AVZ Minerals (ASX:AVZ) tumbles despite progress at Manono project

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AVZ Minerals (ASX:AVZ) tumbles despite progress at Manono project

ASX:AVZ, Manono Project, AVZ minerals, ASX
Image source: Image showing mining excavation Image Source: © Kierran1 | Megapixl.com

Highlights

  • AVZ minerals make operational progress at the Manono project.
  • Funding and licensing requirements are on track at Manono.
  • Manono is a critical flagship project of AVZ in Africa.

AVZ Minerals Limited (ASX:AVZ) has shared an operational update on its flagship Manono Lithium and Tin Project (Manono Project), and the deal with CATH to develop the Manono Project is progressing well. AVZ has also received favourable outcomes from the Department of Mines on the project's definitive feasibility study (DFS).

More on agreement with CATH-

  • Transaction between AVZ and Suzhou Cath Energy Technologies (CATH) is progressing well.
  • Proceeds from the transaction will fund the majority of project development capital. CATH is paying AVZ a break fee of US$20 million, held in escrow as of now.
  • Transaction completion is subject to satisfaction or waiver of various preceding conditions before 30 November 2021, and both AVZ and CATH claim to be working co-operatively towards it.
  • More than 50% of project funding will be secured on deal closure with CATH, enabling a Final Investment Decision (FID). It will kick-start project construction and ensure sufficient capital to fund initial six to eight months of project construction cost.
  • The CATH deal has significantly de-risked Manono Project for debt financiers. Thus, AVZ also expects to generate debt funds by Q2 2022.

Favourable outcomes on DFS-

  • AVZ has already submitted all documents for a mining licence to the DRC government in May 2021.
  • AVZ has received environmental approvals and a favourable cadastral opinion from the Department of Mines on the DFS.
  • AVZ is now issuing a Bankable feasibility study rather than an updated DFS to financial institutions for obtaining the mining licence.
  • It also claims to progress well on a possible expansion scenario study at Manono.

Bottom line-

Manono is AVZ's flagship project for Lithium, useful for EV batteries. AVZ is keen to support initiatives and assume a critical position battery mineral industry in Africa with progress on the project.

However, AVZ shares are trading slightly lower at AU$0.32 per share at 3.20 PM AEDT on ASX today.

More ASX updates- Orocobre (ASX:ORE) reports hike in lithium output in September quarter

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