AVZ Minerals to increase stake in Manono project in the DRC
Mineral exploration company AVZ Minerals has revealed that it will boost its equity stake in the Manono lithium/tin project, in the Democratic Republic of Congo (DRC), to 75% in a $15.5-million share sale purchase agreement.
The ASX-listed company will buy an additional 10% equity stake in the project from its joint venture partner, Dathomir Mining.
Under the agreement, AVZ has paid $500 000 to Dathomir Mining as an advance payment. The remaining $15-million will be paid at any time within 12 months of the agreement being executed, or as soon as AVZ secures a minimum of $50-million project financing.
“This additional equity in the Manono project will add significantly to the project’s bottom line and net present value (NPV) and is critical to AVZ’s ongoing discussions with prospective financiers,” said AVZ MD Nigel Ferguson.
Based on a 75% project interest, AVZ’s share of the project NPV, using a 10% discount, would increase from $616-million to $771-million.
“The recently completed definitive feasibility study clearly demonstrated our Manono project is very robust, with strong financial metrics,” added Ferguson.
On a 100% basis, the project has an NPV of more than $1-billion and an internal rate of return of 33%.
The study, released in April, estimated that Manono will produce 700 000 t/y of high-grade lithium and 45 475 t/y of primary lithium sulphate over 20 years. The project will require a capital investment of $545.5-million.
source: Mining Weekly
