AVZ Discussion 2022

[wombat74]

If that’s the case, why did AVZ bother signing the MOU and pausing the ICDIS process?
What a waste of 6 months!

That would have been a great question to ask Nigel at the AGM .

 

[Spikerama]

That would have been a great question to ask Nigel at the AGM .

I reckon a better question would be, How does the BOD know the second 3 month suspension of ICSID will be sufficient to reach a negotiated settlement and if it isn't then will the BOD be inclined or likely to kick the can further down the road if another 3 month suspension is requested after FEB 27.

Suffice to say, when will it be a, 'No! That's it guys, you're done. On with the show.'

Obviously I wasn't there so not able to raise this thought but of course a massive thank you to all those who were and who have shared their notes and perspective. Very much appreciated.

 

[Flight996]

I recall reading somewhere something along the lines Kobold was offering a figure that would recoup AVZ's costs (exploration etc ) plus a little gravy on the side . Kobold are a bunch of grubs . IMO

But, as we are reminded ad-nauseum almost daily, KoBold is backed by billionaires Jeff Bezos and Bill Gates...like it implies some sort of business credibility. Fuck off KoBold, and come back when you've grown some pubic hair.

 

[cruiser51]

But, as we are reminded ad-nauseum almost daily, KoBold is backed by billionaires Jeff Bezos and Bill Gates...like it implies some sort of business credibility. Fuck off KoBold, and come back when you've grown some pubic hair.

Jeff Bezos is bald as a bowling ball, highly likely lacks pubic hair as well and the story goes Bill gates frequented Epstein's island.

 

[Investortug]

I reckon a better question would be, How does the BOD know the second 3 month suspension of ICSID will be sufficient to reach a negotiated settlement and if it isn't then will the BOD be inclined or likely to kick the can further down the road if another 3 month suspension is requested after FEB 27.

Suffice to say, when will it be a, 'No! That's it guys, you're done. On with the show.'

Obviously I wasn't there so not able to raise this thought but of course a massive thank you to all those who were and who have shared their notes and perspective. Very much appreciated.

From what I took away from the meeting was that Nigel has indicated this extension is a time constraint for any US owned party to come to the table with an appropriate offer, he said the US bring stability to the country as well as opportunity for future investment. Reading between the lines, they need to make a fair offer by end of this extension or we look elsewhere to close this out because in his words “I can’t do this for another 3 years”

 

[Spikerama]

From what I took away from the meeting was that Nigel has indicated this extension is a time constraint for any US owned party to come to the table with an appropriate offer, he said the US bring stability to the country as well as opportunity for future investment. Reading between the lines, they need to make a fair offer by end of this extension or we look elsewhere to close this out because in his words “I can’t do this for another 3 years”

So basically no more ICSID.

 

[Sangster]

If that’s the case, why did AVZ bother signing the MOU and pausing the ICDIS process?
What a waste of 6 months!

My understanding is the initial pause was at the request of the Americans to help create an atmosphere more suitable to achieving the peace agreement and minerals for security deal.

Company announcements at the start of the suspension suggested AVZ expected Cominiere to negotiate during this time and afterward indicated that Cominiere had not engaged with us but that the company remained open to respectful communication that acknowledged our rights.

Afterwards there was a DRC commentator angrily ranting on YouTube with an account of a supposed meeting in Washington.

(The following is my take on AI captions from a French language video by this commentator.)

The meeting was between DRC representatives (I'm assuming Cominiere), AVZ, KoBold, US State Dept, and moderated by Marco Rubio. The commentator was angry at the DRC government because Cominiere had opened stating that if KoBold wanted Manono they had to deal only with Cominiere because AVZ had no rights to the project.

The commentator went on to say that KoBold was clear with Cominiere that they intended to buy AVZ's interests in the project. AVZ then chipped in leading to an escalated exchange with Cominiere which was broken up by Marco Rubio stating to Cominiere their behaviour was not acceptable. KoBold excused themselves and the meeting ended without progress.

(Now getting back to your question. This is my understanding based on observation and may not be correct.)

AVZ signed the MOU based on the possibility we may at some point reach an acceptable agreement with KoBold on fair value.

I suspect the Americans requested the pause for diplomatic reasons and in exchange they set up a meeting between AVZ, Cominiere, and KoBold. AVZ agreed to pause ICSID proceedings hoping to make progress towards a favourable resolution. Cominiere agreed to the pause because it's in their favour to delay it, but they never intended to negotiate a resolution with AVZ.

ICSID rules require that a revised schedule be proposed when requesting a pause to the proceedings. The pause only delayed things for its duration. Proceedings have continued thereafter and we only lost a month or two on a genuine opportunity to negotiate a settlement.

It may have failed but our BOD made the right decision in our best interests.

 

[Sangster]

So basically no more ICSID.

Perhaps but not Not necessarily. ICSID vs DRC must be near its conclusion. AVZ paused it twice now for the sake of a possible resolution with the Americans.

The BOD are undoubtedly tired of this saga but not doing this for another 3 years can also mean concluding ICSID with an award for damages if there are no acceptable offers during this final pause.

Although I suspect you may be correct and we will sell to the highest bidder, American or not.

 

[Spikerama]

Perhaps but not Not necessarily. ICSID vs DRC must be near its conclusion. AVZ paused it twice now for the sake of a possible resolution with the Americans.

The BOD are undoubtedly tired of this saga but not doing this for another 3 years can also mean concluding ICSID with an award for damages if there are no acceptable offers during this final pause.

Although I suspect you may be correct and we will sell to the highest bidder, American or not.

I doubt very much it was near conclusion. It's almost as if it hadn't properly started with all the delays and obfuscation by DRC side.

 

[Sangster]

I doubt very much it was near conclusion. It's almost as if it hadn't properly started with all the delays and obfuscation by DRC side.

If you're referring to the fact we've not yet had a single day actually in court then I see where you're coming from but I've read the commercial courts (ICC, ICSID) are not like the criminal courts.

In criminal matters there may be multiple court hearings separated by discovery of evidence but in civil proceedings such as ICC and ICSID there is a discovery period that can last years with one final hearing at the end.

During discovery both parties submit various documents and replies. Eventually everything has been submitted and reviewed, then we all go to court for a few consecutive days and the arbitrators make a binding decision on who screwed who. As I understand it that's the end, no appeals, but the damages award may take a few more months to be decided and enforcement may also take time.

Looking at the procedural details tab of our case on the ICSID website we have over 2 years of back and forth between parties. I was under the impression our day in court was supposed to be late this year. With the latest pause I figure it must be scheduled for early next year, but I don't know, just guessing.

Does anyone know what the date of our hearing was before the pause?

 

[Powerage]

If you're referring to the fact we've not yet had a single day actually in court then I see where you're coming from but I've read the commercial courts (ICC, ICSID) are not like the criminal courts.

In criminal matters there may be multiple court hearings separated by discovery of evidence but in civil proceedings such as ICC and ICSID there is a discovery period that can last years with one final hearing at the end.

During discovery both parties submit various documents and replies. Eventually everything has been submitted and reviewed, then we all go to court for a few consecutive days and the arbitrators make a binding decision on who screwed who. As I understand it that's the end, no appeals, but the damages award may take a few more months to be decided and enforcement may also take time.

Looking at the procedural details tab of our case on the ICSID website we have over 2 years of back and forth between parties. I was under the impression our day in court was supposed to be late this year. With the latest pause I figure it must be scheduled for early next year, but I don't know, just guessing.

Does anyone know what the date of our hearing was before the pause?

You’ve pretty much nailed it Sangster.

In commercial arbitration there’s no “gotcha” moments, no introduction of new witnesses / expert opinions etc.

All of the heavy lifting is done prior to procedural hearing dates, which means that the likely outcome (within a reasonable degree of accuracy) is much easier for the parties to predict than in a traditional hearing / criminal trial etc.

IMO this could well mean that proceedings were suspended at our request because the outcome of the actual hearing would have been fairly easy to predict and could have crystallised some very uncomfortable truths regarding certain individuals / departments etc - none of which would be conducive to a negotiated settlement with a US entity (ie anti corruption / Magnitsky act etc).

If we had run this, we could well have been in a position of winning the battle but loosing the war (untenable findings for the US) - award of damages would probably have been relatively quick, liquidation probably not that long either, but collection…. Decades if that.

I for one, remain completely supportive of our BOD and know that they have the guidance from some of the best counsel on the planet.

This is basically one of biggest sub Saharan geo-political-commercial shit shows in history with global implications for energy generation and storage. A weaker / less committed board would have folded long ago.

We’ll need more funds for sure, and how we placate our major shareholder in a sale event is anyone’s guess… but for now I’ll wait and hope for the best outcome, knowing that what ever transpires, Nigel and the board have worked tirelessly in shareholders interests.

Bring on the Netflix adaptation!

Good luck everyone.

 

[Dazmac66]

It would appear now is the time for Nigel to get his head in the media to talk up our asset. This should be front page headline news, "Aussie Company Sells Mega Lithium Asset - Come In Spinners" It always feels like AVZ is just the fucking punching bag. Why not turn the tables and talk it up.

 

[Mute22]

It would appear now is the time for Nigel to get his head in the media to talk up our asset. This should be front page headline news, "Aussie Company Sells Mega Lithium Asset - Come In Spinners" It always feels like AVZ is just the fucking punching bag. Why not turn the tables and talk it up.

To what end, to make shareholders feel better?

Any international player with the capital and appetite for a project of this scale will have already been engaged directly through their acquisitions team department, or they’re well aware of the resource size and opportunity here. It’s not exactly something you can miss.

I’d much prefer Nigel stays focused on the three buyers currently in negotiations (four, including KoBold), given the complexity of the logistics, feasibility work and deal structure involved to deliver a contract.

 

[Remark]

Looks like Felix will have to swallow his pride on the 4th December, if he even shows up that is.

https://x.com/KiengeKki/status/1995069294531559787?s=20

 

[wombat74]

Looks like Felix will have to swallow his pride on the 4th December, if he even shows up that is.

View attachment 93428

https://x.com/KiengeKki/status/1995069294531559787?s=20

Sorry , Felix is scheduled to choke on a cream bun prior to the signing in Washington and wont be able to make it .

 

[Ancient]

At first thought I was a little thrown off by this announcement. Because it can seem like it's saying "We've suspended the court case whilst we sort out further litigation funding"... So I thought about it whilst I slept and have now decided my first impression was wrong.

The Manono project is not AVZ. AVZ is a party to the project.

What does funding really mean here? Funding is about project funding. The DRC government is party to the project and also wont be contributing to any funding. CATH are potentially an indirect party to the project according to the revised TIA, in which AVZ has the option to either self fund capital or have CATH fund it. With the later meaning CATH would loan AVZ the capital required and would be paid back through the project revenue. In the scenario where AVZ were to be funded by a loan from CATH, CATH would have rights over 100% of the offtake.

The conditions of the TIA are as follows:

• the Mining Licence being granted to Dathcom;
• the transfer of certain service entities to GLH;
• the CAPEX Funding Agreement is entered into by CATH and GLH;
• a shareholders agreement in respect of GLH is entered into between AVZ, CATH and GLH;
• a revised offtake agreement is entered into between Dathcom and CATH;
• all regulatory approvals and third-party consents required under all applicable laws (including those of the Democratic Republic of Congo and the People's Republic of China) and contractual arrangements having been obtained;
• no material adverse change having occurred.

Now let's just read the latest announcement again.



I am going to have a crack at translating this:
We are currently in discussions with several parties in respects to the sale of AVZ's portion of the project. The other parties recognise the importance of diversifying critical mineral supply chains away from China. I.e., one of these parties has interests in western supply chains, i.e., OEM and/or Government interests.

The next sentence is a bit weird, is it a threat to the western parties to say this is also on the table for Chinese players? Or, are they saying we're assuming that there will be legal obligations to our cornerstone investors (CATH) and these need to be considered in a sale. i.e., the TIA completion is assumed due to expected ML assignment to AVZ from DRC government as part of settlement discussions and therefore any purchaser needs to keep these conditions in mind. Are AVZ trying to encourage pre settlement acquisition which has been theorised about before?

IMO DRC and AVZ have somewhat come to a settlement agreement assuming the offer is right from the party taking over AVZ's portion of the project. The incentives for the DRC government need to be correct... Probably $ for a portion of their project share and a significant funding commitment. The additional consideration is how the negotiation is going with CATH. They want supply, they're going to want to keep as much of that as possible. For them to step aside and let someone else come in to fund the project and take the supply, the price would have to be right or they would need to be out maneuverer through the contracts. I doubt the funding party would only be contributing capital, the acquisition will be about securing western supply, and that will be with the blessing and potential financial backing from US Gov. So many unknowns throughout this...

The summary is that this is a very positive announcement and that they're essentially saying "a resolution is fairly progressed in which we, jointly with the DRC and US Government, can put forward a proposal to candidate purchasers, these purchasers have been presented and are engaged in negations, and now it's a matter of time before the negotiations have progressed to execution".

I easily could be interpreting this all completely wrong.. there's not a great deal to go off tbh

Now that the AGM has been held and some questions have been answered I wanted to return to this post I made earlier.

In this post I had explored the idea that funding may in fact be referring to project funding and from this you could interpret actions and comms as suggesting progress had been made with the DRC government etc.

In the AGM I believe it was made clear that funding is actually legal funding as many believed. Although it was clear in my original post that it was all theoretical and speculation I just wanted to come back and further highlight the inconsistencies in the theory now that further info has been released.

However, whilst we can close the door on some of those ideas I will now open another to think about, also pure speculation:

CATL and AVZ agree to bring forward the TIA and remove the need for the mining licence to be assigned. CATL makes a small upfront payment to help fund legals and receives the ~30% it would have in the revised TIA. If AVZ win ICSID and the mining licence is eventually signed CATL has significant rights on the project + will fund the project development. AVZ share holding reduced significantly but not completely.

With AVZ back against a wall it has no choice but to arrange this 'funding', however, it also creates significant pressures for US stakeholders. 3 Months...

Perhaps the agreement with CATL will be made similar to above and this will really ramp the pressure and start the timer for the US?

 

[Investortug]

Now that the AGM has been held and some questions have been answered I wanted to return to this post I made earlier.

In this post I had explored the idea that funding may in fact be referring to project funding and from this you could interpret actions and comms as suggesting progress had been made with the DRC government etc.

In the AGM I believe it was made clear that funding is actually legal funding as many believed. Although it was clear in my original post that it was all theoretical and speculation I just wanted to come back and further highlight the inconsistencies in the theory now that further info has been released.

However, whilst we can close the door on some of those ideas I will now open another to think about, also pure speculation:

CATL and AVZ agree to bring forward the TIA and remove the need for the mining licence to be assigned. CATL makes a small upfront payment to help fund legals and receives the ~30% it would have in the revised TIA. If AVZ win ICSID and the mining licence is eventually signed CATL has significant rights on the project + will fund the project development. AVZ share holding reduced significantly but not completely.

With AVZ back against a wall it has no choice but to arrange this 'funding', however, it also creates significant pressures for US stakeholders. 3 Months...

Perhaps the agreement with CATL will be made similar to above and this will really ramp the pressure and start the timer for the US?

It was mentioned a couple of times during the AGM by Nigel that the 3 months extension had the potential to get a squabble going between the current bidders (3 plus the tight asses who dropped the first offer)… he also stated a few times that there was about $10m left from CATH was it?? I think the 3 months is an opportunity to raid the ash tray and find a few more quid from support groups to fend off our very own ASIC clown show and the likes of…. Could also be the BODs ensuring they have enough cash to see them/us through to the “4-6 months from an accepted offer”

 

[JNRB]

It was mentioned a couple of times during the AGM by Nigel that the 3 months extension had the potential to get a squabble going between the current bidders (3 plus the tight asses who dropped the first offer)… he also stated a few times that there was about $10m left from CATH was it?? I think the 3 months is an opportunity to raid the ash tray and find a few more quid from support groups to fend off our very own ASIC clown show and the likes of…. Could also be the BODs ensuring they have enough cash to see them/us through to the “4-6 months from an accepted offer”

My wondering...
- actively engaging with Icsid = cash burn
- taking more funds from CATH = locking them further in to the project.
- - so the pause is a way to say 'ok weve delayed it, but here's your window to do a deal USA because else we can and will progress our arrangements with CATH/China'

 

[Hodlandwin69]

So is CATH getting the 30% of Green Lithium Holdings? I thought that was dependent on acquiring the ML, but sounds like the ML will be issued to a US company, i.e whoever buys it

 

[wombat74]

My wondering...
- actively engaging with Icsid = cash burn
- taking more funds from CATH = locking them further in to the project.
- - so the pause is a way to say 'ok weve delayed it, but here's your window to do a deal USA because else we can and will progress our arrangements with CATH/China'

Cath are sitting pretty . And Pei has approx 400mil shares . Box seat win / win either way .