AVZ Announces Quarterly Activates for the period ended 30 Sept 2021.

AVZ Minerals Limited (ASX: AVZ, “the Company”) presents its Quarterly Activities Report for the period ended 30 September 2021 and is pleased to provide the following commentary and update to shareholders.
AVZ Managing Director, Mr. Nigel Ferguson said: “The cornerstone investor deal with CATH marked one of the most significant days in our Company’s short history and clearly indicated to the world how important our Manono Lithium and Tin Project is.”
“AVZ is very excited to have someone of the calibre of Mr. Pei Zhenhua and Contemporary Amperex Technology Limited (“CATL”) as partners in our strategic objective to make the Manono Project a leading global producer of lithium products.”
“Both Mr. Pei and CATL clearly have the financial capacity, technical expertise and global credibility within the lithium conversion and lithium-ion battery industry to complement our world-class Manono Project.”
“The deal with CATH will fund a significant portion of the total required project financing, whilst AVZ maintains a controlling 51% interest in the Manono Project and our position as lead developer. The deal also provides significant opportunities to advance other downstream projects, providing an exciting future for AVZ shareholders.”
“From a licensing and permitting perspective, I remain confident that our excellent relationship with the Government of the Democratic Republic of Congo will soon deliver our all-important Mining Licence, Collaboration Development Agreement, Hydro-Electric Power Plant Agreement, and shortly thereafter, our Manono Special Economic Zone Agreement.”
“The granting of our Mining Licence will facilitate the release of our Bankable Feasibility Study and shortly, we will also be in a position to announce the appointment of a Mandated Lead Arranger to lead the syndicated debt funding facility for the Manono Project.”
“Once the deal with CATH is finalised, the Board will be able to make a Final Investment Decision which will kick-start project construction and ensure Dathcom will have sufficient equity capital to fund the first six to eight months of project construction capital with Financial Close for debt
financing expected mid-2022.”
Cornerstone investor secured for development of Manono Project In late September, AVZ announced its wholly owned subsidiary, AVZ International Pty Ltd (“AVZI”) had entered into a Transaction Implementation Agreement (“TIA”) with Suzhou CATH Energy Technologies (CATH) to develop the Manono Project.
Under the TIA, CATH will pay US$240 million cash for a 24% equity interest in the ManonoProject, as well as their pro rata portion of project development capital. (See ASX Announcement 27 September 2021 – “Cornerstone investor secured for development of Manono Lithium and Tin Project”) Completion of the TIA is subject to the satisfaction or waiver of several conditions precedent before 30 November 2021.
CATH is a private investment entity jointly owned by Mr. Pei Zhenhua and Contemporary Amperex Technology Co. Limited (“CATL”), who both have significant influence in the global lithium conversion and lithium-ion battery industry.
Proceeds from the transaction will fund a significant portion of the total project financing that is required for the Manono Project, with AVZ retaining a controlling interest and its position as lead developer of the project.
AVZI and CATH have also agreed to evaluate and progress a study to expand Dense Media Separation capacity (“Expansion Scenario”).
On completion of the Expansion Study scenario, the results will be considered by AVZ management and the Manono Project joint venture partners, prior to any decision to increase throughput above that stated in the Definitive Feasibility Study (“DFS”). (See ASX Announcement 29
September – “Expansion Scenario – Manono Lithium and Tin Project”).

Highly successful $A40 million Share Placement In early July, the Company completed a highly successful Share Placement, comprising the issue
of 307,692,308 new shares at an issue price of $0.13 per share to raise A$40 million (before
costs).
The Share Placement was well supported by high-quality institutional investors in Australia, Europe, North America, Singapore, Malaysia and the Middle East.

Proceeds from the Share Placement increased AVZ’s cash reserves, allowing it to (i) increase AVZ’s equity in the Manono Project from 60% to 75% (post completion of the transaction), (ii) negotiate project financing with an enhanced balance sheet position, (iii) assist to establish a working capital and contingency cost buffer during project development and (iv) enhance AVZ’s early capital works program before a Final Investment Decision is made.

Project equity increased to 75%
AVZ increased its interest in the Manono Project from 60% to 75% by exercising the options to purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20M (~AUD$27M). Share certificates have been awarded and registered at the courts in the DRC.
Upgraded JORC Proved and Probable Ore Reserves
On 14 July 2021, the Company announced an upgraded JORC Ore Reserve at Roche Dure. JORC Proved and Probable Ore Reserves are now estimated at 131.7Mt – an increase of 41.6% from the 93Mt reported in the April 2020 DFS. The Ore Reserves estimate contains 65.0Mt of
Proved Category and 66.6Mt of Probable Category.
The average lithium grade increased by 3.1% from 1.58% to 1.65% Li2O while the tin grade of 990 ppm remained the same but reported a 41% increase in contained tin metal to 130.3kt.
The Life of Mine was extended to 29.5 years based on a 4.5Mtpa operation underpinned by the Ore Reserves – representing an increase of 47.5% from the April 2020 DFS.

Permis d’Exploitation (“Mining Licence”), Collaboration Development Agreement, Mpiana Mwanga Hydro-Electric Power Plant (“HEPP”) Agreement and Manono Special Economic Zone (“MSEZ”)
All documentation relating to AVZ’s Mining Licence was submitted to relevant authorities in the DRC Government in May 2021, with the Company receiving favourable outcomes in relation to its (i) environmental approvals, (ii) proof of financial capability and (iii) favourable cadastral opinion. The Department of Mines has provided favourable feedback in relation to the technical opinion on the DFS. The Minister of Mines has 30 days to award the Mining Licence following receipt of a favourable technical opinion.
As previously advised, a meeting of Council of Ministers is expected to be held shortly to deliberate on the award of the HEPP Agreement and Prime Ministerial Decree for the Collaboration Development Agreement.
PLS conversion to Lithium Hydroxide PFS
A pre-feasibility study to produce lithium hydroxide from primary lithium sulphate was awarded to Noram Engineering and Constructors Ltd.
The information from the PFS will assist to identify the preferred global location for a lithium hydroxide conversion facility, fed with product from Manono.
Early-stage discussions occurred with interested parties in various jurisdictions wishing to partner with AVZ in the development of a lithium hydroxide facility, where it is intended that AVZ will maintain a controlling interest.
Bankable Feasibility Study (“BFS”)
AVZ has advised it will issue a BFS to the market once the Company has been granted a Mining Licence for the Manono Project. The Company made the decision to issue a BFS rather than an updated Definitive Feasibility Study as the financial instititions require a bankable level study being submitted which must include the award of the Mining Licence for the Manono Project.
During the September quarter, the Front End Engineering Design (“FEED”) Study, process plant design and site geotechnical investigation studies were all completed. The FEED study has better defined the indicative Capital and Operational Costs of the Manono Project which will be included in the BFS.

Project Funding Discussions
AVZ’s management team was actively engaged during the September quarter with various commercial banks, finance brokers, private equity investors and non-commercial lenders such as Pan-African Development Finance Institutions (“DFI’s”) to progress debt and equity funding
agreements for the development of the Manono Project.
Carriere de l’Este deposit confirmed a likely rival to Roche Dure Resource drilling of four new, widely spaced ‘step-out’ holes at the Carriere de l’Este deposit confirmed further high-grade lithium and tin mineralisation directly beneath thin soil and laterite cover.
The drill data confirmed the presence of sub-cropping spodumene mineralisation at Carriere de l’Este up to 1.2 kilometres long at average widths of 200 metres in places, confirming the deposit as a likely rival to Roche Dure. (See ASX Announcement “Assays from Carriere de l’Este drilling
confirms deposit a likely rival to Roche Dure – 16 August 2021).

Corporate
The Company closed the September quarter with a cash balance of A$10.03 million. Cash for the September quarter was used to fund the project development activities of the AVZ corporate and technical team in Perth and the Dathcom corporate and technical team in the DRC, including:
• A$1.24 million for payroll, administration and corporate costs (including an amount of A$0.245 million paid to directors in relation to employment and consultancy service agreements);
• A$2.44 million was capitalised as exploration and evaluation costs to the Manono Project; and
• A$27 million for the exercise of options to increase AVZ’s interest in the Manono Project from 60% to 75%. In September 2021, the Company issued 16,675,000 performance rights to employees and consultants under its Performance Rights Plan and advised it was planning to issue 31,750,000
performance rights to Directors, subject to shareholder approval at the Company’s 2021 Annual General Meeting to be held on 18 November 2021.