AVZ Minerals confirms confidential deal mentioned in now-deleted tweet
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Lithium darling AVZ Minerals has told the ASX a “confidential” deal mentioned in a Twitter post by one of its corporate advisors was not material.
AVZ went into a trading halt on Thursday after it was queried over the tweet by an ASX representative.
According to an ASX letter published on Friday, the now-deleted tweet was published by Michael Langford (@ML_SuperNinja) and said:
1. Ministery of Land & Resources “Escondida of Lithium”
2. Bank of China International Coverage – AVZ “BUY”.
3. SRK Consulting “enormous potential”
4. Lithium intercepts 50x+ > peer avg.
5. BNBT on site / MOU
6. Tinci + Confidential MOUs
What other #lithium Co has this?”
The ASX placed the words “Confidential MOUs” in bold in its query and drew attention to the phrase.
An MOU or “Memorandum of Understanding” is a non-binding agreement that generally comes before a legally binding document.
The author of the tweets, Mr Langford, is an executive director of AVZ advisor Airguide.
AVZ pays Singapore-based consultant Airguide $US25,000 a month for consulting. It can also earn up to 15 million shares based on performance hurdles and a cut of capital raisings made via Airguide introductions.
On Friday AVZ confirmed in an ASX announcement hat it had signed a “Memorandum of Understanding (“MOU”) with an undisclosed third party on 2 October 2017 (“undisclosed party”) which has not been announced to the market”.
However, AVZ said it did not “consider that a reasonable person would expect the announcement of this confidential MOU to have a material effect on the price or value of the company’s securities”.
AVZ said the deal did not require disclosure — and negotiations had not progressed on the agreement.
AVZ conceded that it was not appropriate for Mr Langford as a principal of Airguide and an advisor to the company, to publish tweets about AVZ with potentially market-sensitive information that had not been released to the ASX — or without disclosing the relationship between AVZ and Airguide.
“The company has formally requested Mr Langford to refrain from disclosing any potentially market sensitive information, that has not been announced on the ASX Markets Announcements Platform, regarding the company via Twitter or any other form of social media.
“The company has also requested that any posts on Twitter in regard to AVZ be cleared by the company prior to release.”
AVZ is undertaking a 20,000 metre drilling program at its Manono lithium project in the Democratic Republic of the Congo.
In September, AVZ chairman Klaus Eckhof announced the Manono project as “one of the finest” pegmatite intercepts ever reported”.
Pegmatites are rocks formed from lava or magma that often contain rare earth minerals and crystals. They are the primary source of lithium.
In its quarterly update released on Friday, AVZ said the initial drilling program would be completed mid-year.
“Four drilling rigs were operational on site by mid-March with a fifth rig mobilised from South Africa. ”
Mr Klaus said last month that “geological logging has proven that Manono is substantial in size and recent surface rock chip assay [lab test] results from the southern extension of the Carriere de l’Est Pegmatite confirms additional potential within this area.”
AVZ is well funded after a recent $15 million capital raising.
The explorer spent about $4.1 million in the March quarter, leaving $24 million in the kitty.