Australian mineral exploration firm, AVZ Minerals Ltd. has reportedly signed a deal with private investment firm, CATH for the development of the Manono Lithium & Tin Project in the Democratic Republic of Congo.
Under the terms of the deal, CATH will gain a 24% ownership stake in a multi-faceted joint venture to build the project.
Furthermore, CATH will pay US$240 million in cash for the interest and a further sum to cover its pro-rata share of Manono development costs. The contract's overall value exceeds US$400 million, with the ultimate project development costs still to be determined.
AVZ's managing director, Nigel Ferguson said that this is a pivotal day for the organization and all its stakeholders as they move forward to make the Manono Project a top worldwide producer of lithium products.
For the record, Pei Zhenhua and CATL (Contemporary Amperex Technology Co Limited), are the major players in the worldwide lithium conversion and lithium-ion battery industries and jointly own CATH.
Sources cite that the transaction's profits will cover the bulk of the project's overall financing requirements. At the same time, AVZ will maintain a controlling 51 percent interest in the Manono Project and its role as lead developer following the transaction's completion.
The offtake agreement between AVZ and Yibin Tianyi will be allocated to CATH and extended to include SC6 offtake for the duration of the Manono Project.
CATH will also enter into a long-term offtake or tolling arrangement for Primary Lithium Sulphate (PLS) generated from a PLS calcining facility constructed in a joint venture with CATH.
Additionally, AVZ and CATH will evaluate and advance a study to increase annual production capacity by expanding Dense Media Separation (DMS) annual production capacity from 4.5 million tons throughput producing about 700,000 tons of SC6.