One-time market darling AVZ Minerals has been hit with a major regulatory setback, just weeks after the launch of a shareholder class action against the aspiring lithium miner.
One-time market darling AVZ Minerals has been hit with a major regulatory setback, just weeks after the launch of a shareholder class action against the aspiring lithium miner.
The company told the ASX this morning that the Democratic Republic of Congo’s minister of mines had issued two decrees a week ago.
They cancelled two earlier ministerial decrees granting a mining licence to AVZ subsidiary Dathcom Mining over the proposed Manono lithium project.
Managing director Nigel Ferguson said the company apologised for the continued frustration being felt by shareholders and its cornerstone investor.
He added that AVZ’s board and executive team were working tirelessly to achieve a “just outcome”.
AVZ was valued at $2.7 billion when its shares went into a trading halt in May 2022 after disputes arose over ownership of the Manono project.
Over the previous year, its shares had soared from 14 cents to a high of $1.37, giving AVZ a peak market capitalisation of more than $4 billion.
Its shares remain suspended from trading.
AVZ is in disputes with Chinese mining group Zijin Mining and a company named Dathomir Mining Resources SARL over ownership of both Dathcom and the Manono project.
The latest ministerial decree referred to the ongoing disagreements, conflicts and disputes between shareholders in the Manono project and said harmonious cooperation was a precondition to achieving progress.
Today’s update comes after ASX company Omni Bridgeway announced in December it would fund a shareholder class action against AVZ for allegedly breaching its continuous disclosure obligations and misleading investors.
The proposed class action is to be run by law firm Johnson Winter Slattery.
It is open to investors who bought AVZ shares between May 17 2021 and May 6 2022.
The basis of the claim is that AVZ held information on the ownership disputes prior to a crucial market update in May 2022.
AVZ issued a brief statement in late December reiterating its belief that it has complied with its continuous disclosure obligations.
