ASX asks lithium play AVZ to ‘please explain’ statements in advertisement
Mining & Resources
The ASX wants a 'please explain' from AVZ over an ad that appeared in the AFR this week. Pic: Getty
The ASX has lobbed more questions at lithium explorer AVZ Minerals – this time over an advertising feature that appeared in a newspaper on Monday.
The bourse suspended AVZ yesterday – its third ASX-imposed suspension in the past month – and asked the market darling to answer several questions.
Of particular interest to the ASX was a statement in the newspaper article made by managing director Nigel Ferguson that AVZ’s Manono project in the Democratic Republic of the Congo the “is the world’s largest undrilled lithium resource target”.
The ASX asked AVZ to “address the requirements of clause 17 of the JORC Code and the fact that the company has not yet defined a JORC Code compliant mineral resource estimate for the Manono project”.
JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee.
AVZ said in its response to the ASX that the statement was based on the Manono project’s stated exploration target in comparison to its peers.
The company also released a separate statement to the market late Monday retracting two statements it made in relation to the size of the resource it hopes to drill out at Manono.
The article stated that AVZ will “focus on the Roche Dure pegmatite and hopes to drill out somewhere between 300-400 million tonnes, and then work on infill drilling approximately 150-200 million tonnes of measured resources”.
It also said the Manono project has a “potential total resource of between 1.25 to 1.5 billion tonnes and an average grading around 1.5 per cent lithium oxide”.
AVZ explained that the last statement was intended to refer to its exploration target of 1 to 1.2 billion tonnes of 1.25 to 1.5 per cent lithium.
The company has witnessed a seven-fold increase in its share price from this time last year — with shares reaching as high as 37c in January.
Shares were down 2.2 per cent at 22.5c in early Tuesday trade.
AVZ has been in the spotlight since late March when the ASX suspended the company and asked it to explain why pictures of drill core from its Manono project appeared on Twitter before results of recent drilling had been announced to the market.
The company has received heat over a couple of Tweets made by Michael Langford, who is an executive director of Singapore-based consultant Airguide — which is engaged as an advisor to AVZ.
AVZ declined to comment.