At time of writing, the share price of AVZ Minerals Ltd [ASX:AVZ] is flat, trading at 18.5 cents.
As with many ASX-listed lithium companies, the AVZ share price popped at the tail end of 2020:
We look at the latest drill results from AVZ and their recent investor presentation. We then turn to the outlook for the AVZ share price.
AVZ drill results positive for Manono
The headline of the announcement was ‘AVZ drills 203.3m* @ 1.59% Li2O & 1,014ppm Sn from pit floor “wedge” at Roche Dure.’
And followed up by an important point made by AVZ Managing Director Nigel Ferguson:
‘This area had previously been categorised as waste material in our current mining and financial model due to a lack of drilling data and under our current model, is pre-stripped as waste before ore can be sent to the processing plant…These positive drill results unequivocally demonstrate this is not the case and this material may be remodelled with increased confidence as revenue generating ore once all of the assay results are returned.’
So, when a new resource update comes out, it looks as if there may be an upgrade once more data comes in.
Here’s my take on AVZ.
Outlook for AVZ share price
Investors have known for a long time that AVZ has a significant lithium deposit in the DRC.
Many were likely frustrated with a prolonged slide in the AVZ share price as the lithium price languished.
Now with a growing amount of consensus that the lithium bottom is in, the AVZ share price is now moving up the charts along with many other lithium players.
But a word of caution — the investor presentation says the company is target CY2023 for their first shipments.
That’s a fair way off.
Beyond the various difficulties, political or otherwise, that could emerge in the DRC before then, you should also consider that the current vaccine rollout is taking its time reaching developing countries.
From the outside, this could present some potential operational difficulties.
Which is why a small company profiled in this 2021 lithium report might be better positioned.
With operations in Europe, it could stand to benefit from a surge in EU government spending on renewables.
For Money Morning
PS: Is Lithium Ready for a New Bull Run in 2021? Free report reveals three stocks that could make serious gains. Download now.