AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) is encouraged that the newly established Government of the Democratic Republic of the Congo has moved quickly to approve a draft inter-ministerial decree relating to the draft cooperation agreement with the company.
Approval of both documents by the Council of Ministers of the new DRC Government, which was only sworn in on April 27, 2021, will ultimately deliver significant fiscal benefits for the Manono Lithium and Tin Project once finalised.
The company believes that approval of these two draft agreements within the first month of the newly elected government being in office is a very positive step towards the approval of the Manono Special Economic Zone (MSEZ).
“Key milestone for Manono Project”
AVZ managing director Nigel Ferguson said: “The approval of both the draft decree relating to the cooperation agreement and the draft cooperation agreement is yet another milestone for the Manono Project.”
“The final cooperation agreement will deliver significant long-term economic benefits for the project, as well as further underpinning our substantial investment in the DRC.
“It will also deliver long-term benefits for the people of the Manono region, including access to improved health and education services, stable employment opportunities and upgraded infrastructure including electricity supply.”
AVZ's market cap is approximately A$465 million while shares have been up as much as 9.4% intra-day to A$0.175.
Manono Special Economic Zone
The approval of these drafts is positive for AVZ in terms of the eventual approval of a MSEZ that is expected to deliver economic benefits to the project in the form of tax concessions and import duty relief.
Ferguson said: “In addition, the cooperation agreement reinforces the DRC Government’s pledge to financiers that the DRC is open for business to the international investment community.”
Once finalised, Manono will be just the second special economic zone (SEZ) created in the DRC.
FEED study being finalised
The fiscal incentives and benefits that will be derived by the Manono Project operating within the SEZ will further reinforce the financial outcomes compared with the 2020 Manono Project’s definitive feasibility study.
A FEED study is being finalised, along with the re-run of the resource estimation on the back of all ‘wedge’ drilling data being made available for input into the newly structured definitive feasibility study model.
The first review of the DFS document has been completed and on all final data being received, this document will be finalised and released to the market.
Formal cooperation agreement pending
AVZ's DRC team is working hard with government officials to finalise negotiations on the Mpiana Mwanga HEPP and the Manono SEZ terms and conditions now that an incentivised, newly formed government is available.
The formal decree relating to the cooperation agreement with AVZ and the formal cooperation agreement are expected to be signed by the DRC Government as soon as practicable – potentially by the end of this month.