China’s Yibin Tianyi is taking a 12% stake in Australia’s AVZ Minerals (ASX: AVZ) for A$14.1 million (US$9.6 million).
The Perth-based mining company says it will use the funds to increase its ownership by 5% to 65% in the Manono lithium and tin project in the Democratic Republic of Congo.
AVZ Minerals will acquire the additional 5% stake from privately held Dathomir Mining Resources. Dathomir and state-owned enterprise La Congolaise d’Exploitation Minière own 10% and 30% of the project, respectively.
Yibin Tianyi is backed by China’s largest manufacturer of batteries for electric vehicles, Contemporary Amperex Technology, and Shenzhen-listed Suzhou TA&A Ultra Clean Technology.
Under the placement, Yibian Tianyi acquired 314 million common shares of AVZ Minerals at A45¢ per share.
The funds will allow AVZ to start early development works at the Manono project while a feasibility study is being completed.
Manono, 500 km north of Lubumbashi, hosts lithium pegmatites with a strike length of more than 13 kilometres.
AVZ Minerals and Yibin Tianyi plan to negotiate an offtake agreement from the Manono project.
Yibin Tianyi has also agreed not to acquire an aggregate interest in more than 19.9% of AVZ Minerals’ shares within 12 months without prior approval from AVZ Minerals’ board.
Yibin Tianyi is constructing the first phase of its lithium chemical plant in Yibin, China, and expects to complete it by the second quarter of next year. The second phase of the expansion is expected to be completed by 2023 or 2024.
At press time, AVZ was trading at 4.6¢ per share within a 52-week range of 3.7¢ to 9.6¢.
The company has 2.3 billion common shares outstanding for a A$105-million market capitalization.