AVZ Minerals kicks off drilling campaign in the DRC

AVZ Minerals ASX drilling DRC Manono Lithium Project
Drill rig arriving to the proposed drill hole site at the Manono Lithium Project.

Lithium market fundamentals have induced AVZ Minerals (ASX: AVZ) to commence its highly anticipated 20,000-metre drilling program at its Manono Lithium Project in the Democratic Republic of Congo (DRC).

In collaboration with its logistical partner Equator, based in the DRC, AVZ has mobilised a drill rig with associated drilling equipment now on site.

AVZ also reports that all preliminary preparation has been completed over the past week with sumps being excavated, drill pipes offloaded, and site inductions completed for all personnel, according to a market update.

AVZ says that its rig setup intends to test depth extensions and the thickness of the Roche Dure pegmatite which AVZ expects to be around 230 metres thick with the program commencing as soon as AVZ’s ancillary equipment has cleared customs in Lubumbashi on the Zambia/DRC border.

According to AVZ, a total of five drill rigs will be operational at its project site in the DRC by mid-February 2018 with a JORC-compliant Resources to be calculated sometime “in early Q2 2018”.

“The arrival of Equator’s drilling equipment is a long-awaited milestone for AVZ which will allow the commencement of the initial 20,000-metre of a 40,000-metre resource drilling program. The arrival of Equity’s drilling equipment on site in mid-February will allow the calculation of JORC resources for the first time at Manono,” said Nigel Ferguson, Technical Director at AVZ Minerals.

If AVZ was to define a JORC Resource and establish confirmed lithium mineralisation in the DRC, it could potentially open the door for the company to supply the rapidly-growing lithium-ion battery market.

Lithium market overview

Lithium has come to the fore as a rediscovered commodity. It was once a rather mundane light metal with only industrial applications; but it has quickly evolved to become one of the most talked about commodities history.

The reason is simple: lithium-ion batteries are likely to be used ubiquitously as part of the emerging energy-storage revolution. Junior explorers such as AVZ have the potential to align their company fortunes to the growing trend of lithium commercialisation, although to what extent will depend largely on explorational progress.

Aggregated lithium demand has been tipped to quadruple between now and 2025 while Tesla’s now-famous Gigafactory in Nevada is expected to hit peak production over the coming 5 years. Once it does, Tesla could be producing more lithium-ion batteries than any other company in the world with 35 gigawatt-hours of annual production currently forecast for 2025.

Furthermore, lithium market development could be self-sustaining as the adoption of lithium-ion batteries accelerates. Higher demand for electric cars is already lowering the cost of batteries due to economies of scale and technological advances are facilitating better quality batteries with longer charge cycles.

Bloomberg New Energy Finance predicts that battery prices will fall by an additional 15-20% in 2018, after falling by 70% in the preceding five years.