AVZ share price remains on ice following legal update

This lithium share has been out of action for some time. Is a return approaching?

| More on:
A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AVZ Minerals Ltd (ASX: AVZ) share price hasn't moved a muscle for five and a half months.

But that doesn't mean nothing is happening behind the scenes at this embattled lithium explorer.

In fact, this afternoon the company revealed that its legal team have been very busy recently.

What's the latest from AVZ?

This afternoon the company released an update on the arbitration proceedings that have led to the suspension of the AVZ share price.

AVZ is facing arbitration proceedings from China's Jin Cheng Mining in relation to a dispute in the ownership of the Manono Lithium Project in the Democratic Republic of Congo (DRC). Jin Cheng claims it owns a portion of the project, whereas AVZ denies this.

According to today's update, the arbitrator has issued the Procedural Order No.1-3 ruling in favour of AVZ.

This is a small positive for AVZ but doesn't really change anything. The company notes that the arbitrator "will now proceed to hear and determine AVZI's jurisdictional challenge (around whether AVZI's pre-emption rights were breached) before dealing, if necessary, with the merits of the case."

What else?

AVZ also notes that there was a tribunal held late last month in the DRC that it wasn't invited to.

Unfortunately, the DRC Tribunal granted a request by Dathomir Mining Resources for the interim suspension of the sale of a 15% interest in the Manono Lithium Project to AVZ.

And while AVZ has dismissed Dathomir's request as "factually and legally misconceived," it certainly creates more doubt over the company's ownership.

AVZ disputes this, stating: "AVZI duly completed each of the Dathomir SPAs in August 2021, including payment within the required time period, and thereby legally acquired a further 15% interest in Dathcom."

As far as the company is concerned, it "retains legal title to a 75% interest in the Manono Project and its pre-emptive rights over the balance of the Project."

Though, given how the DRC is regarded as one of the most corrupt countries in the world (just a few places above North Korea!), it may be wise to not count your chickens before they hatch.

When will the AVZ share price return to action?

No changes have been made to its suspension request, which expires on 1 November.

However, it appears highly unlikely that this matter will be resolved within the next two weeks, so yet another an extension may be requested when the times comes.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Materials Shares

Could these 3 ASX materials shares be set to double?

This broker has buy ratings and aggressive price targets for these holdings. 

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Materials Shares

Rio Tinto shares on watch after naming new CEO

The mining giant has found its new leader.

Read more »

Three miners looking at a tablet.
Materials Shares

How much upside does Macquarie project for South32 shares?

The miner faces more headwinds, but the broker maintains its optimism.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Why are South32 shares sinking 5% today?

Let's see what is weighing heavily on this mining giant's shares today.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Materials Shares

How much upside does Macquarie forecast for Pilbara Minerals shares?

Is the broker bullish or bearish on this lithium giant? Let's find out.

Read more »

Group of miners working at a coal mine with one smiling and holding up a piece of coal.
Materials Shares

How much upside does Macquarie project for South32 shares?

Is this miner's luck about to change?

Read more »