AVZ Minerals has announced an equity placement of A$10,687,500 to Yibin Tianyi Lithium Industry through the issue of 237,500,000 shares at 4.5 cents per share.
Upon completion of the Placement, Yibin Tianyi will hold the equivalent of a 9% stake in AVZ.
Under the new amended Subscription Agreement, Yibin Tianyi will not be entitled to an AVZ Board seat.
AVZ’s MD,Nigel Ferguson, says:
“Upon completion, the Board is pleased to finally and officially welcome Yibin Tianyi as a shareholder.
“Yibin Tianyi has remained committed to becoming an investor in AVZ and its intention of becoming one of the largest hydroxide suppliers in China is complementary to our vision of bringing our world-class Manono Project into production.
“Funding from both the Offer and Placement strengthens AVZ’s balance sheet and together with existing cash, ensures that AVZ is well positioned with A$19.6 million, before costs, available to advance the development of its flagship Manono Project – one of the world’s largest and highest grade undeveloped hard rock lithium projects.
“I look forward to updating the market and our shareholders with respect to offtake agreements, financing arrangements and at the appropriate time, with respect to a decision to mine our Manono Project.”
Yibin Tianyi will require Chinese Overseas Direct Investment (“ODI”) approval to complete this investment. With the reduced investment amount (under 10%) and with no Board seat, the Placement is not subject to the approval of the Foreign Investment Review Board.
The Company currently intends to issue the Placement shares pursuant to existing placement capacity under ASX Listing Rules 7.1 and 7.1A and anticipates the Placement to be completed by 13 May 2020.
If the Placement does not complete by 13 May 2020 and the Company is unable to issue the Placement under ASX Listing Rules 7.1A due to the minimum price, the Company will seek shareholder approval.
Accordingly, the Company and Yibin Tianyi have agreed to extend the sunset date for satisfaction of all conditions precedent to 30 June 2020 to allow completion of the transaction.
Read more about AVZ Minerals
Other than as described above, all other conditions precedent to the Subscription Agreement are currently satisfied.
Read more about the Manono Lithium and Tin Project
Yibin Tianyi and the Company are continuing negotiations to execute a binding offtake agreement for lithium products from the Manono Lithium and Tin Project.