AVZ raises $5m for lithium JV

Shares in junior explorer AVZ Minerals have skyrocketed on news the Perth company has struck an agreement to acquire a majority stake in a lithium mine in Africa, and has raised $5 million to fund the deal.

AVZ told the market today it would acquire a 60 per cent interest in the Manono project in the Democratic Republic of Congo, through the payment of $US6 million in cash to DRC-owned enterprise La Congolaise D’exploitation Minere SA, and a $US750,000 payment to privately owned business Dathomir Mining Resources.

Upon completion of the deal, La Congolaise would hold a 30 per cent interest in the project, with Dathomir owning 10 per cent.

The announcement sent AVZ shares soaring to highs not seen since 2012; they were up 73 per cent to 3.3 cents each ahead of the close of trade.

AVZ also announced a management shake-up, with managing director Klaus Eckhof replacing Patrick Flint as executive chairman, while Mr Flint will remain on the board as a non-executive director.

Mr Eckhof has also brought in Nigel Ferguson as a technical director.

Both Mr Ferguson and Mr Eckhof are behind the $4.5 million IPO of Perth-based gold exploration company Huntsman Resources, which holds its flagship Mambasa project in the DRC.

In order to fund the acquisition, AVZ has engaged Hartleys to mandate a $5 million capital raising, through the placement of up to 250 million shares at 2 cents each.

“Based on available information, AVZ considers there is significant potential for the discovery of significant lithium, tin and tantalum, not to mention other economic minerals, at Manono within the Manono-Kitatolo LCT pegmatite,” AVZ said in a statement.

“Following (an initial review program), AVZ would move quickly to undertake detailed drilling within the main target area and commence initial metallurgical test-work, with the objective of progressing to project feasibility as soon as possible thereafter.”