AVZ Minerals Ltd (ASX:AVZ) has committed to invest A$25 million in early work programs for the 75%-owned Manono Lithium and Tin Project in the Democratic Republic of Congo (DRC) and advance a drilling program at the project's Roche Dure pegmatite deposit.
The funding comes from a recent $75 million capital raise and will be used to maintain progress through the Manono project timetable as the company awaits the award of a mining licence.
It will also fund a resource extension drilling program at Roche Dure deposit, with the potential to expand the previously reported JORC mineral resource of 400 million tonnes at 1.65% lithium oxide, including 264,550 tonnes of tin metal and 10,450 tonnes of tantalum metal equivalent.
“Potential to add significant value”
“This decision demonstrates the board’s confidence of receiving the support required to make the development of the Manono Project a reality and importantly, should maintain our project development timetable despite the award of the mining licence taking longer than we had previously anticipated,” 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.”
“The drilling program has the potential to add significant value with respect to expanding the reserve life of the Roche Dure deposit, whilst also identifying high grade ore zones for initial feed to the plant, providing increased SC6 (spodumene concentrate 6%) production volumes from the start of operations.”
Shares higher
Shares were as much as 7.61% higher intraday to A$0.92, after the company hit a new record high of A$0.995 on January 13, 2022. The market cap is approximately A$2.77 billion.
AVZ says the Manono project continues to enjoy wide-ranging government support for all outstanding permitting and licence requirements, and cornerstone investors are fully supportive of all initiatives to advance the Manono Project and close the Transaction Implementation Agreement.
Early work programs
The early works program to be undertaken in the second half of the 2021-2022 financial year constitutes about $19 million, which has been allocated to:
- Upgrade existing roads and bridges to assist with the transport of equipment to and from site;
- Purchase critical mobile equipment required for initial project development;
- Progress camp construction and enter key service contracts; and
- Progress various technical studies with respect to metallurgical test-work, downstream processing and infrastructure projects.
The remaining $6 million has been approved for additional resource drilling at the Roche Dure deposit.
About AVZ Minerals
AVZ holds a 75% interest in the Manono Project, 500 kilometres north of Lubumbashi in the south of the DRC, hosting the world class Roche Dure mineral resource, one of the largest undeveloped hard rock lithium deposits in the world.
The Manono Project is strategically positioned as a clean, sustainable source of lithium, contributing to the green energy transition and feeding the global lithium-ion battery value chain.
AVZ is striving to be a near ‘zero emissions’ operation with an independent greenhouse gas assessment confirming the Manono Project could have one of the lowest carbon footprints of any global hard rock lithium mines.