AVZ Minerals scores long-awaited Manono Project license

AVZ Minerals Limited (ASX: AVZ, OTCQX: AZZVF) (AVZ or Company) is pleased to announce that the Minister of Mines has issued the Ministerial Decree to award the Permit d’Exploitation (PE or Mining Licence) for its flagship Manono Lithium and Tin Project (Manono Project).
Dathcom Mining SA is 75% owned by AVZ International Pty Ltd, a wholly owned subsidiary of AVZ
Minerals Limited.
Award of the Mining Licence
The signing of the Ministerial Decree to award the Mining Licence to Dathcom Mining SA (Dathcom), in which AVZ holds a 75% interest via its wholly owned subsidiary AVZ International Pty Ltd (AVZI), is now with the Cadastre Minier (CAMI), which operate under the supervision of the Minister of Mines, to officially award the Mining Licence. In accordance with DRC Mining Code, CAMI are required to calculate the surface rights fees payable by Dathcom and provide the Mining Licence following receipt of this
payment.
The Mining Licence to be issued, will cover the entirety of the Roche Dure JORC Mineral Resource3
(401 million tonnes at Li20 1.65%) and the Carriere de l’Este exploration target4.
The Ministerial Decree excludes a portion of the land holding to the north, which will be required to be renewed under a 5-year Permit de Research (PR or Exploration Licence) to Dathcom, with discussions regarding the terms of the ongoing joint venture agreement on the PR to be finalised with the DRC Government in the near future, in addition to finalising discussions for the Collaboration Development Agreement with DRC Council of Ministers to provide wide ranging support for the Manono Project.
AVZ’s Managing Director, Mr. Nigel Ferguson, said: “The receipt of the Ministerial Decree to award the Mining Licence is leading to a watershed moment for AVZ and our partners, with the official award of the Mining Licence from CAMI expected in a matter of days.
This paves the way for AVZ to start developing what is arguably one of the most important new mining projects in the world that will significantly contribute to the global green energy transition, while also uplifting the lives of the Congolese people who will contribute and receive sustained benefits from the Project for many decades to come.
The Company is advancing its early works program ahead of a Final Investment Decision to commence major works and first SC6 production toward the later months of 2023.
We have maintained a strategic approach to developing our world-class Manono Project and we will continue to tick every box that will deliver long-term value to what we believe is the largest global hardrock lithium resource, based on current Proved and Probable Ore Reserves.”
AVZ’s Majority Interest in the Manono Project
Following the official award of the Mining Licence, and under the terms of the Joint Venture Agreement, La Congolaise D’Exploitation Miniere SA (Cominiere) who owns 25% of Dathcom will cede 10% of its interest to the DRC Government.
AVZI is in advanced discussions with the DRC Government regarding the purchase of Cominiere’s remaining 15% interest in Dathcom exercising AVZI’s rights under terms of the existing Dathcom Shareholder Agreement.
AVZ confirms that it retains legal title to a 75% interest in the Manono Project and is progressing the sale of an indirect 24% project interest to Suzhou CATH Energy Technologies under a multi-faceted Transaction Implementation Agreement (TIA), which is due to complete this month5.
Post completion of the TIA, AVZ will hold an indirect interest in 51% of the Manono Project (excluding the 15% interest to be acquired from Cominiere, which is subject to ongoing discussions with the DRC Government).
Refer to ASX Announcement dated 2 May 2022 “Extension of End Date to the Transaction Implementation Agreement”
Media speculation
AVZ makes reference to recent media speculation in respect of several matters in connection with AVZ’s interest in the Manono Project, which the Company considers spurious and immaterial, including:
• A reference to a decision by ‘Le Tribunal de Grande Instance’ in the DRC (Tribunal Decision) in respect of a claim by Dathomir Mining Resources SARL regarding the validity of a share certificate and an extract of a shareholders’ registry from Dathcom (Dathomir Claim).
• A claim that Cominiere has transferred a 15% interest in Dathcom to Jin Cheng Mining Company Limited (Cominiere Transfer Claim).
The Company notes that the Tribunal Decision does not purport to (nor does it, in fact or under DRC law) have any effect on:
• AVZ’s 75% equity interest in the Manono Project, to which AVZ holds good legal title; or
• the sale and purchase agreements under which AVZ acquired that interest (which AVZ has duly performed and completed and which have not been terminated or annulled by any order, letter or otherwise).
Rather, the Tribunal Decision is:
• in respect of proceedings that have been pursued vexatiously and without foundation or merit, and to which neither AVZ nor AVZI is a party;
• subject to an appeal which has the effect, under DRC law, of suspending the Tribunal Decision;
and
• the subject of a request on 1 February 2022 by the DRC Minister of Justice, that the DRC General Inspectorate of Judicial and Penitentiary Services, examine the case and that, pending the examination, nothing be done on the case.
In relation to the Cominiere Transfer Claim, the Company notes any such purported transfer would be restricted under the terms of the existing shareholders agreement between the Dathcom shareholders and accordingly, any purported transfer of the 15% interest to a third party would be a material breach of the pre-emptive rights contained in the existing Shareholders Agreement owed to AVZI, invalid and of no force or effect.
The Company has considered each of the Dathomir Claim and Cominiere Transfer Claim in detail and believes them to each be spurious in nature, without merit, contain fundamental and material errors, and have no substance or foundation in fact or law. The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect Dathcom’s and its interests, and the Company will consider all options including engaging with the DRC Government and seeking international law remedies.