15/09/2020 - 08:54

AVZ progresses lithium development funding discussions

15/09/2020 - 08:54

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ASX-listed lithium hopeful, AVZ Minerals, says it is knee-deep in negotiations with potential offtake partners and debt financing providers to breathe life into the staged, US$545 million development of its Manono open-pit lithium and tin project in the Democratic Republic of the Congo that boasts one of the largest hard-rock lithium deposits on the planet.

ASX-listed lithium hopeful, AVZ Minerals, says it is knee-deep in negotiations with potential offtake partners and debt financing providers to breathe life into the staged, US$545 million development of its Manono open-pit lithium and tin project in the Democratic Republic of the Congo that boasts one of the largest hard-rock lithium deposits on the planet.

The Perth-based, $178 million market-capped company is looking at debt financing options for developing Manono with several parties in Europe, the Middle East and South Africa.

According to management, discussions are progressing well with its prospective lenders, who have been carrying out due diligence on the potential long-term mining operation since its Manono data room was made available a few months ago.

Meanwhile, AVZ said its discussions are also advancing well with multiple potential offtake customers for significant volumes of spodumene concentrate and even lithium sulphate and tin.

Tenders for the Manono processing plant and associated infrastructure are currently being evaluated and the company intends to award contracts once management has made a final investment decision, which AVZ indicated in a presentation last month is expected some time this month but still “dependent on financing activities”.

The definitive feasibility study on Manono completed this year has forecast a whopping EBITDA of US$8.35 billion and a profit after tax of US$3.77 billion over the initial modelled 20-year life of the proposed mine.

AVZ owns 65 per cent of the project currently.

Manono’s net present value, discounted at 10 per cent, has been calculated at US$2.34 billion before tax, and the project shows an internal rate of return before tax of 53.15 per cent based on the CAPEX figure of US$545 million, with an impressive payback period of just one-and-a-half years pre-tax.

The project’s latest stated indicated and measured resources for the Roche Dure deposit of 269 million tonnes represent arguably the world’s largest mineable primary spodumene resource, says AVZ. Tonnes in the inferred category lift the overall resource figure to a monster 400Mt going 1.65 per cent lithium oxide.

Proved and probable ore reserves at Manono stand at 93Mt grading 1.58 per cent lithium oxide and are forecast to support production of 13.72Mt at 6.1 per cent lithium concentrate and 900,000 tonnes of primary lithium sulphate over the initial mine life of 20 years.

 

Is your ASX listed company doing something interesting? Contact: matt.birney@businessnews.com.au

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