AVZ Minerals officially lodges mining licence application for Manono lithium project with DRC Government
Once the transaction is complete, AVZ Minerals will own 75% of Manono, which will increase its share of pre-tax project net present value from US$1.4 billion to US$1.7 billion.
AVZ Minerals (ASX: AVZ) is another step closer to developing its flagship Manono lithium project after officially lodging its mining licence application with the Democratic Republic of Congo Government.
All documents in support of the mining application have now been submitted.
AVZ managing director Nigel Ferguson said the mining licence application was a “significant milestone”.
“It marks the culmination of our highly strategic and well-executed exploration program and is another signal that the company is rapidly advancing towards the construction phase of our mining program and, ultimately, moving into production.”
He added the company anticipates the DRC Government will expedite granting of the licence so that AVZ can maintain its construction and development schedule.
The company has pencilled in the first spodumene shipment from Manono for Q1 2023.
Closer to locking-in finance
Mr Ferguson said securing the mining licence would also enable AVZ to “quickly progress” Manono to bankable feasibility study level.
An optimised definitive feasibility study is underway and due for delivery next month.
This is a condition required by prospective financiers of the project.
AVZ has been “actively engaging” with commercial banks, brokers, private equity investors and non-commercial lenders such as Pan-African Development Finance Institutions.
Several “reputable” global institutions have been undertaking due diligence on Manono.
Manono lithium-tin project
AVZ’s Manono project is believed to host the world’s largest and highest-grade unexploited hard rock lithium resource.
It has a current JORC resource of 400.4 million tonnes at 1.65% lithium.
The company has generated an exploration target for the project of up to 1.5Bt at 1.5% lithium.
A definitive feasibility study that was completed in April last year has given the project a capital expenditure requirement of US$545 million.
The after tax net present value is estimated at US$1.028 billion with an internal rate of return of 33.2% (after tax).
Initial production of 700,000t per year of spodumene concentrate is anticipated plus 46,000tpa of primary lithium sulphate.
AVZ expects to received additional production credits for tin, tantalum and niobium from the mine.