- AVZ Minerals (AVZ) will soon increase its stake in the Manono Lithium and Tin Project to 75 per cent via a share sale-purchase agreement
- The agreement is between AVZ and Dathomir Mining Resources, who’s joint venture partner owns the Manono Project
- The 10 per cent increased stake is set to cost AVZ US$15.5 million (around A$21.22 million)
- The company has already paid US$500,000 (approximately A$684,490) to Dathcom Mining
- It will pay the remaining amount once it has secured US$50 million (around A$68.45 million) in project financing
- Shares in AVZ are trading up 6.35 per cent at 6.7 cents
Mineral explorer AVZ Minerals (AVZ) is planning to increase its stake in the Manono Lithium and Tin Project to 75 per cent via a share sale-purchase agreement.
The Manono Project is located in the south of the Democratic Republic of Congo and plays host to one of the world’s largest lithium-rich lithium-cesium-tantalum (LCT) pegmatite deposits.
Agreement
Under the agreement, AVZ will acquire an additional 10 per cent stake in the project’s owner, Dathcom Mining, from its joint venture partner Dathomir Mining Resources.
The extra 10 per cent stake is set to cost the mineral explorer US$15.5 million (around A$21.22 million), with US$500,000 (approximately A$684,490) already paid.
The remaining amount must be paid off by AVZ within a 12-month period, or as soon as the company secures US$50 million (around A$68.45 million) in project financing.
If it fails to cough up the remaining US$15 million, AVZ will lose the US$500,000 payment it handed over to Dathomir and the additional 10 per cent take in the project.
But, the company also has the option of securing a maximum 10 per cent equity shareholding in Dathcom during the 12-month period.
The agreement is also reliant on Dathcom seeking approval from its own shareholders to sell Dathomir’s remaining 10 per cent equity in the company to AVZ.
Manono
This is the second time in recent months AVZ has bought equity in Dathcom and the Manono Project.
In June, the company announced it has secured a five per cent equity interest from Dathomir for US$5.5 million (around A$7.53 million).
AVZ has already paid US$500,000 to the company (approximately A$684,490) and has 36 months to pay the remaining amount.
Upon completion of both agreements, AVZ Minerals will have a 75 per cent stake in the Manono Lithium and Tin Project.
“The recently completed Definitive Feasibility Study clearly demonstrated our Manono Project is very robust, with strong financial metrics,” AVZ Managing Director Nigel Ferguson said.
“This additional equity in the Manono Project will add significantly to the project’s bottom line and Net Present Value and is critical to AVZ’s ongoing discussions with prospective financiers,” Nigel added.
Shares in AVZ are trading up 6.35 per cent at 6.7 cents each at 11:31 am AEST.