Although it had one of its most eventful and positive weeks in a long time, the AVZ Minerals Ltd (ASX: AVZ) share price finished the week on a low today.
The lithium-focused mineral exploration company’s shares finished the day with a decline of 4.5% to 10.5 cents.
Why did AVZ Minerals’ shares sink lower today?
This morning AVZ Minerals once again had to release a response to a Twitter post from one of its paid advisors.
The Twitter post in question came from a principal of its strategic advisor Airguide International and involved a table comparing AVZ Minerals to a number of rival lithium miners.
The table presented information which included a mineral resource estimate and production cost estimates for AVZ Minerals.
This was done despite the fact the company has yet to report a mineral resource estimate in accordance with the JORC Code 2012 or technical studies involving production cost estimates to a level where it has reasonable grounds to disclose forecast financial information to the market.
Previously the same advisor leaked market sensitive images through Twitter and led to its shares being suspended for some time.
In April in a lengthy ASX query letter relating to the above, the company advised that it had asked the advisor “to refrain from disclosing any potentially market sensitive information, that has not been announced on the ASX Markets Announcements Platform, regarding the Company via Twitter or any other form of social media. The Company has also requested that any posts on Twitter in regard to AVZ be cleared by the Company prior to release.”
Clearly this hasn’t been adhered to.
Should you invest?
No. Asides from the fact that I am not convinced the Manono project will ever be viable, I cannot invest in companies which are run so poorly as AVZ Minerals.
While management may not to be to blame directly for this latest issue, it did choose to renew the contract of Airguide International in the aftermath of the first Twitter breach, so must accept some responsibility.
Instead of AVZ Minerals I would suggest investors gain exposure to lithium through miners such as Galaxy Resources Limited (ASX: GXY) or Orocobre Limited (ASX: ORE). But once again, it is worth remembering that they are high risk investments as well.
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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.