ASX-listed AVZ Minerals has secured the rights to an additional 10% equity stake in the Manono lithium and tin project in the Democratic Republic of Congo – increasing its equity stake in the project to 75%.
AVZ Minerals has executed a share sale purchase agreement for the additional 10% equity stake in Dathcom Mining SA from its joint venture partner, Dathomir Mining Resources SARLU for for US$15.5 million.
Under the agreement, AVZ Minerals has paid $500 000 to Dathomir Mining as an advance payment. The remaining $15 million will be paid to Dathomir Mining at any time within 12 months of the agreement being executed, or as soon as AVZ Minerals secures a minimum of $50 million project financing. Should payment not be made within 12 months of executing the agreement, AVZ will forego its $500 000 advance payment and lose the rights to secure the additional 10% equity in the Manono project.
Alternatively, the agreement provides for AVZ to secure a minimum 2.5% equity shareholding in Dathcom Mining and thereafter in pro rata amounts up to the maximum 10% stake during the 12-month period.
An extraordinary general meeting of Dathcom Mining will need to be convened to approve the sale of Dathomir Mining’s remaining equity in Dathcom Mining to AVZ Minerals. There is no other material terms or condition precedent other than as disclosed above.
As previously announced in June 2019, AVZ has secured 5% equity interest from Dathomir Mining for a total consideration of $5.5 million, with an advance payment of $500 000 made. The balance of the consideration ($5 million) has not yet been paid and can be paid at any time within a period of 36 months from execution of the agreement.
Upon completion of both agreements, AVZ will own 75% of the joint venture company, Dathcom Mining SA – which holds 100% of the Manono project licence (PR13359).
The remaining 25% of the joint venture company is owned by La Congolaise D’Exploitation Miniere SA (Cominiere), of the DRC government.
Dathomir Mining will no longer hold equity in the project and, as such, will no longer be required to contribute pro rata to the ongoing operating expenses of the Manono project.
AVZ Minerals MD Nigel Ferguson says that the recently completed definitive feasibility study clearly demonstrated that the Manono project is very robust, with strong financial metrics.
“We are excited to have finalised the terms of our second share sale purchase agreement with Dathomir Mining, which upon completion, gives AVZ a 75% equity stake in the Manono project.”
“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,” Ferguson concludes.
Join our upcoming live panel discussion on 30 September 2020 at 13h00 GMT
Key discussion points will include:
- The country’s installed capacity and availability of hydroelectric power
- How to best harness hydropower in the DRC for the benefit of the mining industry and the surrounding communities
- How to ensure the most sustainable and beneficial hydropower projects
- Challenges/opportunities within the current hydroelectric power system
- Potential future hydropower sites and projects currently under development in the DRC