Cashed up-advanced hard rock lithium explorer AVZ Minerals (ASX: AVZ) has reported an “extremely busy” June quarter including the unveiling of a “highly positive” definitive feasibility study for the flagship Manono lithium and tin project in the Democratic Republic of Congo.
This was followed by a $10.7 million placement to Yibin Tianyi in May – giving Yibin a 9% stake in AVZ.
The company also received $5.3 million (before costs) in May after Cannaccord Genuity (Australia) exercised more than 180.24 million options.
AVZ used the funds to repay a US$1 million convertible note, and make the final US$1 million payment under its original acquisition agreement to lock-in the 60% interest in Manono.
Advancing Manono lithium and tin project
Early development works at Manono are underway – funded by the recent cash inflows.
AVZ managing director Nigel Ferguson noted the company had also issued US$300 million of pre-mining request for tenders.
He said these will be awarded once a final investment decision to mine Manono has been made.
“I can confirm that discussions with various entities relating to offtake agreements and financing arrangements are well advanced,” he explained.
“We are looking at financing options out of Europe and the Middle East where there is a strong interest in electric vehicle batteries, as well as another option out of South Africa.”
As well as advancing finance and offtake negotiations, Mr Ferguson said the company was preparing the necessary documentation for converting the exploration licence to a mining permit.
He pointed out that COVID-19 had slowed discussions with the DRC Government due to travel restrictions.
“However, discussions are now progressing well, and we expect to finalise a special economic zone agreement before award of the mining licence.”
Manono definitive feasibility study
AVZ delivered the definitive feasibility study for Manono in April.
The study estimated the project could deliver a US$3.8 billion (A$5.3 million) net after tax profit – on a 100% basis over a 20-year mine life.
Capital costs to develop Manono are estimated at US$545.5 million with a post-tax payback period of 2.25 years.
The capital costs include transport upgrades and rehabilitation of the nearby Mpiana Mwanga hydroelectric power plant.
Shoring up the proposed mine is a reserve of 93 million tonnes at 1.58% lithium and 988 grams per tonne tin for 1.47Mt of contained lithium and 92,000t of tin.
Backing the reserve is the world’s largest spodumene resource of 400Mt at 1.65% lithium and 715 parts per million tin, and 34ppm tantalum – resulting in 16.3Mt of contained lithium carbonate equivalent.
Analyst Roskill claims the Manono resource accounts one-fifth of the entire world’s spodumene resources.