AVZ Minerals has secured another Chinese backer for its Manono lithium and tin project in the Democratic Republic of Congo amid softening market conditions.
Yibin Tianyi plans to execute a placement of $14.1 million in AVZ, giving it a 12 per cent stake in the company upon completion.
AVZ will use the funds raised to complete its acquisition of a further 5 per cent project interest in Manono from co-owner Dathomir Mining. This will boost AVZ’s overall interest in the Manono project to 65 per cent.
AVZ will also use funds raised from Yibin Tianyi’s placement to undertake early development works at Manono while its definitive feasibility study is being completed.
Upon completion of the placement, AVZ and Yibin Tianyi will also execute a binding offtake agreement for the products from Manono.
AVZ managing director Nigel Ferguson welcomed Yibin Tianyi as a new, strategic investor in the company, especially given the backing it has from Contemporary Amperex Technology (CATL).
Yibing Tianyi is also backed by Shenzhen-listed company Suzhou TA&A Ultra Clean Energy.
“Their intention to become one of the largest global lithium chemical producers certainly complements our vision of developing the largest hard rock lithium deposit in the world,” Ferguson said.
The equity placement is subject to AVZ shareholders’ approval and Yibin Tianyi obtaining regulatory approvals.
Yibin Tianyi is constructing its phase one lithium chemical plant in Yibin, China, which is expected to complete by the second quarter of 2020.
The company plans to enter into phase two expansion, with completion anticipated in 2023/2024.
AVZ also formed a strategic partnership with Zhejiang Huayou Cobalt and completed a $9.8 million placement involving Lithium Plus and Huayou Cobalt Group earlier this year.