AVZ Minerals completes US$240 million cornerstone investment
ASX-listed AVZ Minerals on Wednesday reached an agreement with private investment firm Suzhou CATH Energy Technologies over a $240-million investment into the Manono lithium and tin project, in the Democratic Republic of the Congo (DRC).
The two companies in September last year struck a deal under which CATH will earn a 24% equity interest in a multi-faceted joint venture to develop the Manono project for a $240-million cash payment, and a further amount to fund its pro-rata portion of funding to develop the project.
AVZ Minerals said on Wednesday that the parties have now agreed to waive a number of the conditions precedent, including the mining licence for the Manono project being granted to Dathcom Mining SA, the entry by Dathcom and the DRC government into the collaboration development agreement, and the Dathcom board and shareholders making a final investment decision and approving the transaction.
It is anticipated that completion of the proposed transaction will occur during March 2022, allowing for the start of a multi-faceted global joint venture between AVZ and CATH focussed on multiple aspects of the battery metals supply chain.
“Finalising our agreement with CATH provides certainty of funding to progress development of the Manono project, pending the award of our mining licence and collaboration development agreement from the DRC government,” AVZ MD Nigel Ferguson said.
“We are in close consultation with the DRC government authorities that are undertaking the mining licence assessment and are confident of delivering a favourable outcome for all stakeholders – most importantly the people of the DRC and our shareholders.”
A definitive feasibility study into Manono has estimated that it would produce around 700 000 t/y high grade lithium and 45 475 t/y of primary lithium sulphate over a 20-year mine life.
The project is expected to require a capital investment of $545.5-million, which will include transport upgrades and the rehabilitation of the Mpiana Mwanga hydroelectric power plant, which would account for $41.85-million and $46.54-million worth of investment, respectively.
