Cornerstone investor secured for development of Manono Lithium and Tin Project AVZ Minerals has announced its wholly owned subsidiary, AVZ International (“AVZI”), has entered into a transaction implementation agreement (“TIA”) with Suzhou CATH Energy Technologies (“CATH”).
CATH will earn a 24% equity interest in a multi-faceted joint venture to develop the Manono Lithium and Tin Project (“Manono Project”). CATH shall pay US$240 million cash for their 24% equity interest and a further amount to fund their pro rata portion of funding for the development of the Manono Project.
The transaction in totality will contribute more than US$400 million, subject to final project development costs being verified. The funds will be used by AVZI to advance the project into production.
CATH is a private investment entity jointly owned by Mr. Pei Zhenhua and Contemporary Amperex Technology Co. Limited (“CATL”), who both have significant influence in the global lithium conversion and lithium-ion battery industry.
Proceeds from the transaction will fund a majority of the total project financing required, whilst AVZ will retain a controlling 51% interest in the Manono Project post-completion of the transaction and its position as lead developer of the Manono Project.
The existing Offtake Agreement with Yibin Tianyi will be assigned to CATH and expanded in scope to provide offtake of SC6 for the life of the Manono Project. Furthermore, CATH will enter into a long-term Primary Lithium Sulphate (“PLS”) offtake or tolling agreement in respect of PLS produced from the PLS calcining plant (“PLS Plant”), which will also be developed in joint venture with CATH.
- Project covers 188km2 in southern Democratic Republic of Congo (DRC)
- Hosts lithium pegmatites with a strike length of 13km+ centred on an historical Tin mining operation
- Outstanding results received from AVZ’s initial drilling program at Manono in 2017, including 235m @ 1.66% Li2O, 202.8m @ 1.57% Li2O and 250.9m @ 1.48% Li2O.
- Roche Dure Mineral Resource of 400 million tonnes grading 1.65% Li2O, 715ppm Sn, 34ppm Ta is world-class in scale and grade
Before the above transaction, the Manono Project was owned by AVZ (75%) and La Congolaise d’Exploitation Minière SA (25%) (Cominiere, a State-owned enterprise). AVZ is responsible for funding expenditure to completion of a feasibility study and a decision to mine.