The AVZ Minerals Ltd (ASX: AVZ) share price may have ended the last financial year suspended, but that couldn't stop it from absolutely smashing the market during the 12 months.
The lithium developer's shares rose from 16 cents to 78 cents over the period, recording a whopping 388% gain for investors that were lucky enough to snap them up at the start of it.
Why did the AVZ share price smash the market?
There were a number of catalysts for the outperformance of the AVZ Minerals share price.
This includes its inclusion in the illustrious ASX 200 index, optimism over its Manono Lithium and Tin project, and booming lithium prices.
In respect to the latter, lithium prices have been breaking records in 2022 amid supply constraints and insatiable demand for the white metal from electric vehicle manufacturers. This has sparked hopes that when AVZ finally commences production, it will be generating significant free cash flow.
Will FY 2023 be just as good?
What happens in FY 2023 will depend largely on a couple of factors.
The first is the future price of lithium. Analysts at Goldman Sachs are predicting a sharp decline in lithium prices in the coming years. So, by the time that AVZ does start selling the battery material ingredient, it may not be commanding prices anywhere near what Pilbara Minerals Ltd (ASX: PLS) is receiving today. This could put pressure on the company's shares.
There's also something else to worry about before then. Something even bigger. That is the company's ownership of the Manono Lithium and Tin project in the Democratic Republic of the Congo.
The reason the AVZ share price was suspended for the final month of the financial year was its court battle with Jin Cheng Mining. There are concerns that if things don't go to plan, the company could ultimately be left with just a 36% ownership of the project. This would have obvious consequences for the valuation of the company and its shares.
All in all, the next 12 months certainly will be interesting. But only time will tell if the company's shares are market-beaters again.
