Black Mountain shoulders into lithium space with assets near AVZ’s Manono project

Black Mountain ASX BMZ lithium Democratic Republic of Congo

Beleaguered Black Mountain (ASX: BMZ) has attempted to turn its fortune around with a move into the lithium space after executing agreements to farm-into tenements near AVZ Minerals’ (ASX: AVZ) famed Manono project in the Democratic Republic of Congo.

The company topped up its cash with a A$500,000 raising and entered into agreements with two vendors in the DRC – Crown Mining Sarl and Cooperative Miniere de Development de Dikuluwe.

Under the contract terms with Crown Mining, Black Mountain has a 90-day due diligence period to earn a 60% stake in three mining permits south-east of the Manono lithium province.

With Cooperative Miniere de Development, Black Mountain has the option to pin down a 75% interest in two exploration licences in the same area. Black Mountain has a 45-day due diligence period for these licences.

According to Black Mountain, the mining permits and exploration licences are within the same geological setting as AVZ’s Manono project – which is turning out to potentially be one of the world’s largest known lithium, caesium and tantalum pegmatite projects.

During the March quarter, AVZ reported massive thick drill intersections with visible spodumene. The widest intersections to arise out of Manono were 282.95m and 295.05m.

AVZ has a conceptual resource target for Manono of 1.2 billion tonnes grading 1.5% lithium and despite not having a JORC resource, the company has received a lot of interest from offtake parties.

Black Mountain will negotiate the final earn-in terms for the permits and licences once due diligence has been completed.

The projects are also in proximity to Force Commodities’ (ASX: 4CE) Kitotolo and Kanuka assets where maiden drilling is about to kick-off.

Force carried out trenching at Kitotolo last year with results including 10m grading 0.25% lithium, 20m grading 0.21% lithium, and 21m with 0.26% lithium with all sections including higher-grade intervals up to 0.67% lithium.

During due diligence, Black Mountain plans to undertake an independent geological review of the project areas.

In addition to the prospect acquisitions, Black Mountain is negotiating a strategic partnership to progress its Busumbu phosphate project in Uganda.

The company also reported it was on the hunt for additional joint venture and farm-in opportunities in Africa and other “favourable” jurisdictions.

Namekara disposal and restructure

During the December quarter last year, Black Mountain revealed production at its Namekara vermiculite mine in Uganda had led to slumped sales and cash flow due to “logistics and cashflow bottlenecks”.

A few weeks later, Black Mountain announced its intent to dispose of the mine as part of a restructure to focus on its phosphate, copper and rare earths assets.

Once the divestment is complete, Black Mountain hopes to pay A$5.5 million of its debt obligations, leaving it with A$600,000 owing.

Investors reacted positively to today’s news, with Black Mountain’s share price rocketing 200% to A$0.048 by mid-afternoon.

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