AVZ to drive Manono lithium project forward with $10.6m raising

AVZ Minerals has executed an equity placement that will see Chinese lithium chemical producer Yibin Tianyi Lithium Industry take a 9 per cent stake in the company for $10.6 million.

The deal provides a foundation for AVZ and Yibin Tianyi to negotiate an offtake agreement for the Manono lithium project in the Democratic Republic of Congo.

AVZ intends to issue 237.5 million shares at 4.5 cents per share. The placement is expected to complete on May 13 after Yibin Tianyi receives the required Chinese overseas direct investment approvals.

AVZ managing director Nigel Ferguson said the placement funds would enable the company to advance the development of its flagship Manono project.

“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 complimentary to our vision of bringing our world-class Manono project into production,” he said.

“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 is backed by several Chinese entities including China’s largest electric vehicle (EV) battery manufacturer Contemporary Amperex Technology and Suzhou TA&A UltraClean Technology company.

Yibin Tianyi and AVZ are continuing their negotiations to execute an offtake agreement for lithium products from the Manono project.

The Chinese company is set to become one of the largest lithium hydroxide producers in China, targeting production of up to 25,000 tonnes of lithium hydroxide per annum, with future staged expansions expected to increase production to approximately 100,000 tonnes per annum.

Yibin Tianyi will require approximately 600,000 tonnes per annum of SC6 to satisfy its hydroxide plant when fully completed.

AVZ also plans to raise an additional $5.3 million as part of its capital raising initiative  to issue 300 million options at three cents each for three years.

The definitive feasibility study for the Manono project forecasts an initial 20-year mine life, producing 700,000 tonnes per annum of high-grade spodumene concentrate (SC6) lithium and 43,374 tonnes per annum of primary lithium sulphate.

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