AVZ completes US$240m deal to fund lithium project

It could be game on for ASX-listed AVZ Minerals after the battery metal explorer announced the expeditated completion of a US$240m cornerstone investment from Chinese operator Suzhou CATH Energy Technologies for its Manono lithium-tin project in the Democratic Republic of Congo, or “DRC”. According to the company the agreement provides certainty of funding to progress the venture, pending the award of a mining licence and collaboration development agreement with the local government.

As part of the agreement the duo have agreed to waive a number of conditions in relation to Dathcom Mining. The DRC government owns a fraction of Dathcom Mining, who are also the principal joint venture vehicle the Manono project is held in.

The waived conditions include the granting of a project mining licence to Dathcom Mining SA, the signing of a collaboration development agreement between Dathcom and the DRC government and the requirement for Dathcom and its shareholders to make a final investment decision and approve the transaction.

AVZ says it expects the deal to be wrapped up in a month or so and has suggested the transaction could pave the way for the formation of a multi-faceted worldwide joint venture focused on various areas of the battery metals supply chain.

CATH is a private investment company co-owned by uber-successful Chinese businessman Pei Zhenhua and Contemporary Amperex Technology Co, or "CATL."

CATL is considered to be at the tip of the spear in the new energy space and boasts an armoury of research and development centres and production hubs around the world. Crucially, the company is China’s largest developer of electric vehicle batteries and a key supplier to industry juggernaut Tesla.

AVZ Minerals' Managing Director, Nigel Ferguson said:“We are in close consultation with the DRC Government authorities that are undertaking the Mining Licence assessment and are confident of delivering a favourable outcome for all stakeholders - most importantly the people of the DRC and our shareholders.”

Located 500 kilometres north of Lubumbashi in the DRC, Central Africa the Manono project boasts a massive 400 million tonne mineral resource with grades of 1.65 per cent lithium grade, 715 parts per million tin, and 34 parts per million tantalum.

The JORC compliant mineral reserve at Manono weighs in at a healthy 132 million tonnes going 1.63 per cent lithium.

Manono is considered to be one of the world's largest undeveloped lithium deposits, with near-unrivalled tonnage and a rich grade that remarkably stretches across the entire reserve.

The expeditated conclusion of the cornerstone investment marks a frenzy of new year activity for the budding battery metals player after recently announcing its intentions to plough $25 million into an early works program and exploration drilling campaign at Manono. The investment comes after a $75 million injection from a hugely oversubscribed capital raise that AVZ says will help it shift to lithium production.

The news of the deal saw its share price up 11 per cent in intraday trading and with plenty of cash in its saddlebags now thanks to the backing of a Chinese heavyweight there appears to be some serious momentum building behind the Perth-based explorer.

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