One management is seen to be slow and plodding. One management is seen to be enigmatic and progressing quickly. Not saying I necessarily agree but this is some sort of perception out there.
AVL 7c to 2.8c is a 60% fall. TMT 85c to 35.5c is a 58% fall.
Then we also have TNO 26c to 8c for a 69% fall who are taking a different approach again and have large resource (TBC soon) at moderate grades with DSO potential as a spoken about route.
These are the only 3 V stocks on the ASX I consider relevant.
AVL only 30% above start of year breakout.
TMT back to a price level it hit on initial drill campaign and pre PFS prices.
TNO back to levels before it even acquired the V project when they literally had SFA in terms of projects
All back to prices that were around when V was $10-15/lb. Even if V prices retrace they are still going to be higher than that for some time. This shift is more structural than Cobalt in the sense that it's a stronger market underpinning demand and the existing players don't have the expansion capacity Glencore etc had in the DRC. But even if we took Cobalt as an analogue it went from 20k to 90k and settled at 55k, so almost perfectly mid range. If we extrapolate to V you have a $3 low to a $35 high which would give the midpoint as $19. Ala the sweet spot. That allows contracts near our $13/lb model which throws up some great numbers.
In my opinion both TMT and AVL are priced as if they will never produce. The LT picture hear is as someone said earlier, if they don't produce this has further to drop. If they do produce we are at a fraction of fair value. Timeframes and convictions determine strategy I guess. I see potential in the Gabby twins personally.
AVL Price at posting:
2.8¢ Sentiment: Hold Disclosure: Held
(20min delay)
