AVZ closes $10.7m financing, steps on the gas at Manono
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Special Report: AVZ is cashed up to progress development of its Manono lithium and tin project after its coffers were filled by a $10.7m placement from its strategic partner.
The company has closed the placement of 237.5 million shares in the company priced at 4.5c to Yibin Tianyi Lithium Industry Co, which is poised to become one of China’s largest lithium hydroxide producers.
AVZ Minerals (ASX:AVZ) says that it is now debt free after repaying a $US1m ($1.55m) convertible loan and will soon start early works at the Manono project in the Democratic Republic of Congo.
“I am delighted to finally welcome Yibin Tianyi as a shareholder of AVZ,” managing director Nigel Ferguson said.
“Yibin Tianyi has always wanted to work with AVZ to progress the development of our Manono Project and I now look forward to finalise a formal offtake agreement with them for our lithium products.
“These funds strengthen the company’s balance sheet and allows us to progress with early development works at the Manono project while we continue to engage with potential financiers.”
The placement gives Yibin Tianyi a 9 per cent interest in the company.
In its definitive feasibility study, AVZ expects the Manono project to generate a post-tax net present value (NPV) of just over $US1bn ($1.58bn) and internal rate of return (IRR) of 33 per cent despite taking a conservative approach.
Both NPV and IRR are measures of a project’s anticipated profitability.
AVZ also estimated net profit after tax at $US3.8bn and a post-tax payback period of 2.25 years from the project.