Tag: Motley Fool

In late morning trade the S&P/ASX 200 Index (ASX: XJO) has given back its early gains and is tumbling lower. At the time of writing, the benchmark index is down 0.3% to 6,778.9 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

AGL Energy Limited (ASX: AGL)

The AGL share price is up 2% to $10.38 after announcing plans to split into two businesses – New AGL and PrimeCo. New AGL will be Australia’s largest multi-product energy retailer, leading the transition to a low carbon future. Whereas PrimeCo will be Australia’s largest electricity generator, supporting the economy as the energy market evolves. Management believes the proposed separation will give each business the opportunity to execute their own respective strategies and growth agendas.

Digital Wine Ventures Ltd (ASX: DW8)

The Digital Wine share price has jumped 24% to 18 cents. This morning the wine-focused technology investment company announced that it has entered into a foundation agreement with Bibendum Wine. It is one of Australia’s leading fine wine and beverage distributors. Under the partnership, Bibendum will list a substantial part of its portfolio of international and Australian wines and craft spirits on the company’s Wine Depot market.

REA Group Limited (ASX: REA)

The REA Group share price has risen 3% to $141.41. This appears to have been driven partly by a broker note out of Credit Suisse this morning. In response to its plan to acquire Mortgage Choice Limited (ASX: MOC), the broker upgraded REA Group’s shares from an underperform rating to a neutral rating.

Xero Limited (ASX: XRO)

The Xero share price has climbed over 3% to $126.93. This is despite there being no news out of the cloud-based accounting platform provider today. However, on Monday, Xero was the subject of a bullish broker note out of Morgan Stanley. It retained its overweight and lifted its price target to $140.00. The broker appears pleased with the company’s recent acquisitions of Planday and Tickstar.

More reading

• AGL (ASX:AGL) share price higher on structural separation plans
• Why the Digital Wine (ASX:DW8) share price is on ice
• ASX 200 dips lower, Webjet drops, REA bids for Mortgage Choice
• What’s happening with the Damstra (ASX:DTC) share price?
• Why Immutep, Inghams, REA Group, & Synlait shares are sinking

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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CleanSpace Holdings Ltd (ASX: CSX) shares are free-falling today after the company released a trading update for the second half of FY21. At the time of writing, the CleanSpace share price is tumbling a whopping 50.11% to $2.21. Let’s take a look at what the company announced.

CleanSpace share price plummets on trading update

The CleanSpace share price has experienced a brutal sell-off this morning following the company’s latest trading update. CleanSpace shares also took a dive late last month after the company’s half-year results highlighted the impact of COVID-19 on current market conditions.

At the time, the company noted that there had been a shift from reactive buying to more considered purchasing of personal protective equipment (PPE). While CleanSpace said it was well-positioned for this shift, offering cost advantages and high protection, this move was expected to impact sales in the second half. 

Today’s update has confirmed this impact and sent the CleanSpace share price spiralling downwards. The business has experienced lower sales over the current quarter and CleanSpace now expects Q3 FY21 sales to be approximately $7 million. The company blames a sudden shift in North American healthcare procurement, driven by a number of compounding factors such as the acceleration of vaccine rollout programs, spending constraints and the stockpiling of low-tech disposable masks. 

The announcement attempts to reassure investors that the business is confident it will return to historically strong growth rates over the medium term. CleanSpace is making a significant investment in its sales strategy and market presence by doubling its regional sales capability, opening new distribution channels and aggressively targeting new sectors less impacted by vaccine rollouts. 

The update also points out potential tailwinds such as US President Joe Biden’s package to introduce a platform for increasing the quality of PPE and pandemic preparedness for present and future outbreaks. CleanSpace believes that government intervention in such areas has proven to be a powerful force in shaping purchasing decisions. 

Despite the positive medium to long-term implications for the PPE space, it appears that the market is far from impressed with the company’s weak sales performance over the current quarter. The CleanSpace share price has lost more than half its value in a little over an hour of trading.

CleanSpace shares are now down more than 70% over the past 12 months and around 67% year to date.

More reading

• These small cap ASX shares could be ones to watch in 2021

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CleanSpace Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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 The Strategic Elements Ltd (ASX: SOR) share price is trading higher today after news the company’s self-charging batteries can be flexible. Its battery technology has been made into a flexible cloth, which can be bent without faulting.

The Strategic Elements share price opened up 3.57% today, trading at 44 cents. However, at the time of writing, the share price has retreated slightly and is currently trading for 42 cents, down 1.19%. 

Let’s look further into this morning’s news from Strategic Elements.

Flexible future

The company announced it has made its self-charging batteries into a textile form. In this form, the batteries are put through their paces and can be bent without damaging the battery and causing minimal changes in voltage. 

The company said bending strain often caused cracks on functional films, which tends to make flexible electronics malfunction. To make sure its self-charging batteries won’t crack, it was bent over 2000 times. It can bend up to a 6mm radius, which is smaller than the average adults’ finger.

Strategic Elements’ self-charging batteries work by using Battery Ink technology, receiving charge from the humidity in the air and on skin.

As the flexible battery can be charged with skin, it could be perfect for use in electronic skin patches and flexible electronics, said the company.

According to Strategic Elements, the electronic skin patch sector made US$10 billion in 2019. A figure that’s expected to quadruple by 2032.

In addition, Strategic Elements’ Battery Ink technology is being developed in collaboration with CSRIO and the University of New South Wales. It is also partially funded by a Federal Government grant.

The next step is to shrink the batteries. The company’s goal is to make the self-charging batteries 4 times smaller than existing battery ink cells.

Strategic Elements’ share price snapshot

Strategic Elements’ latest news is powering up its share price once more, adding to its fantastic year on the ASX. The company’s share price has currently risen by 81.25% year to date. It is also up 987.5% over the last 12 months.

The company has a market capitalisation of around $158 million, with approximately 378 million shares outstanding.

More reading

• Strategic Elements (ASX:SOR) share price rises after latest announcement

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Maggie Beer Holdings Ltd (ASX: MBH) share price will be one to watch when it returns from its trading halt.

This follows the announcement of a major acquisition and accompanying capital raising.

What did Maggie Beer announce?

This morning the premium food and beverage company announced an agreement to acquire Hampers & Gifts Australia.

According to the release, Hampers & Gifts Australia is the company behind the Hamper Emporium and Gifts Australia ecommerce businesses. These businesses are forecast to generate revenue of $36.4 million and EBITDA of approximately $9.1 million in FY 2021.

Management believes the acquisition fits strategically into its ecommerce and digital transformation strategy and expects it to be immediately earnings per share accretive. After which, synergies and growth initiatives are expected to deliver strong EBITDA growth in FY 2022.

What will it cost and how will it be funded?

The release explains that the two parties have agreed an acquisition price of $40 million, which will be split evenly between cash and shares.

The deal will also include a base earnout of $10 million. This will be paid subject to the new businesses achieving no less than $10 million in EBITDA for the financial year ending 30 June 2023. Once again, this will be split evenly between cash and shares.

In addition, the vendors will be entitled to an additional $1 million for every increase of $1 million in EBITDA (up to a maximum of $5 million) over and above the base earnout amount.

To fund the acquisition, Maggie Beer is aiming to raise $30 million via a capital raising at 35 cents per share. This represents a 4.1% discount to its last close price.

This will comprise a placement of $10.9 million and a pro rata accelerated, non-renounceable entitlement offer to raise approximately $19.1 million. The latter is intended to be fully underwritten.

Maggie Beer’s CEO, Chantale Millard, said: “It is a key strategy of the MBH Group to grow its e-commerce and direct to consumer business. This exciting opportunity will allow us to do this whilst partnering with a fantastic e-commerce hamper and gifting business, which has an amazing team and is very profitable and cash generating. It will help us transform the MBH Group and move it to its next level of growth.”

More reading

• The Strategic Elements (ASX:SOR) share price is riding on its latest news
• Facebook poised to shoot 32% higher, says analyst
• ASX growth shares will be VERY slow to recover. Here’s why
• Australia’s first cryptocurrency fraud case filed to the Federal Court
• Race (ASX:RAC) share price falters despite positive update

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

A strong performer on the stock exchange since its 2012 initial public offering (IPO), Facebook, Inc (NASDAQ: FB) is well positioned to do even better. That’s according to a new analysis of the stock from analyst Lloyd Walmsley at Deutsche Bank, who has raised the target price of the shares to a new “street high.”

Walmsley’s new level is $385, from the previous $355. The former is more than 32% above Facebook’s most recent closing price. He’s maintaining his buy recommendation on the stock.

The prognosticator believes that ad spending, a crucial source of revenue for the company, will see a rise. He also feels that worries about upcoming changes Apple Inc (NASDAQ: AAPL) is making to its user privacy settings will become less of a factor in market sentiment.

“We think investor focus is starting to shift away from fears around iOS changes toward a continued ad recovery and benefits from more eCommerce activity shifting into Facebook’s platform,” Walmsley wrote in his research note explaining the price target hike.

Facebook already has a massive user base, so it can’t rely on significant improvement in those numbers to drive its business forward. Rather, it will be reliant on expanding advertising take and other revenue sources for meaningful growth.

Walmsley thinks that it has several levers it can pull for this, including the Tik Tok-like Reels video feature on Instagram. He’s estimating that Reels can potentially pull in $21 billion in revenue.

Investors seem to be buying this argument. On Monday, Facebook shares trounced the S&P 500 Index (INDEXSP: .INX) by rising to close 2.8% higher on the day.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors.  The Motley Fool owns shares of and recommends Apple and Facebook. The Motley Fool recommends the following options: long March 2023 $120.0 calls on Apple and short March 2023 $130.0 calls on Apple. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Better Buy: Facebook vs. Twitter
• 2 top ASX ETFs to buy right now
• I want to double your money every 5 years: fundie
• How to counter the ASX 200’s Achilles heel
• Battle of dividend stocks: Microsoft vs. Apple

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Eric Volkman owns shares of Apple and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Facebook and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. The Motley Fool Australia has recommended Apple and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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ASX growth shares have had an ordinary time of late, with the S&P/ASX All Technology Index (ASX: XTX) dropping more than 16% since its February high.

On Monday alone, the index fell 2.61%.

For many of the 435,000 Australians who bought shares for the first time last year, this will be the first time they experience losses.

It’s a costly lesson for the rookies, according to Bell Potter director of institutional sales and trading Richard Coppleson.

“A few months ago, this cohort of investors was stuffing their pockets with ‘upside momentum’ stocks, thinking valuations for everything they bought could only climb,” he told subscribers to his Coppo Report.

“You can sense that many retail punters are feeling stock market pain for the first time… For many, this experience will be completely bewildering.”

Unfortunately, in the long run, it’s not just the novices that will suffer. 

According to Coppleson, the future is now dire for growth stocks.

ASX growth share recovery will be hampered

Coppleson told his subscribers that each growth stock would have a massive crowd of disillusioned novice shareholders seeking to exit their positions.

But they don’t want to do it at a loss, so they’re waiting for the stock price to return to their purchase price.

“Some who bought higher will wait until they get back to their entry level and then sell – and they’ll be happy to get their money back before moving on,” he said. 

“But it means that with every rally from now on, there will be walls of selling that will slow the rebounds.”

So even when good news arrives, and a price spike is justified, it will be structurally dampened. A wave of shareholders wanting to sell out will always cancel out any prevailing enthusiasm for the stock.

“Most stocks will not bounce back in a ‘V’ but will hopefully rise very slowly – so slowly that they may look boring.”

Patience is the only way

Coppleson reminded his subscribers that playing the long game is the only way to build wealth.

“Investing is not easy. It’s hard, takes patience, and the market always has a way of humbling you,” he said.

“The market has an amazing ability to crush the hubris of those who claim an ability to ‘time the market’ or who maintain that buy-and-hold is for losers – they often then suffer a period of getting it unbearably wrong soon after professing such things.”

This is because no one is a fortune teller who can time the market.

“With all investing, if you think it can only go one way, then it suddenly turns – and you believe you’ll be able to get out before it goes south – you’re in a delusional fantasy land.”

For example, Coppleson has owned Afterpay Ltd (ASX: APT) for many years and has “a long-term vision” for the business.

“I have been able to absorb the body blows that come with these stocks and have withstood many -30% selloffs along the way,” he said.

“If you’re a buy-and-hold investor, the rallies are satisfying to see, but the selloffs are also tolerated as just being part of the voyage that you are on.”

The one hint that a correction may come is when share prices double in a very short space of time.

“Like Zip Co Ltd (ASX: Z1P), which went from $5 to $14.70 in just a few months. This was just too fast, and as I said when it hit $14, it was close to a big pullback,” said Coppleson.

“Back in December when the stock was trading at $5.20 and it looked terrible, I pushed as a BUY for the first time ever.”

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Afterpay (ASX:APT) share price sinks despite new product launch
• Why is the Zip (ASX:Z1P) share price down 30% this month?
• Are there any bargains when everyone knows everything?
• ASX 200 Weekly Wrap: ASX 200 gets its mojo back

Tony Yoo owns shares of AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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 A cryptocurrency fraud case has been filed to the Federal Court of Australia. It is believed to be a first for Australian law. The complainant is Alexandre Raffin, is accusing Modern Assets Australia and its directors Jonathan Allison and Carlo Sciubba of breaching their duty of care. Modern Assets Australia is a Gold Coast-based investment company that deals in cryptocurrency. Consequently, Raffin believes this alleged breach resulted in him being scammed out of $93,000

Let’s dive deeper into the case.

Alexandre Raffin v Modern Assets Australia Pty Ltd & ORS

According to ABC News, Raffin approached Modern Assets to purchase South Korean cryptocurrency, Klatyn.

Allegedly, a disagreement between the two parties meant the deal fell through. Raffin claims that Modern Assets then put him in touch with its supplier of Klatyn.

After communicating with the supplier, Raffin states he handed over $93,000. This amount was to be exchanged for 937,000 units of Klatyn. Instead, the person disappeared with Raffin’s money.

Raffin runs a brokerage firm called GAINS Associates. He says the money lost, in what he considers a scam, belonged to his firm’s clients. Due to this, Raffin paid the clients back from his own pocket.

He told ABC News he is now seeking to recover the $93,000. In addition, Raffin is seeking an additional $800,000 as that would have been the cryptocurrency’s worth in August 2020.  

A spokesperson from Modern Assets also spoke to ABC News, saying the investment company denies and will be defending all allegations.

Australian national charged with securities fraud in New York

This is the first cryptocurrency fraud case on Australian soil. However, an Australian was charged with fraud over his cryptocurrency investments in the United States.

In February this year, Stefan He Qin was charged with one count of securities fraud. Furthermore, he plead guilty in a Manhattan federal court.

Qin was found to have taken money from a cryptocurrency-based investment fund he owned. Using it for personal expenses and investments. He then faked data to fool investors into believing their cryptocurrency investments were gaining in value.

All up, Qin was found to have scammed over US$90 million.

Cryptocurrency scams on the rise

According to the Australian Securities and Investment Commission (ASIC), COVID-19 brought with it a rise in cryptocurrency scams targeting Australians.

ASIC reportedly saw a 20% increase in Australian’s becoming victims of cryptocurrency scams. It warns that recovering money from cryptocurrency scams is particularly difficult and rarely successful.

The Australian Government has created a resource for those worried about cryptocurrency scams.

More reading

• ASX 200 dips lower, Webjet drops, REA bids for Mortgage Choice
• Will the ASX 200’s ‘China problem’ get worse?
• Why the St Barbara (ASX:SBM) share price is climbing
• Why top brokers want you to buy the embattled IAG (ASX:IAG) share price
• Why the South32 (ASX:S32) share price is outperforming today

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Race Oncology Ltd (ASX: RAC) share price is struggling in early-morning trade despite the company announcing the initiation of an extramedullary AML preclinical study. At the time of writing, the specialty pharmaceutical company’s shares are trading flat at $3.84 after falling by around 2% in earlier trade.

What did Race announce?

Investors appear unfazed by the company’s latest announcement, leaving the Race share price currently unchanged.

According to this morning’s release, Race has entered into a collaborative preclinical research program with The University of Newcastle. This partnership agreement aims to support the use of Bisantrene in the treatment of extramedullary acute myeloid leukaemia (AML).

Extramedullary AML is considered to be a rare and serious illness with about a 25% survival rate over a 5-year term. The life-threatening disease occurs when the leukaemia spreads from the bone marrow and forms solid tumours in tissues such as the skin, breast, kidney, brain, or other organs.

Race noted that a prospective positron imaging trial conducted in 2020 identified up to 22% of AML patients having extramedullary AML.

Furthermore, a recent phase 2 clinical trial undertaken at the Sheba Medical Centre found Bisantrene to be highly-effective in subjects with extramedullary AML. This is particularly pleasing for the company as there are limited treatment options available.

Once data is collated, Race will seek to move into a phase 2/3 trial of Bisantrene in extramedullary AML patients. It hopes that the United States Food and Drug Administration (FDA) will push ahead with a rapid pathway for approval of Bisantrene as an orphan drug.

Race chief scientific officer Dr Daniel Tillett commented:

This is a key project for Race using Associate Professor Verrills’ extramedullary AML mouse model. Recent clinical evidence has identified Bisantrene as an effective treatment option for patients with the difficult-to-treat extramedullary form of AML.

We believe that we have identified a low-risk pathway to rapid approval of Bisantrene via this indication that offers significant upside for Race in a crowded clinical space.

About the Race share price

The Race share price has gained over 1,500% in the past 12 months and is up by almost 100% year to date. It’s worth noting that the company’s shares reached an all-time high of $4.23 earlier this month.

Based on the current share price, Race commands a market capitalisation of around $531 million, with 138.4 million shares outstanding.

More reading

• Up 1,460% in a year, why the Race Oncology (ASX:RAC) share price is sliding today
• Race Oncology (ASX:RAC) share price slides on a new melanoma preclinical study
• Race Oncology (ASX: RAC) share price higher on preclinical breast cancer results
• Subreddit ASX Bets is gambling these 4 ASX shares will follow in GameStop’s footsteps

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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Early yesterday morning, Openpay Group Ltd (ASX: OPY) requested a trading halt from the ASX ahead of Monday’s session. The halt was expected to remain in place until Wednesday this week or until an announcement was released. Since then, the self-dubbed ‘buy now, pay smarter’ payment solution provider has announced a material partnership.

However, the Openpay share price remains halted at $2.41 following the announcement.

Expanding with Worldpay

According to the release, Openpay and its US business, Opy USA, have secured an agreement with the global payments provider Worldpay.

For those unfamiliar with Worldpay, it is a payment processing company owned by Fidelity National Information Services Inc (NYSE: FIS). In the latest quarter, FIS recorded US$3.3 billion in revenue from providing banking, merchant, and capital market solutions.

Under the newly signed agreement, Openpay and Worldpay will collaborate to offer flexible ‘buy now, pay smarter’ payment products and other solutions to merchants and customers in regions where Openpay operates.

To do this, Worldpay will integrate Openpay products onto its payment gateway. This will enable FIS merchants to quickly and seamlessly implement Openpay’s payment solutions.

The partnership with FIS will be used by Openpay to acquire merchants in the United States. Subsequently, other regions where the integration is made available will be used to expand the company’s merchant base. However, for now, the focus is on the US market.

Openpay share price chasing growth

The expansion with Worldpay comes only a week after the Openpay share price jumped on news of a partnership with EzyVet. The deal enables the ASX-listed company to break into the US$55.8 billion US and UK veterinary markets. EzyVet is a cloud-based practice management software for veterinary professionals, supporting over 40,000 licensed users. 

The collaboration with EzyVet means vet clinic customers will be offered Openpay’s payment solutions in any of EzyVet’s practices. It is evident through this partnership and yesterday’s announcement that Openpay is eager to continue expanding. 

Although, this isn’t exactly a surprise, given the outline in the company’s H1 FY21 results presentation. Openpay specified it was preparing to roll out core verticals of automotive and healthcare in the UK. Furthermore, the company’s third ‘pillar of success’ is to create large-scale, sustainable ecosystem partnerships. 

Despite the recent partnerships, the Openpay share price has proceeded to fall 28% from mid-February. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has dipped 1.2% over the same timeframe.

More reading

• Is the Affirm share price dragging ASX BNPL shares lower?
• Here’s why the Openpay (ASX:OPY) share price is charging 5% higher today
• Openpay (ASX:OPY) share price drops despite positive announcement
• Is Afterpay (ASX:APT)’s BNPL competition heating up?
• Why did the Openpay (ASX:OPY) share price slide today?

Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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The AVZ Minerals Ltd (ASX: AVZ) share price is pushing higher on Tuesday after announcing its second offtake agreement in as many days.

At the time of writing, the lithium focused mineral exploration company’s shares are up 5% to 22 cents.

What did AVZ announce?

This morning AVZ announced that it has secured a strategic, long-term offtake partner agreement with Yibin Tianyi Lithium Industry Co.

According to the release, the binding agreement is for the supply of spodumene concentrate (SC6) from the Manono Lithium and Tin Project in the Democratic Republic of Congo.

Yibin Tianyi is a leading global battery materials producer. It is continuing to expand its lithium hydroxide production capacity as a key participant in the supply chain of Contemporary Amperex Technology (CATL), the world’s largest lithium-ion battery maker.

The battery materials producer has agreed to purchase up to 200,000 metric tonnes per annum of SC6 for an initial three-year term following the commencement of production. It also includes an option to extend the agreement for an additional two years. Pricing will be determined by a formula which references various published market prices of lithium carbonate and lithium hydroxide products. It will also be underpinned by an agreed floor price.

This agreement means that more than 80% of the projected annual SC6 production from the Manono Project is now committed under long-term binding offtake agreements. Management notes that this satisfies an important condition precedent for prospective Project financiers.

Management commentary

AVZ’s Managing Director, Nigel Ferguson, said: “We are very pleased to conclude our discussions with Yibin Tianyi and to sign another binding offtake agreement for SC6 to a Chinese converter.”

“This agreement takes our SC6 binding offtake commitments to more than 80% of the Project’s annual SC6 production, which is a massive endorsement for the Manono Project and one that satisfies an important condition precedent for our prospective project financiers.”

Mr Ferguson also notes that SC6 prices are rising, which he feels bodes well for the upcoming Optimised Definitive Feasibility Study.

He explained: “At present, we are seeing buoyant market conditions with reported SC6 prices in China increasing circa 30% in the first quarter of the year while during the same time the LME cash tin price has surged circa 30% boding well for the Manono Project’s Optimised Definitive Feasibility Study which is due for completion next quarter.”

“Positive market sentiment is greatly assisting our negotiations and while we are not compelled to commit to further forward sales, we are continuing to explore strategic opportunities for our offtakes in both traditional and emerging lithium markets including Europe, US and India,” he concluded.

The AVZ Minerals share price is now up ~30% since the start of the year.

More reading

• Why AVZ, Betmakers, Santos, & South32 shares are storming higher
• Here’s why the AVZ Minerals (ASX:AVZ) share price is charging 7% higher
• The AVZ Minerals (ASX:AVZ) share price jumped 18% to a 52-week high today
• Why AVZ, Legend Mining, Nuix, & Vocus shares are surging higher
• Why the AVZ Minerals (ASX:AVZ) share price is surging 15% higher today

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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