AVZ Signs First Lithium Offtake Agreement with GFL International

AVZ Minerals Limited has secured a strategic, long-term offtake partner with GFL International Co., a subsidiary of China’s largest lithium compounds producer, Ganfeng Lithium.

The Company and GFL have signed an offtake agreement, for an initial five year term and with an option to extend for a further five years, for spodumene concentrate (SC6) from the DRC’s Manono Lithium and Tin Project.

GFL is a leading global battery materials producer that is continuing to expand both its lithium carbonate and lithium hydroxide production capacity.

AVZ’s Managing Director, Mr. Nigel Ferguson, said: “We are very pleased to finalise these discussions with GFL and to sign our first lithium offtake agreement.”

“The fact we have signed our first offtake agreement with China’s largest lithium compound producer just reinforces our belief that the Manono Project is world-class.”

“GFL has signed on to take 30% of the Manono Project’s initial saleable SC6 yearly tonnage,which is a massive endorsement for our project.”

“Over the coming months,I look forward to finalising other offtake agreements which are currently under negotiation,not only for our lithium products but also for our tin and tantalum materials.”

“This SC6 offtake agreement with GFL will also greatly assist the Company in meeting any conditions precedent that are required for our prospective financiers.”

KEY TERMS OF THE GFL OFFTAKE AGREEMENT:

• Term: initial 5-year term,with the option to extend for a further 5 years, at GFL’s option.
• Annual Supply: Ramping up to 160,000 dry metric tonnes of spodumene concentrate from Year 3 onwards.
• Product specifications: 6% Spodumene Concentrate SC6.
• Pricing: CIF, China determined by a formula which references pricing of lithium carbonate and lithium hydroxide, with appropriate adjustments for quality and including a scaled collar price mechanism. If the term is extended for a further 5 years, a review of the pricing formula maybe triggered with reference to agreed market parameters.
• Payment: payment for each shipment will be made by an irrevocable letter of credit.
• Agreement by the parties to place an importance and focus on environmental, social and governance (ESG) development through the agreement.
• Termination rights: include occurrence of an insolvency event and material breach of the Offtake Agreement including non-payment or failure to supply or take annual tonnage requirements.