AVZ to raise $14m

Lithium explorer AVZ Minerals has announced it would raise $14.1 million to a new strategic investor based in China.

The company will issue approximately 314 million shares at 4.5 cents per share to Yibin Tianyi Lithium, which will hold a 12 per cent stake in AVZ upon completion of the placement.

AVZ currently holds a 60 per cent stake in Dathomir Mining’s Manono lithium and tin project, located in the Democratic Republic of Congo.

AVZ Minerals managing director Nigel Ferguson said the capital raised would fund AVZ’s acquisition of an additional 5 per cent interest in the project.

“The placement will also allow early development works to be undertaken at the Manono project while the definitive feasibility study is being completed,” he said.

“Yibin Tianyi’s intention to invest in AVZ and enter into a binding offtake arrangement underpins the tier 1 quality of our Manono project," Mr Ferguson said.

He added Yibin Tianyi is backed by China’s largest battery manufacturer, Contemporary Amperex Technology.

Yibin Tianyi is currently constructing its phase 1 lithium chemical plant in Yibin, China, and expects it to be completed by the second quarter of 2020, AVZ said.

The company’s phase 2 expansion is expected to be completed by 2024.

Earlier this month, AVZ commenced environmental and social impact studies for the Manono site.

Shares in AVZ Minerals were up 6.98 per cent to trade at 4.6 cents per share, as at 2:55pm AEDT.