AVZ Minerals Ltd (ASX:AVZ) share price slammed on infrastructure worries

One of the worst performers on the Australian share market on Monday has been the AVZ Minerals Ltd (ASX: AVZ) share price.

In afternoon trade the lithium-focused mineral exploration company’s shares are down 12.5% to 12.7 cents. This means AVZ Minerals’ shares have now lost almost half of their value over the last three months.

Why are AVZ Minerals Ltd’s shares sinking lower?

This morning AVZ Minerals released further drilling results from its Manono project in the Democratic Republic of the Congo.

While the grades uncovered in its latest drilling were positive once again, investors have focused more on a comment on infrastructure at the operation.

As I have said numerous times before, I have always had concerns about the viability of the Manono project due to how far away from the coast it is in a relatively dangerous country with poor infrastructure.

Within today’s release, management advised that it is investigating land transport options to ports to establish the most reliable, quickest, and most cost-effective means of moving product from Manono to international customers.

The three potential options include Manono to Dar es Salaam Port in Tanzania, Manono to Lobitu Port in Angola, and Manono to Durban Port in South Africa.

Management warned that the freight costs to port may be a significant operational cost and warrants due consideration of options prior to progressing into the feasibility study stage.

However, it did add at the end that it is “committed to moving ahead with the Manono Lithium Project and will keep the market updated as to the outcome of the transport study.”

Should you buy on this weakness?

I would stay well clear of AVZ Minerals until the completion of the feasibility study stage. Despite the asset being potentially world class, it may yet prove unfeasible.

Because of this I would sooner gain exposure to lithium through proven producers such as Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE). Though, both these producers are still reasonably high risk investment options.

If the lithium miners are too risky for you then check out this tech investment boom which could create the first trillionaire.

This “Holy Grail” Technology Could Produce World’s First Trillionaire

One of the world’s richest people is sounding the alarm on what could be a trillion-dollar technology.

And when a tech billionaire – several times over – speaks, it pays to listen.

This could be your chance to get in on the ground floor!

Click here to discover a $19.9 trillion dollar idea — hidden in plain sight!

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!