AVZ Minerals ‘confident’ despite Manono dispute remaining unresolved

AVZ Minerals says it is confident of a positive outcome in the dispute over its Manono lithium project in the Democratic Republic of Congo, despite the company extending the suspension of its shares.

The Nigel Ferguson-led company is locked in arbitration proceedings in the International Chamber of Commerce in Paris with a subsidiary of Zijin Mining over a claim that the Chinese company had acquired a 15 per cent shareholding in AVZ’s Manono joint venture company Dathcom from DRC-State owned enterprise Cominiere.

AVZ holds a 75 per cent stake in Dathcom with the 25 per cent balance held by Cominiere.

AVZ argues any purported transfer of a 15 per cent interest to the Zijin subsidiary, named Jin Cheng, would be a material breach of the pre-emptive rights contained in the existing Dathcom shareholders agreement.

The company has previously said it would take all necessary action to resist Jin Cheng’s “vexatious and meritless claims” and to protect Dathcom’s and its interests.

“The company has considered Jin Cheng’s claims in detail and considers them to be spurious in nature, without merit, containing fundamental and material errors, andhaving no substance or foundation in fact or law,” the company said last month.

On Friday, the company said it regretted the voluntary suspension period had lasted longer than was intended but that it had been actively engaged with the highest levels of the Government with respect to the grant of the mining licence at Manono and an update regarding its exploration rights.

“While the company remains confident of a positive outcome, it will be necessary to continue the period of voluntary suspension as the subject of the initial trading halt request remains incomplete,” AVZ said.

Last year AVZ said it had locked in $US240 million in funding from China’s Suzhou CATH Energy Technologies, which would give the company a 24 per cent stake in Manono, which has an estimated capital cost of $US545m.

CATH is jointly owned by Chinese billionaire battery investor Pei Zhenhua and the world’s biggest battery maker, China’s CATL.

In a separate statement, AVZ said diamond drilling had commenced at Manono with the aim of significantly increasing lithium resources and reserves at the Roche Dure deposit.

The company said equipment purchased as part of its early works program at Manono had started to arrive at site.

Shares in AVZ have been suspended since May, having last changed hands for 78¢.

AVZ was one of last year’s star share price performers rising 387 per cent over the 12-month period.