RE: Heavy dilution at 50% discount!1 Feb 2023 08:50
RE: Blesberg. Why/ how did AVL get
it so wrong at Blesberg?
Dear Jason
I will try and answer your question as best I can. My
memory is not 100% and many of the exact dates and
numbers I will need to double check
1. As Peter Hibberd has said I don't think AVL had
much if any experience with pegmatites/ pegmatite
orebodies. The Main shareholder/ investor was
Les ???, a nice Australian fellow, but totally green
in mining with most his money and experience
coming from property development (! was sure he
said). Les trusted Vince hugely and Vince was
AVL's CEO and a fast talking ex South African
geologist who had gift of the gab and had been
coming here the past couple years looking for
attractive investment properties
2. AVL/ Vince had been in the paper and internet
often with journalists and analysts questioning his
high annual salary! package (+ $AU 300k pa?) for
an underperforming junior miner. The Lithium
market was running (this was 2016 2017) and a
fellow South African geologist who knew of us and
Blesberg informed Vince of it. Before the SA geo
had even finished his DD technical report, he was
off to Zimbabwe on a big lithium job and Vince just
said, "Let's do the investment anyways" and they
signed the Term Sheet, paid the money and
brought a younger, greener geologist than even
Vince over to SA to project manage Blesberg.
3. The lithium price world-wide was strong and
expected to go much stronger. Vince felt Blesberg
would give his company AVL a real good positive
cnin and rnicn tho chara nrinn and ant auoniona off.
3. The lithium price world-wide was strong and
expected to go much stronger. Vince felt Blesberg
would give his company AVL a real good positive
spin and raise the share price and get everyone off
his back
4. We all started out great friends and associates, but
as the months went by, we (Mergence Corp
Solutions and Peter Hibberd) found we weren't
being consulted about the Work Program and
accompanying expenditure. The Term Sheet said
R10m had to be put into the ground for 20% equity
I believe. But as Peter Hibberd said - AVL went
and got a South African driller (with a poor
reputation) who really let them down with
equipment breaking down all the time and other
delays. The went thru another 2 drillers - finally
ending with the one we'd recommended at the
start.
5. AVL never did any diamond drilling and although
we knew Blesberg had a real nugget effect on it's
tantalum and spodumene ore, we still all believed
the occasional core drilling as we had planned
(every 4 th or 5 th hole I think) was going to tell us
'so much' about the orebody.
6. The driller, drill pattern and location - and all else
ended up being totally decided from Ozz- or by
their young ex pat geo. Not by the BLesberg
management, peter Hibberd and I and others.
7. Some very high grade tantalum and spodumene
was intersected - but it was a bit random.
Reverse circulation drilling left a lot to be desir
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