AVZ chairman takes profits ahead of crazy-big lithium discovery
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Two days after AVZ Minerals chairman Klaus Eckhof sold more than a quarter of his shareholding, the company has released very positive drilling results.
Results from AVZ’s (ASX:AVZ) Manono Lithium Project in the Democratic Republic of Congo (DRC) show one of the “longest pegmatite intercepts ever reported”, the company said.
Pegmatites are rocks formed from lava or magma that often contain rare earth minerals and crystals. They are the primary source of lithium.
Lithium oxide found at a depth of 251 metres and measured at 1.48 per cent volume “would have to be one of the finest” pegmatite intercepts ever reported said Mr Eckhof.
The results also showed tin at 913 parts per million (ppm).
“It represents the first drill hole ever completed into the Carriere de L’Est pegmatite, Manono Sector of the Manono Lithium Project,” Mr Eckhoff said.
“It is also the largest pegmatite within the Manono Kitotolo system. To our knowledge, this is the longest pegmatite intercept ever reported.”
Mr Eckhoff ruffled some investor feathers on Friday evening when he sold 25 million shares at 15.5c each.
The shares represented about 28 per cent of his total shareholding and he ceased as a substantial shareholder.
Precision Funds Management’s Tim Weir called the results “fairly spectacular”, and while he didn’t begrudge Eckhoff taking profits he acknowledged it wasn’t a good look.
He says the results coming out of the Manono Lithium Project are some of the most impressive seen in the lithium space globally — although he won’t go so far as to say it’s the biggest deposit in the world.
“The first discovery hole that they released was spectacular,” he told Stockhead, which returned results at 202.8 metres depth at 1.57 percent lithium oxide and 1078 ppm tin.
That brought an opportunity to raise $15 million from investors, and attracted $13 million from China’s Huayou Cobalt Group.
The seam just keeps giving: last week AVZ said it had another intersect at 235.03 metres at 1.66 per cent lithium oxide and 1001 ppm tin.
“It’s a massive intersection in terms of width, and the grade is high enough to make it economic,” Weir said.
AVZ was down 4 per cent in Monday morning trade.
However Mr Weir said a market cap of $209 million was very high for an exploration company that didn’t yet have a mine.