Special Report: AVZ Minerals has started its transition from explorer to miner, with the DFS almost done and site works now underway at its Manono lithium and tin project in the DRC.

The lithium hopeful is 95 per cent of the way through the definitive feasibility study (DFS), which is on track for release by the end of March.

An extended scoping study has already shown that the project has the potential to be a world-class, long-life mine with a net present value (NPV) of up to $US2.63 billion ($3.92 billion) before taking taxes and royalties into account.

And internal rate of return (IRR) was estimated at 64 per cent.

Both the NPV and IRR are used to estimate potential profitability, and the higher above zero they are, the better the prospective economics of the project.

In the process of completing the DFS, AVZ undertook a series of transport studies to find the most suitable and cost-effective method of transporting Manono’s lithium products to port.

These have now been completed and will be included in the DFS.

Last month AVZ subsidiary AVZ Power has signed a crucial memorandum of understanding (MoU) with the Democratic Republic of Congo government to explore refurbishment of the Mpiana Mwanga hydro-electric power station and associated power grids.

Cheap hydro-electric power represents huge upside for the globally significant Manono project.

And investors will no doubt be eager to find out whether the DFS confirms or (even better) enhances the numbers.


Becoming a ‘fully-fledged’ miner

The market was also excited by news site works had started.

“We are no longer an exploration company having commenced site works for mining and are migrating towards becoming a fully-fledged mining company,” managing director Nigel Ferguson said.

“With the DFS expected soon, financing and offtakes to soon follow, we are stepping up to ensure a successful mining operation is established at Manono.”

That sentiment was certainly reflected in AVZ’s share price today, which climbed over 11 per cent to an intra-day peak to 6.9c.




Already, 30 single-person accommodation units have been built and will be followed by additional accommodation for up to 150 construction personnel, associated kitchen, mess, laundry and recreational facilities.

The early works program also includes construction of a sewage treatment facility, an RO water treatment plant and additional power facilities for “Camp Colline”.


Potential resource upgrade on the cards

With the dewatering of the main Roche Dure pit also nearly complete (about 99 per cent done), AVZ can now undertake further infill drilling of material underneath the pit.

This could potentially lead to an upgrade in the resource to the highest confidence measured category.

AVZ stressed that the time it would take to conduct this extra sampling would not impact the timing of the release of the DFS.



Power up: AVZ to explore refurb of hydro-electric power station near Manono lithium project

African mining veteran strengthens AVZ board ahead of Manono lithium development

Chinese strategic investor places its lithium supply faith in AVZ

This story was developed in collaboration with AVZ Minerals, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.