AVZ raises $75m for DRC project

AVZ plans to spend $75 million raised from institutional investors to start early site works at its Manono project but conceded a mining licence was taking longer than previously anticipated. 

In an ASX release this morning, the West Perth-based minerals explorer said it had received firm commitments to raise capital from existing shareholders including cornerstone investor Suzhou CATH Energy Technologies.

Proceeds from the fundraising are set to go towards working capital and starting early works at the lithium and tin project, including securing long lead items and roads, bridges and camp.

The project is situated in south of the Democratic Republic of Congo (DRC) in central Africa.

On offer were AVZ Minerals shares for 50 cents each, discounted around 22 per cent on the company’s last closing price.

AVZ says the placement closed heavily oversubscribed with applications proportionately scaled back.

Around 150 million new AVZ Minerals shares are expected to settle later this month.

The raise piqued interest from “several tier 1” North American and Australia institutions according to AVZ, with the balance supported by existing investors including CATH.

The company last called for capital in July, raising $40 million from sophisticated and institutional investors.

AVZ owns 75 per cent of Manono, with the remainder owned by the Democratic Republic of Congo government.

AVZ managing director Nigel Ferguson was pleased with the raise but said the mining licence award had taken longer than anticipated.

“We are in close consultation with the DRC Government authorities that are undertaking the Mining Licence assessment and are confident of delivering a favorable outcome for all stakeholders - most importantly the people of the DRC and our shareholders,” he said in a statement.

“This capital raising marks an important milestone in our journey to develop the Manono Project which strengthens the financial position of the Company and will assist to keep the Project timeline within reach, despite the award of our Mining Licence taking longer than we had previously anticipated.”

Joint manager and bookrunner to the placement were Cantor Fitzgerald and Curran & Co.

In other capital raising news, Ironbark Zinc wrapped up a $4 million raise to continue due diligence works at the Citronen Zinc-Lead Project in northeast Greenland.

Ironbark is set to issue 90,909,091 fully paid ordinary shares at 4.4 cents per share under the placement.

Shares are up 23.4 per cent to trade at 5.8 cents.

AVZ Minerals shares were down 6.98 per cent to trade at 60 cents.