Magnis Resources
ASX-listed AVZ Minerals has reached agreement with Huayou for Huayou to invest US$13.02 million to acquire an 11% interest in AVZ Minerals.

The placement to Huayou International Mining (Huayou) of AVZ Minerals will comprise 186 million shares at an issue price of 7 cents per share, together with 186 million attaching options exercisable at 10 cents and expiring 20 months from the date of issue to raise US$13 million.

Huayou will also have the right to appoint a nominee to the AVZ Minerals board. AVZ Minerals will issue 186 million shares and 86 million attaching options to Huayou under its existing placement capacity in accordance with Listing Rule 7.1 and 7.1A, being 45.8 million shares and 86 million options under Listing Rule 7.1 and 140.2 million shares under Listing Rule 7.1A, with settlement expected to be on or around Tuesday 22 August 2017.

The remaining 100 million attaching options will be issued to Huayou subject to shareholder approval (expected in late September 2017).

In addition, AVZ Minerals also proposes to raise, subject to shareholder approval (expected in late September 2017), up to a further $1.98 million from institutional and sophisticated investors by the issue of up to 28 285 714 shares at an issue price of 7 cents per share, together with up to 28 285 714 attaching options exercisable at 10 cents and expiring 20 months from the date of issue.

Hartleys will act as lead manager of this component of the placement.

The funds will primarily be used for the planned drilling and initial metallurgical test work programs at the Manono project in the south of Democratic Republic of Congo (DRC), as well as ongoing corporate and administration costs.

The company intends to embark on a significant diamond and RC drilling program commencing late Q3 / early Q4, with the objective of defining mineral resources to JORC 2012 standard by early 2018.

“We are extremely pleased to have attracted a strategic investor of the calibre of the Huayou Cobalt Group, comments AVZ Minerals executive chairman, Klaus Eckhof.

“They have a proven track record in operating in the DRC, and in developing and financing mines. We look forward to working with Huayou to bring the Manono project into production on the fastest possible timeline,” adds Eckhof.

“We look forward to building a strong relationship with AVZ Minerals and to work together to develop the exciting Manono project,” says Huayou CEO, Hongliang Chen.

“We believe the strong demand for lithium will continue to grow in the years ahead and Huayou can assist to realise the significant potential of the Manono project during this growth phase.”

Feature image credit: Wikimedia