24/06/19 AVZ Minerals Limited (ASX: AVZ, “The Company”) is pleased to advise that it has executed a Share Sale Purchase Agreement (“Agreement”) with Dathomir Mining Resources SARL (“Dathomir”) to increase AVZ’s equity in the Manono Lithium and Tin Project (Licence PR13359).
Following ongoing discussions over the last few months, Dathomir has agreed to sell a 5% equity share in Dathcom Mining SAS (“Dathcom”) to AVZ for a total consideration of US$5,500,000. Dathcom holds 100% of the Manono Lithium and Tin Project concession. Under this Agreement, this purchase represents a highly accretive transaction for AVZ shareholders with minimal upfront payment. The first tranche payment of US$500,000 is to be paid within 14 days of execution and the balance of the consideration can be paid at any time within a period of 36 months from execution of the Agreement. At the completion of the transaction, AVZ’s equity interest in the Project licence will increase to 65%, representing an NPV10 value added, based on the recent 5Mtpa Scoping Study1 of some US$130M to approximately US$1.68Bn for AVZ’s 65% equity interest (based on ±35% accuracy and including US$78M in capital contingency).
21/09/20 AVZ Minerals Limited (ASX:AVZ or “the Company”) advises it has executed a Share Sale Purchase Agreement (“Agreement”) for an additional 10% equity stake in Dathcom Mining SA (“Dathcom Mining”) from its joint venture partner, Dathomir Mining Resources SARLU (“Dathomir Mining”). Dathcom Mining holds 100% of the Tier 1 Manono Lithium and Tin Project (“Manono Project”).
Under the Agreement, AVZ has paid US$500,000 to Dathomir Mining as an advance payment. The remaining US$15 M (US$15,000,000) will be paid to Dathomir Mining at any time within 12 months of the Agreement being executed, or as soon as AVZ secures a minimum of US$50 M project financing. Should payment not be made within 12 months of executing the Agreement, AVZ will forego its US$500,000 advance payment and lose the rights to secure the additional 10% equity in the Manono Project.
Alternatively, the Agreement provides for AVZ to secure a minimum 2.5% equity shareholding in Dathcom Mining and thereafter in pro rata amounts up to the maximum 10% stake during the 12-month period.
An Extraordinary General Meeting of Dathcom Mining will need to be convened to approve the sale of Dathomir Mining’s remaining equity in Dathcom Mining to AVZ Minerals. There is no other material terms or condition precedent other than as disclosed above. As previously announced on 24 June 2019, the Company has secured 5% equity interest from Dathomir Mining for a total consideration of US$5,500,000, with an advance payment of US$500,000 made. The balance of the consideration (US$5,000,000) has not yet been paid and can be paid at any time within a period of 36 months from execution of the agreement. Upon completion of both Agreements, AVZ will own 75% of the joint venture company, Dathcom Mining SA (“Dathcom Mining”) – which holds 100% of the Manono Project Licence (PR13359). The remaining 25% of the joint venture company is owned by La Congolaise D’Exploitation Miniere SA (“Cominiere”), of the DRC government.
Dathomir Mining will no longer hold equity in the project and, as such, will no longer be required to contribute pro rata to the ongoing operating expenses of the Manono Project.
30/10/20 Activities Report for the Quarter ending 30 September 2020: Highlights
1) Secured rights to additional 10% equity in Manono Lithium and Tin Project for US$15.5M, taking its total ownership to 75% on completion of the transaction
2) Ongoing discussions held to acquire additional equity in the Manono Project
02/07/21 Capital raising Presentation
Ownership before Placement - 60% owned by AVZ Minerals Limited (15% under Option from Dathomir Mining Resources)
21/07/21 Operational Update
Completed $40m capital raising, with funds in part used to increase AVZ’s interest in the Project to 75%
18/08/21 Manono Lithium and Tin Project Corporate Update
Earlier this month, Company representatives met with a high-ranking DRC Government delegation which included senior advisors to the President of Mines & Energy, Ministry of Industry, Ministry of Mines, Ministry of Planning & Ministry of Finance. The delegation provided unanimous support of the Manono Project based on the body of work completed by AVZ, which was submitted to the meeting of multi-sectorial Ministers with the objective of considering the Collaboration Development Agreement between the DRC Government and AVZ. A meeting of the Council of Ministers is scheduled to occur in the coming weeks resulting in a final decision on the Collaboration Development Agreement, which encompasses support of the development of natural resources (mining and transformation industries) and infrastructure (roads, water and electricity). A decision around the proposed MSEZ is expected shortly after finalising the Collaboration Development Agreement, which will require provision of further detailed financial information and investor considerations in the MSEZ.
AVZ continues to enjoy a supportive, collaborative and cooperative working relationship with the DRC Government officials and is highly confident of receiving all necessary permitting and licencing requirements for the Manono Project.
AVZ’s project equity increased to 75% AVZ has increased its interest in the Manono Project from 60% to 75% by exercising the options to purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20M (~AUD$27M).
30/09/21
AVZ Minerals Limited Financial Report 30 June 2021
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Cash Flows from Investing Activities
Payment of deferred consideration - (2,162,731)
Advanced payment to Dathomir (additional 10%) ($685,235)
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ii. Control over subsidiaries
During 30 June 2017, AVZ Minerals Limited acquired 60% of the issued shares of Dathcom Mining SA (previously known as Dathcom Mining SAS) by the issue of shares and cash. Under the terms of shareholders agreements, the Company is at this stage solely responsible for funding exploration activities and therefore has control over the day-to-day activities and economic outcomes of Dathcom Mining SA. Future changes to the shareholders agreements may impact on the ability of the Company to control Dathcom Mining SA.
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Notes to the Consolidated Financial Statements for the year ended 30 June 2021
8. Exploration & Evaluation Expenditure
Acquisition of further interest (i) $685,235
(i) On 21 September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom Mining Resources SA from its joint venture partner, Dathomir Mining Resources SARL for US$15.5 million. Under the agreement, AVZ paid US$500,000 in September 2020 to Dathomir as an advance payment, with the remaining US$15M to be paid to Dathomir at any time within 12 months of the Share Sale Purchase Agreement being executed, or as soon as AVZ secures a minimum of US$50 million project financing. Should the payment not be made within 12 months, AVZ will forego its US$500,000 advance payment and lose the rights to secure the additional 10% equity in the Manono Lithium and Tin Project.
The value of the Group’s interest in exploration expenditure is dependent upon:
- The continuance of the Company’s rights to tenure of the areas of interest;
- The results of future exploration; and
- The recoupment of costs through successful development and exploration of the areas of interest, or alternatively, by their sale.
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13. Financial Liabilities (continued)
On 24 June 2019, the Company announced that it had executed a Share Sale Purchase Agreement (“Agreement”) with Dathomir Mining Resources SARL to increase the Group’s equity in the Manono Lithium and Tin Project for a total consideration of US$5,500,000
. Under the Agreement, the first tranche payment of US$500,000 is to be paid within 14 days of execution and the balance of the consideration can be paid at any time within 36 months from execution of the Agreement.
The first tranche payment of US$500,000 was paid in July 2019. The value of the deferred consideration is the board’s assessment of the value of contracted future payments issued under the agreement for the acquisition of Dathcom Mining SA. The fair value is based on assumptions to present value the future payments based on a discount rate of 12%. The principal payments are contractually required in U.S. dollars and have been converted to Australian dollars at 30 June 2021.
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21. Commitments and Contingencies
On 21 September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom Mining SA from its joint venture partner, Dathomir Mining for US$15.5 million. Under the agreement,
AVZ has paid US$500,000 to Dathomir Mining as an advance payment, with the remaining US$15 million committed to be paid to Dathomir Mining at any time within 12 months of the Share Sale Purchase Agreement being executed, or as soon as AVZ secures a minimum of US$50 million project financing. Since the end of the reporting period, AVZ has purchased Dathomir Mining’s 15% shareholding in Dathcom Mining SA (Refer to Note 26). There are no other commitments or contingent liabilities outstanding at the end of the year.
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26. Events Occurring after the Reporting Date
In July 2021, the Company issued 307,692,308 new shares at $0.13 per share via a share placement to raise $40 million (before costs) from high-quality institutional, sophisticated and professional investors. Proceeds from the placement, increased AVZ’s cash reserve, which allowed the Company to increase its interest in the Manono Project from 60% to 75%. In August 2021, the Company increased its interest in the Manono Project from 60% to 75% by exercising options to purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20 million.
29/10/21 AVZ Minerals Limited Annual Report 30 June 2021 AVZ Minerals Limited Annual Report 30 June 2021
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AVZ secured the rights to an additional 15% equity in the Manono Project – taking our total interest to 75% on completion…..
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On the corporate front, we completed a highly successful and significantly oversubscribed Share Placement just after the completion of the 2021 Financial Year, which resulted in the Company raising A$40 million (before costs) with funds (in part) used to increase our equity interest in the Manono Project to 75%. The Share Placement was well supported by high-quality institutional investors throughout Australia, Europe, North America, Singapore, Malaysia and the Middle East.
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Manono Lithium and Tin Project (“Manono Project”) Democratic Republic of Congo (DRC)
Highlights: Secured rights to an additional 10% equity in the Manono Project for US$15.5 million, giving AVZ the option to increase to 75% ownership of the Manono Project on completion of the
Page 13
Review of Operations
Corporate - Equity in Manono Project
In September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom Mining SA (which holds 100% of the Manono Project) from its joint venture partner, Dathomir Mining Resources SARLU (“Dathomir Mining”). Under the Agreement, AVZ paid US$500,000 to Dathomir Mining as an advance payment with the remaining US$15 million to be paid at any time within 12 months of the Agreement being executed or as soon as AVZ secured a minimum US$50 million in project financing. As announced in June 2019, the Company had previously secured a 5% equity interest from Dathomir Mining for a total consideration of US$5.5 million, with an advance payment made of US$500,000. The balance of the consideration (US$5 million) was to be paid at any time within 36 months from execution of the Agreement. AVZ now owns 75% of the joint venture company, Dathcom Mining SA, following completion of both Agreements.* The remaining 25% of Dathcom Mining is owned by La Congolaise d’Exploitation Minière SA (Cominiere), of the DRC Government over which AVZ has a pre-emptive right to purchase further project equity.
Page 14 - Confirmation of Project Ownerships
View attachment 15397
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Consolidated Statement of Cash Flows For the Year Ended 30 June 2021
Cash Flows from Investing Activities
Advanced payment to Dathomir (additional 10%) ($685,235)
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Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1. Summary of Significant Accounting Policies
During 30 June 2017, AVZ Minerals Limited acquired 60% of the issued shares of Dathcom Mining SA (previously known as Dathcom Mining SAS) by the issue of shares and cash. Under the terms of shareholders agreements, the Company is at this stage solely responsible for funding exploration activities and therefore has control over the day-to-day activities and economic outcomes of Dathcom Mining SA.
Future changes to the shareholders agreements may impact on the ability of the Company to control Dathcom Mining SA.
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21. Commitments and Contingencies
On 21 September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom Mining SA from its joint venture partner, Dathomir Mining for US$15.5 million. Under the agreement, AVZ has paid US$500,000 to Dathomir Mining as an advance payment, with the remaining US$15 million committed to be paid to Dathomir Mining at any time within 12 months of the Share Sale Purchase Agreement being executed, or as soon as AVZ secures a minimum of US$50 million project financing. Since the end of the reporting period, AVZ has purchased Dathomir Mining’s 15% shareholding in Dathcom Mining SA (Refer to Note 26). There are no other commitments or contingent liabilities outstanding at the end of the year.
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26. Events Occurring after the Reporting Date In July 2021, the Company issued 307,692,308 new shares at $0.13 per share via a share placement to raise $40 million (before costs) from high-quality institutional, sophisticated and professional investors. Proceeds from the placement, increased AVZ’s cash reserve, which allowed the Company to increase its interest in the Manono Project from 60% to 75%. In August 2021, the Company increased its interest in the Manono Project from 60% to 75% by exercising options to purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20 million.
29/10/21 Activities Report for the Quarter ending 30 September 2021
Completed A$40 million capital raising (before costs)
Exercised options to acquire Dathomir’s 15% shareholding in Dathcom Mining
31/01/22 Activities Report for the Quarter ending 31 December 2021
AVZ raised A$75 million (before costs) supported by leading global institutions and sophisticated investors, including Suzhou CATH Energy Technologies (“CATH”); Raising provides that c.90% of Project capital funding required per the April 2020 DFS* is secured on closure of CATH deal. AVZ announced it would use the funds to: Negotiate the extra 15% equity in Manono from the Government from a strong cash position
Project Funding Discussions Management continued working towards the appointment of a Mandated Lead Arranger (“MLA”) to lead the syndicated debt funding facility for the Manono Project. Subject to closing the deal with CATH, more than 50% of project funding will be secured enabling a Final Investment Decision (“FID”). FID will kickstart project construction and ensure Dathcom will have sufficient equity capital to fund the first 6-8 months of project construction capital, with Financial Close (“FC”) for debt financing expected in Q2 2022. Approximately 90% of Project capital funding required per the April 2020 DFS* will be secured on closure of CATH deal** with AVZ working towards securing further debt funding arrangements for the balance of Project capital required.
16/03/22 AVZ Minerals Limited Interim Financial Report 31 December 2021
Completed a total of A$115 million in capital raisings (before costs); Increased direct interest in the Manono Project from 60% to 75% by exercising options to acquire Dathomir’s 15% shareholding in Dathcom Mining; Progressed discussions with potential financiers for the balance of development capital required for the Manono Project
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Capital Raising / Project Financing AVZ completed two highly successful, oversubscribed share placements during the period, raising a total of A$115 million (before costs).
In early July 2021, the Company raised A$40 million (before costs) via the issue of 307,692,308 shares at an issue price of $0.13 per share while in early December, the Company raised A$75 million (before costs) via the issue of 150,000,000 shares at an issue price of $0.50 per share. The share placements were well supported by several Tier 1 North American and Australian institutions along with global institutions in Europe, Singapore, Malaysia and the Middle East, as well as existing sophisticated shareholders, including CATH.
Proceeds from the share placements have
and will allow AVZ to (i) increase AVZ’s equity in the Manono Project from 60% to 75%
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Corporate Equity in Manono Project During the period, AVZ increased its direct interest in the Manono Project from 60% to 75% by AVZI exercising the two put options granted by Dathomir Mining Resources SARLU (“Dathomir”); thereby securing Dathomir’s minority 15% shareholding in Dathcom Mining SA (“Dathcom Mining”) for US$20 million (~A$27 million). Replacement share certificates in Dathcom Mining have been awarded and registered at the courts in the DRC.
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Other than the above, no other matters or circumstances have arisen since the end of the half-year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs in future financial years
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