Force Commodities (ASX: 4CE) is full steam ahead with acquiring its Kitotolo and Kiambi lithium projects in Africa’s Democratic Republic of Congo (DRC) after due diligence confirmed “significant occurrences” of spodumene and other lithium minerals.
The due diligence included a four-week onsite review and Small Caps reported last week the report was to be submitted to the board on 10 October 2017 along with assay results. From then, the board was to make a decision on whether or not to proceed with the acquisition.
However, the board completed its review of the report earlier than anticipated and has committed to the acquisition based on the report’s “strength of conclusions and recommendations”. The decision is still subject to shareholder approvals.
According to Force Commodities, the due diligence report confirmed its Kitotolo lithium project, which is 30km southwest of AVZ Minerals’ (ASX: AVZ) Manono lithium project, was in the “same geological setting” as Manono.
AVZ Minerals has been enjoying a lot of investor interest in the past five days and only this morning announced it had signed a memorandum of understanding with Shanghai Great Power regarding offtake and investment opportunities for Manono.
With investors and offtake partners showing an interest in the region, this is good news for Force Commodities, which also owns the Kiambi lithium project located about 90km east of Manono.
Additionally, the completed due diligence at Kitotolo determined widespread “significant occurrences of visible spodumene and other lithium bearing minerals”.
Taking into account the due diligence findings, the company stated it believed the Kitotolo lithium project could be “a significant asset”.
The Kitotolo project encompasses more 400 square kilometres and Force Commodities is in discussions regarding gaining an additional mining licence within the exploration licence area.
In early August 2017, Force Commodities agreed to acquire a 70% stake in Kitotolo and Kiambi from Lithium Age Pty Ltd (LAPL).
Under the agreement, Force Commodities will issue LAPL 67.5 million fully paid shares once it has committed to the acquisition, signed off on a work program and budget, and the DRC licences have been transferred.
Additionally, Force Commodities will assume LAPL obligations in relation to Kiambi and Kitotolo including cash payments and smelter royalties.
DRC government-owned La Congolaise d’Exploitation Miniere (Cominiere SA) retains the remaining 30% in Kitotolo and Kiambi.