ASX-listed AVZ Minerals announced that Huayou International Mining (HONGKONG) Limited would acquire an 11% stake in the company for Huayou, worth US$13.02 million.
In a statement, Perth-based AVZ said that the placement to Huayou will comprise 186 million shares at an issue price of 7 cents per share, together with 186 million attaching options exercisable at 10 cents and expiring 20 months from the date of issue to raise US$13 million. Further, Huayou will also have the right to appoint a nominee to the AVZ Minerals board.
“We are extremely pleased to have attracted a strategic investor of the calibre of the Huayou Cobalt Group,” said AVZ Minerals executive chairman, Klaus Eckhof. “They have a proven track record in operating in the DRC, and in developing and financing mines. We look forward to working with Huayou to bring the Manono project into production on the fastest possible timeline.”
The proceeds of the raising will be used for the planned drilling and initial metallurgical test work programs at the Manono project in the south of Democratic Republic of Congo (DRC), as well as ongoing corporate and administration costs.
Huayou CEO, Hongliang Chen commented: “We look forward to building a strong relationship with AVZ Minerals and to work together to develop the exciting Manono project. We believe the strong demand for lithium will continue to grow in the years ahead and Huayou can assist to realise the significant potential of the Manono project during this growth phase.”
AVZ Minerals intends to embark on a significant diamond and RC drilling program commencing late Q3 / early Q4, with the objective of defining mineral resources to JORC 2012 standard by early 2018.