- AVZ Minerals (AVZ) has ended the December quarter with $8.25 million in the bank after spending much of the period focused on the Manono Project
- The company signed a key offtake agreement with a subsidiary of Ganfeng Lithium — China’s largest lithium compound producer
- It also conducted drilling at the Roche Dure pit floor ‘wedge’ within Manono in a bid to upgrade additional Inferred Resources to Indicated Resources
- AVZ spent $936,000 on operating activities over the quarter and $2.93 million on investing activities, primarily exploration works at the Congo-based asset
- The business has 2.14 quarters of funding left if its burn rate remains the same
- Looking ahead, AVZ is aiming to make an investment decision on mining at Manono later this year, with first shipments scheduled for Q4 2022
- Shares in AVZ Minerals are trading down 2.56 per cent at 19 cents each
AVZ Minerals (AVZ) has ended the December quarter with $8.25 million in the bank, after mainly focusing on the Manono Lithium and Tin Project in Congo.
The mineral exploration company signed a five-year offtake agreement with GFL International, a subsidiary of Ganfeng Lithium — China’s largest lithium compound producer.
Under the agreement, GFL agreed to purchase up to 160,000 metric tonnes per annum of spodumene concentrate (SC6) with the option to extend the contract by an additional five years.
Commenting on the agreement, AVZ Managing Director Nigel Ferguson explained it was one of several offtake deals the company had been negotiating.
"The fact that GFL has agreed to take 30 per cent of our Manono Project’s initial SC6 yearly tonnage is a massive endorsement for the project as we continue negotiations with other off-takers for our lithium and tin materials," he said.
The MD also revealed much of the December period was spent engaging with financiers discussing project debt finance.
"In terms of the project’s funding arrangements, we have made significant progress during the last few months around securing project debt financing," Nigel said.
"We have also attracted several interested industry participants and private equity investors around our equity component of the required funding, with those discussions still ongoing," he added.
In addition to the offtake and finance discussion, AVZ conducted drilling at the Roche Dure pit floor ‘wedge’ within Manono during the quarter, in a bid to upgrade additional Inferred Resources to Indicated Resources.
The materials stock spent $936,000 on operating activities over the December quarter and $2.93 million on investing activities.
All of that investment money went towards exploration works, including hydrogeological and geological drilling at the Congo-based asset.
The company had $8.25 million worth of cash in the bank, slightly down on the $10.81 million AVZ had in the bank at the start of the period.
That leaves the business with 2.14 quarters worth of funding left from the end of December, if its burn rate remains the same.
Looking forward, AVZ is aiming to make an investment decision on mining at Manono later this year with first shipments of SC6 and primary lithium sulphate scheduled for Q4 2022.
Shares in AVZ Minerals are trading in the grey at 19.5 cents each at 11:07 am AEDT.