

Previous deal was 24% of Dathcom.
This is 30.5% of GLH (currently 75% of Dathcom)

So roughly similar valuation looks like.

 

[PhatCatz]

Do we still have access to Locke if required? Will this 30 per cent mean there is a higher chance AVZ won’t have controlling interest in the project?

I don’t trust the Chinese at all. This isn’t some good will gesture.

 

[JNRB]

"First deal was 24% for $240mil. ~1 Bil MC
This deal 30% for $280mil. ~0.86 Bil MC"

Previous deal was 24% of Dathcom.
This is 30.5% of GLH (currently 75% of Dathcom)

So roughly similar valuation looks like.

I was worried I'd made a mistake somewhere in my roughing it out, and very glad the correction aparently works in our favour

Curious why the change though.

 

[Bray]

Aslong as we get out with our initial deposit of $ or more, who gives a flying F. Hope CATH smashes zinjin

 

[Retrobyte]

Brown paper bags at 10 paces - Mr Pei v Zijin

 

[j.l]

Brown paper bags at 10 paces - Mr Pei v Zijin

Surely not?
Zijin get the north, CATH the south.

 

[tolate]

Restructured Transaction Implementation Agreement and Joint Venture including US$20 Million Pre-Completion Facility
Now what do you say about the CHINESE....LMAO

TIA on LOCKE DEAL out...LMAO

AVZ Minerals Limited (AVZ) is pleased to announce that it has entered into a precompletion funding agreement (Pre-Completion Funding Agreement), a revised transaction implementation agreement (TIA) and a relationship deed with Suzhou CATH Energy Technologies (CATH) (together the Restructured JV Arrangement).1

 

[PhatCatz]

Chinese don’t think the way we western do. If going by what’s been published this “deal” will allow legal access on the tenement. Once that occurs they will be impossible to remove especially with this capital expenditure funding agreement and grey repayment clause. They will do a Mali and LLL and squeeze AVZ for the whole company in collaboration with DRC government. Once the foots in the door they will do everything to get it all. This just accelerates that aggressive and illegal takeover.

 

[tolate]

Surely not?
Zijin get the north, CATH the south.

Yes i think that is the way it will go...imo
Locke deal out the door CHINESE DEAL ON

BRING IT ON

 

[Goldenboy]

Chinese don’t think the way we western do. If going by what’s been published this “deal” will allow legal access on the tenement. Once that occurs they will be impossible to remove especially with this capital expenditure funding agreement and grey repayment clause. They will do a Mali and LLL and squeeze AVZ for the whole company in collaboration with DRC government. Once the foots in the door they will do everything to get it all. This just accelerates that aggressive and illegal takeover.

Is that you Hoots ????

 

[BRICK]

Dirty old Hooter

 

[JNRB]

Surely not?
Zijin get the north, CATH the south.

Zijin and CATH have very different motivations.

Zijin digs shit up and sells it.
CATH buys shit that's been dug up and sells batteries.

Zijin wants to make money selling rocks.
CATH wants a secure supply of rocks so they can make money selling batteries.

Zijin needs CATH, but CATH doesn't need Zijin. Zijin is just a middle-man, and it is entirely in CATH's interest to cut them out completely. CATH wants the whole shebang and aparently is willing to pay for it. There is 0 advantage for them sharing with Zijin.

 

[BRICK]

Giddiup and letsfuckengo

 

[JasonM]

certainly wasnt expecting this, seems to be very left field. overall I take this cautiously optimistically. caution as I dont trust the fucking chinese and wish we didnt need to deal with them but perhaps the reality of the situation is we have to in order to get out of this fucking mess. I think its a positive to have a chinese company in our corner and so chances of moving this forward have increased and likewise chances of a western company buying out avz has also increased.

This deal is massive vote of confidence, as is the $10m unsecured imo.

 

[Bray]

Better the devil you know as they say

 

[Mute22]

We were always going to be tied at the hip to CATH/CATL is some regards, and I am glad they are serious about the relationship despite other Chinese company interests.

Chinese to plough US$400m into AVZ lithium project

In one fell swoop lithium developer, AVZ Minerals has locked down US$400 million in funding, a serious off-take partner and Chinese backers with very deep pockets and an intimate understanding of lithium battery manufacturing.

thewest.com.au

The continued commitment by the worlds largest battery producer is powerful show of confidence to DRC they can have their cake and eat it too, if Zijin can to be pushed out of the picture the West and Chinese are both happy.

I have far more confidence now that the DRC, as they have been stating, will let this go through the courts and then sacrifice some scapegoats at the alter of 'fighting corruption'.

 

[dollarbills]

Could this be a sign the Chinese have conceded and CATL have set themselves up a slightly better deal (plus lowered the valuation) prior to Zijin offering to buyout AVZ's share?

 

[Skar]

certainly wasnt expecting this, seems to be very left field. overall I take this cautiously optimistically. caution as I dont trust the fucking chinese and wish we didnt need to deal with them but perhaps the reality of the situation is we have to in order to get out of this fucking mess. I think its a positive to have a chinese company in our corner and so chances of moving this forward have increased and likewise chances of a western company buying out avz has also increased.

This deal is massive vote of confidence, as is the $10m unsecured imo.

Zijin wants to start mining 2026, US blacklists CATL from military contracts, AVZ uses Locke deal to leverage a slightly better deal from CATH. Rio bought arcadium, PLL+SYA merging (and PLL selling A11 shares), so seems like there are a few things bubbling away.

I have bottom drawed all my lithium holdings because of how cold things are now but a few things I am inferring - US only cares about weakening China (but doesn't really want much to do with Africa beyond that). EV/Electrification in US will likely not accelerate like was predicted in early 2020s.... they kicked the can down the road and likely its another 3-5 years before another big lithium boom, at which point HOPEFULLY AVZ is at a point it can be sold and we haven't been diluted too much.

 

[BRICK]

Better the devil you know as they say

100 fucking percent.

 

[DiscoDanNZ]

Chinese don’t think the way we western do. If going by what’s been published this “deal” will allow legal access on the tenement. Once that occurs they will be impossible to remove especially with this capital expenditure funding agreement and grey repayment clause. They will do a Mali and LLL and squeeze AVZ for the whole company in collaboration with DRC government. Once the foots in the door they will do everything to get it all. This just accelerates that aggressive and illegal takeover.

A slight positive you could take from that is that we have an opportunity to get our money back? With all of this shit fuckery I suspect a lot of people who planned on this being a long-term/retirement fund hold will be out the door when an opportunity arises.*

*I will be one of them, I've gone from looking at this as a 10 year hold, debt free early retirement to a 'can I one day pay off 25% of my mortgage?'


Anywho, hey guys hope you are all doing well!

I see this announcement as a huge positive. Am I also reading it correctly that it looks like CATH are basically going to fund the first stage of development? Been out of the loop for a bit and don't know what to think anymore.


P.S I'm going to be in Freemantle on the 21st of Feb and my plan is to have a beer in every pub in Freo while my mates go to Rottnest for the day if anyone wants to catch up for a beer