AVZ Minerals Ltd (ASX:AVZ) has extended the end date on a transaction implementation agreement with the Manono lithium and tin project’s cornerstone investor.
Suzhou CATH Energy Technologies — known as CATH for short — now has until April 30 to cross the T’s and dot the I’s on its investment deal with AVZ.
AVZ and CATH joined forces in September last year, with the latter agreeing to provide US$240 million to accelerate Manono’s development in exchange for a 24% equity interest.
That deal was expedited in February this year, when both parties decided to waive a number of precedent conditions and move the agreement along.
At the time, AVZ advised the transaction would likely settle in March, but today’s announcement has given both companies until the end of the month to cut the ribbon and complete the investment.
Investing in Manono’s development
The majority of Manono’s total project financing will be covered by the deal with CATH, a private investment entity jointly owned by Pei Zhenhua and Contemporary Amperex Technology Co (CATL).
On top of the US$240 million investment, CATH is expected to provide further capital to fund its pro-rata portion of Manono’s development.
This means the transaction is expected to inject more than US$400 million into the tin and lithium asset — subject, of course, to the final project development costs being verified.
AVZ will retain a controlling 51% interest in Manono once the transaction is complete, as well as its position as the property’s lead developer.
“Shared strategic vision”
When the deal was announced in September last year, AVZ managing director Nigel Ferguson said: “This is a very significant day for the company and all of our stakeholders as we move closer to making the Manono project a leading global producer of lithium products.
“We are delighted to enter into this deal with someone of the calibre of Pei and CATL, both of whom have the financial capacity, technical expertise and credibility within the lithium conversion and lithium-ion battery industry to complement the world-class Manono project.
“Our shared strategic vision to develop the vast potential of the Manono project and further downstream projects, provide an exciting future for AVZ shareholders.
“Forging this partnership complements AVZ’s excellent collaborative relationship with the Government of the Democratic Republic of Congo and the local communities in which we operate.
“Once this transaction and the associated agreements are finalised, 100% of our saleable lithium products will be accounted for and a significant portion of Manono will be financed via the equity contributions provided by this transaction.
“This is a major credit to the board and senior executive team who have all contributed to making the Manono project a reality.”