AVZ looks to tin/tantalum credits to turbo-charge Manono economics

With an estimated A$600m a year in annual EBITDA, the economics at AVZ Minerals’ giant Manono lithium project in the DRC don’t need much turbo-charging, but that is exactly what the Perth-based, ASX-listed company is planning to do after it managed to produce separate, very high grade tin and tantalum concentrates in test work using traditional low cost processing equipment.

The company said that current, gross revenues in the DFS from alluvial tin contributes just US$126M over the life of mine - a conservative 0.8% of the total gross revenue of US$15.242B.  However, that is now likely to change as AVZ re-focuses on what extra financial rewards can be achieved from metals in the alluvial fields at Manono.

The latest test results showed outstanding recoveries of not only tin, but also tantalum and niobium, suggesting that the company may need to revisit the recent DFS to add in likely additional credits after the successful round of test work that was performed on two alluvial composite samples.

AVZ said that it will also need to investigate the processing flow sheet to consider a furnace for the production of separate tin and tantalum ingots on site, potentially setting up a further downstream processing opportunity in addition to the proposed lithium sulphate plant.  Being able to separate the tin and tantalum is a considerably more lucrative way to sell them according to the company.

AVZ said metallurgical test work on two composite samples of artisanal heavy mineral concentrates recovered from alluvial material produced a low impurity cassiterite concentrate grading 71.7-73.2 per cent tin which is equivalent to 91-93 per cent cassiterite.  A separate high-grade tantalum product was also produced with between 17-21 per cent tantalum oxide.

The company said the tantalum product stream is predominantly columbite-tantalite, or coltan and it returned niobium grades of between 17-21 per cent niobium oxide.

Even though tantalum product recoveries were between 62-67 per cent, the tests showed that a high, 20-31 per cent proportion of tantalum and niobium reported to the cassiterite stream and AVZ expects that to attract extra credits from tin smelters.

Whilst the Perth-based AVZ has previously been focused on lithium from Manono which is most likely the world’s largest undeveloped lithium deposit, it now says that the recent tin-tantalum test work may well make a material difference to the project’s key financial metrics.

AVZ Managing Director and prime mover, Nigel Ferguson said: “The Company has been 100% focussed on developing the hard rock assets of the Manono Project and presenting the recently completed Definitive Feasibility Study.”

"Some test work on the substantial Manono alluvial tin fields was able to be included in the DFS, however, we purposely left any detailed work on the alluvial tin fields until a later stage in the project."

“We have previously announced some encouraging results from our alluvial test work program but this latest set of results are simply outstanding with regards to recovery of not only Tin but Tantalum and Niobium."

Manono is already expected to pump out AUD$6b in life of mine net profits – and that’s after tax – and before any serious work has been done on the additional tin, tantalum or niobium opportunity that has presented itself courtesy of the latest test work.

Is your ASX listed company doing something interesting? Contact : matt.birney@businessnews.com.au