PERTH (miningweekly.com) – ASX-listed AVZ Minerals has struck a $5.5-million deal to acquire an additional 5% interest in the Manono lithium and tin project, in the Democratic Republic of Congo (DRC).
AVZ on Monday announced that it would acquire an additional 5% interest in Manono from joint venture partner Dathomir Mining Resources, taking its interest in Manono to 65%.
Under the terms of the agreement, AVZ would make an up-front payment of $500 000 within 14 days of executing the transaction, with the balance of the consideration to be paid at any time within a 36-month period.
“AVZ is pleased to be able to secure further equity interests in the Manono lithium and tin project, given its Tier 1 status. We are still in discussions with our main partner, La Congolaise D’Exploitation Miniere to secure additional equity from them on similar terms,” said AVZ MD Nigel Ferguson.
As with all parastatal entities in the DRC, Comineire is under a ‘suspension of signature authority’ following the recent presidential elections, with Ferguson saying on Monday that the company hoped that the suspension would be lifted soon.
“The extra equity in the Manono lithium and tin project will add significantly to the bottom line and net present values and it is crucial for project financing as AVZ continues discussions with potential financiers and offtakers.”
AVZ’s 65% equity interest in the project would present a net present value added of some $130-million, based on the five-million-tonne-a-year operation considered in the recent scoping study, to around $1.68-billion.
The scoping study at Monono estimated that a five-million-tonne-a-year operation could deliver some 1.1-million tonnes a year of lithium concentrate over a 20-year mine life, for a capital cost of between $380-million and $400-million.