AVZ Minerals receives ministerial decree for Manono project ahead of mining licence

AVZ Minerals (ASX: AVZ) has been issued with a ministerial decree by the Democratic Republic of Congo for the Manono lithium and tin project.

The decree was issued to Dathcom Mining SA, in which AVZ holds a 75% interest via its wholly-owned subsidiary AVZ International, and precedes the award of a mining licence.

It covers the entirety of the Roche Dure mineral resource and reserve — which sits at 401 million tonnes grading 1.65% lithium oxide — and the Carriere de l’Este exploration target.

The decree excludes a portion of the landholding to the north, which will need to be renewed under a five-year Permit de Research (or exploration licence) to Dathcom.

Discussions regarding the terms of an ongoing joint venture agreement on the exploration licence are yet to be finalised with the DRC Government.

AVZ is also in the process of finalising discussions for a collaboration development agreement with DRC council of ministers relating to support for the Manono project.

Project milestone

Managing director Nigel Ferguson welcomed the decree as a much-anticipated milestone for AVZ.

“The receipt of the ministerial decree is leading to a watershed moment for AVZ and our partners … the official award of the mining licence is expected in a matter of days,” he said.

“This will pave the way for us to start developing what is arguably one of the most important new projects in the world which will significantly contribute to the global green energy transition.”

Mr Ferguson said the company was advancing its early works program ahead of a final investment decision for Manono and the start of major works and first spodumene concentrate production towards the end of next year.

“We have maintained a strategic approach to developing this world-class project and we will continue to tick every box that will deliver long-term value to what we believe is the largest hard-rock lithium resource in the world, based on current proved and probable reserves.”

Project equity

Following award of the mining licence, La Congolaise D’Exploitation Miniere SA (or Cominiere, which owns 25% of Dathcom) will cede 10% of its interest to the DRC Government.

AVZ is in advanced discussions with the government regarding the purchase of Cominiere’s remaining 15% interest in Dathcom.

It retains legal title to a 75% interest in Manono and is progressing the sale of an indirect 24% interest to cornerstone investor CATH Energy Technologies under a multi-faceted agreement.

Once that agreement has been finalised, AVZ will hold an indirect interest in 51% of the Manono project (excluding the 15% interest to be acquired from Cominiere).