HomeBase MetalsAVZ secures investor for development of Manono

AVZ secures investor for development of Manono

AVZ Minerals has announced its wholly owned subsidiary, AVZ International has entered a transaction implementation agreement with Suzhou CATH Energy Technologies.

CATH is a private investment entity jointly owned by Mr. Pei Zhenhua and Contemporary Amperex Technology (CATL), who both have significant influence in the global lithium conversion and lithium-ion battery industry.

Proceeds from the transaction will fund a majority of the total project financing required, whilst AVZ will retain a controlling 51% interest in the Manono Project post-completion of the transaction and its position as lead developer of the Manono Project.

The existing Offtake Agreement with Yibin Tianyi will be assigned to CATH and
expanded in scope to provide offtake of SC6 for the life of the Manono Project.

Furthermore, CATH will enter into a long-term Primary Lithium Sulphate offtake or tolling agreement in respect of PLS produced from the PLS
calcining plant, which will also be developed in joint venture with CATH.

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AVZ and CATH have also agreed to evaluate and progress a study to increase annual production, expanding Dense Media Separation production capacity from a 4.5 Mtpa throughput producing approximately 0.7 Mt of SC6, as contemplated by the DFS, to a 10 Mtpa DMS throughput producing approximately 1.6 Mt of SC6.

These studies were commenced in early September and are expected to be significantly progressed by AVZ by end of December 2021.

Under the Expansion Scenario, CATH will fund its equity share of the additional Manono Project development capital expenditure and increase its SC6 offtake commitment to approximately 50% of annual production.

The Expansion Scenario will significantly scale the size of the project and further de-risk the fundamental economics of the Manono Project. The parties will also assess the feasibility of developing a lithium hydroxide facility once studies currently underway are completed on this process.

AVZ’s MD, Nigel Ferguson, said:

“This is a very significant day for the Company and all of our stakeholders as we move closer to making the Manono Project a leading global producer of lithium products.”

“We are delighted to enter into this deal with someone of the calibre of Mr Pei and CATL both of whom have the financial capacity, technical expertise and credibility within the lithium conversion and lithium-ion battery industry to compliment the world class Manono Project.”

“Our shared strategic vision to develop the vast potential of the Manono Project and further downstream projects, provide an exciting future for AVZ shareholders.”

“Forging of this partnership compliments AVZ’s excellent collaborative relationship with the Government of the DRC and the local communities in which we operate.”

“We look forward to updating our shareholders in the near future with respect to award of the Mining Licence and execution of the Collaboration Development Agreement, which are progressing extremely well through Government channels.”

“Once this transaction and the associated agreements are finalised, 100% of our saleable lithium products will be accounted for and a significant portion of the Manono Project will be financed via the equity contributions provided by this transaction.

”This is a major credit to the Board and senior executive team who have all contributed to making the Manono Project a reality.”