4CE.AX stock analysis

4CE.AX (“Force”) signed a binding Heads of Agreement for Lithium projects in the DRC. The acquisition terms are quite favourable compared to AVZ Minerals (“AVZ”) where after all tenements are granted, this would lead to approx 100M shares being issued which would lead to 337.2M shares on issue in total. (42% dilution.)

It is very important to note that AVZ released results of 200m+ @ 1.57% Li2o. If you compare this to any company on the ASX, this exceeds any intercept at a grade higher than 1.5% Li2o which indicates enormous potential for a huge resource.
Force’s share price would likely be largely correlated with AVZ’s share price. That being said, if AVZ receives similar results for it’s other holes, then it would still constitute a large share price increase for Force.

If Force can demonstrate similar prospects to AVZ, then it would bag significantly to greater than 30c. (in my opinion)
It is also interesting to note that even though AVZ faces significant sovereign risk, this hasn’t caused a big noticeable issue to it’s share price. The reason I am putting a lot of emphasis on sovereign risk is that a lot of individuals think that it isn’t important. I understand that it’s cheaper labour etc in the DRC but recently, DRC’s neighbour, Tanzania recently ruled new government policy which allowed it to gain a free 16% interest in projects and caused a takeover to tumble in Cradle Resource (see CXX.AX) which had a significant niobium resource and a share price fall of 76% (from 33c to 8c before bouncing back recently to 12c.)

Also note that AVZ only has 60% ownership while Force has managed to get 70%.