15/12/2022 AVZ Announcement
Disclosure Clarifications – AFR Article
AVZ Minerals Limited (ASX: AVZ) (AVZ or Company) is aware of an article published by the Australian Financial Review dated 12 December 2022 (AFR Article), which the Company notes contains various unsubstantiated allegations including that the Company failed to disclose ownership disputes with Congolaise d’Exploitation Minière (Cominière), Jin Cheng Mining Company Limited (Jin Cheng), a subsidiary of Zijin Mining Group Company Limited (Zijin) and Dathomir Mining Resources SARL (Dathomir) with respect to ownership interests in the Manono Lithium and Tin Project (Manono Project).
The Company treats such allegations seriously and confirms that it has and continues to comply with the Company’s disclosure obligations under the Corporations Act and the ASX Listing Rules.
An allegation or threat by a third party that is made without legal merit or is spurious in nature, provides such circumstances that the Company, applying reasonable judgement to the facts in its possession from time to time, would consider to be insufficiently material to warrant disclosure.
Indeed, in such circumstances a reasonable person would not expect the disclosure of such information.
The Company considers that the AFR Article was written without a competent understanding of the material facts, contrary to the Company’s previous public disclosures, and using overly emotive and imprecise language, which in the Company’s opinion is likely to mislead investors.
The Company takes the opportunity to present a right of reply to certain of the allegations contained within the AFR Article in the table presented over the following page.
ASX ANNOUNCEMENT
15 December 2022
AVZ Minerals Limited
Level 2, 1 Walker Street West Perth, WA 6005 Australia
T: + 61 8 6117 9397 F: +61861182106 E:
admin@avzminerals.com.au W:
www.avzminerals.com.au
ABN 81 125 176 703
Directors
Non-Executive Chairman: John Clarke Managing Director: Nigel Ferguson Technical Director: Graeme Johnston Non-Executive Director: Rhett Brans
ASX Code: AVZ OTC Code : AZZVF
AFR Allegation Company Response
AVZ hid the dispute over title and failed to disclose the dispute during the period between July 2021 to May 2022
Rejected.
The Company considered the Cominière transfer claim in detail and assessed it as spurious in nature, without merit, containing fundamental and material errors, and as having no substance or foundation in fact or law.
Disclosure of the claim was ultimately released to ASX in May 2022 on account of the broad false and misleading rumourtrage promulgated on social media and other alternative media sources.
Refer to ASX announcements dated 4 May, 11 May, 17 June, 9 September, 20 October and 6 December 2022.
AVZ actively sought to dissuade Cominière from selling the 15 per cent stake to Zijin.
Correct, Cominière were reminded of the pre-emptive rights of AVZI around July/August 2021, preventing any such sale in breach of the Company’s contractual rights.
The transfer of the 15% was never concluded and this is now the matter of ongoing legal proceedings, commenced by Jin Cheng/Zijin against the Company claiming an abuse of majority. The Company is actively defending the proceedings and considers Jin Cheng’s/Zijin’s claims as also being spurious in nature, without merit, containing fundamental and material errors, and as having no substance or foundation in fact or law.
Refer to ASX announcement dated 11 May 2022.
Dathomir is reported to have obtained Congo court orders in December last year to have a deal annulled in which it sold a separate 15 per cent interest in Manono to AVZ for $US20 million in August 2021.
(Company note: the total amount paid to Dathomir was actually US$21M, which includes US$1M of deposits paid on signing of the SPA’s)
Rejected.
The Company considered Dathomir’s claim in detail and assessed it as spurious in nature, without merit, containing fundamental and material errors, and having no substance or foundation in fact or law.
As noted in the Company’s ASX announcement of 4 May 2022, neither AVZ, nor AVZI was a party to the court orders (or Tribunal Decision) of December 2021 to which the AFR refers. And the court orders did not purport to (nor did they, in fact, under DRC law) have any effect on:
• AVZ’s 75% equity interest in the Manono Project, to which AVZ holds good legal title); or
• the sale and purchase agreements under which AVZ acquired that interest (which AVZ has duly performed and completed and which have not been annulled by order, letter or otherwise).
As noted in the Company’s ASX announcement dated 9 September 2022, no court of law or arbitral tribunal has ruled that the Dathomir sale and purchase agreements entered into in 2019 and 2020 (Dathomir SPAs) were “cancelled”, validly terminated or not duly completed by AVZI. Both Dathomir SPAs contain and are subject to arbitration agreements, so only a properly constituted arbitral tribunal has jurisdiction to rule on such matters (and that was acknowledged by the DRC Tribunal decision dated 20 September 2022).
As noted in the Company’s ASX announcement dated 8 December 2022, AVZ has commenced (and shortly will commence) arbitrations against Dathomir to affirm AVZI’s acquisition in August 2021 of a 15% interest in Dathcom (and corresponding 15% interest in the Manono Project) from Dathomir and to put an end, once and for all, to Dathomir’s claims and to recover losses sustained from them.
Refer to ASX announcements dated 4 May 2022, 9 September 2022, 20 October 2022 and 8 December 2022.
This announcement was authorised for release by the board of directors of AVZ Minerals Limited. For further information, visit
www.avzminerals.com.au or contact:
Mr. Jan de Jager or Mr. Ben Cohen
Joint Company Secretary
AVZ Minerals Limited
Phone: +61 8 6117 9397
Email:
admin@avzminerals.com.au
Media Enquiries:
Mr. Peter Harris
Peter Harris & Associates Phone: +61 (0) 412 124 833
20/12/2022
Omni Bridgeway is funding or will fund potential claims by shareholders of AVZ Minerals Limited (ASX:AVZ) (AVZ) against AVZ.
portal.omnibridgeway.com
AVZ Minerals Shareholder Class Action
AVZ Minerals Shareholder Class Action Investigation
Omni Bridgeway has agreed to fund claims by shareholders of AVZ Minerals Limited (ASX:AVZ) (AVZ) against AVZ.
AVZ shareholders who acquired AVZ shares or an interest in AVZ shares between 17 May 2021 and 6 May 2022 inclusive are invited to sign up with Omni Bridgeway below.
The class action will be run by law firm Johnson Winter and Slattery.
Background
AVZ is an Australian public company listed on the Australian Securities Exchange under ticker code ‘AVZ’ (ISIN: AU000000AVZ6). It is engaged in the business of resource exploration and mining in the DRC. AVZ’s flagship venture is the Manono Project in the DRC, which is one of the largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits in the world.
The Manono Project is 100% owned by Dathcom Mining SA (Dathcom). AVZ (via a wholly-owned subsidiary) holds its stake in the Manono Project by holding equity in Dathcom. Two other entities also hold (or at relevant time held) equity in Dathcom, they are:
- a company called Dathomir Mining Resources SARL (Dathomir); and
- a DRC government entity called La Congolaise D’Exploitation Minière (Cominière).
On 21 April 2020, AVZ announced that it held “
rights of first refusal” over additional equity in Dathcom (and therefore the Manono Project) held by the other Dathcom shareholders.
Following a capital raising in July 2021, on 18 August 2021, AVZ announced that it had completed the acquisition of shares from Dathomir, increasing its interest in the Manono Project to 75%.
In an ASX announcement on 4 May 2022, AVZ announced a number of matters to the market in the one release. This included relevantly:
- positive news that the DRC Minister of Mines had signed a ministerial decree to award a Mining Licence for the Manono Project (subject to calculation and payment of a surface rights fee), but also
- AVZ sought to respond to “recent media speculation” which AVZ said it considered “spurious and immaterial”, namely:
- a reference to a decision by a tribunal in the DRC in respect of a claim by Dathomir regarding the validity of a share certificate and an extract of a shareholders’ registry from Dathcom (Dathomir Claim); and
- a claim that Cominière had transferred a 15% interest in Dathcom to Jin Cheng Mining Company Limited (Cominière Transfer Claim).
The share price of AVZ fell following the 4 May 2022 announcement. The closing price of AVZ shares on the ASX on 3 May 2022 was $0.99 and by the close of trade on 6 May 2022 was $0.78 (down approximately 21%).
AVZ shares were placed into a trading halt on 9 May 2022, were voluntarily suspended from quotation on 11 May 2022 and remain suspended as of 19 December 2022.
The basis of the Claim is that:
- The existence of each of the Dathomir Claim and Cominière Transfer Claim are (and would have been) material to the market as they are (and were) relevant to AVZ’s stake in the Manono Project, and its ability to ultimately hold a majority interest (of at least 51%, and as much as 66%) in Dathcom and the Manono Project, which is its flagship project;
- AVZ had information about the Dathomir Claim and Cominière Transfer Claim prior to the 4 May 2022 announcement and it:
- failed to disclose this information to the market in breach of its continuous disclosure obligations under s674A of the Corporations Act 2001 (Corporations Act); and
- failed to adequately disclose the information when making positive statements about its ownership or ownership rights in respect of the Manono Project and accordingly engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, or was false or misleading, in contravention of statutory provisions including s1014H of the Corporations Act, s12DA of the Australian Securities and Investments Commission Act 2001and/or s18 of the Australian Consumer Law;
- Prior to 4 May 2022 the price for AVZ shares was inflated by virtue of the non-disclosure of information related to the Dathomir Claim and Cominière Transfer Claim, and would have been lower had such information been disclosed to the market;
- As a result, shareholders who acquired shares, or an interest in shares, in AVZ in the period between 17 May 2021 and 6 May 2022 inclusive (Relevant Period) have suffered loss or damage.
The Relevant Period may change prior to the commencement of the Class Action.
AVZ shareholders who acquired AVZ shares or an interest in AVZ shares between 17 May 2021 and 6 May 2022 (inclusive) are encouraged to sign up with Omni Bridgeway below.
How much will it cost to take part in the class action?
There are no costs involved for group members who wish to take part in the class action. In the event that the class action is unsuccessful, group members do not have to pay anything because Omni Bridgeway will pay any legal costs that may be awarded to AVZ. In the event of a successful outcome, Omni Bridgeway will be entitled to reimbursement of the costs of the class action that it has paid plus a commission from the judgment or settlement amount, pursuant to the terms of the funding agreement.
How can affected AVZ Minerals shareholders participate in the class action?
It is currently proposed to bring the Class Action on an ‘open’ basis, that is, on behalf of all AVZ shareholders who acquired AVZ shares or an interest in AVZ shares between 17 May 2021 and 6 May 2022 (inclusive) whether or not they sign up to the funding agreement. If you do not wish to take part in the Class Action, you will need to opt out in accordance with the relevant court rules.
Omni Bridgeway encourages all group members who do not wish to opt out to sign up so that Omni Bridgeway can include you as ‘known’ funded group members and ensure you receive regular updates regarding the Class Action and, most importantly, so that any distribution from the proceeds of the Class Action to which you may be entitled is properly paid to you.
To sign up, you can do so by clicking on the “Sign up” button below. Alternatively, you can contact the Omni Bridgeway Client Liaison Team in our Perth office by email on
avzminerals@omnibridgeway.com or by calling 1800 016 464 (free call in Australia) or +61 8 9225 2322 (if overseas).
Please return your completed and signed Funding Agreement and Retainer by no later than 31 March 2023.
CLICK HERE TO SIGN UP
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