viewAVZ Minerals Ltd

AVZ Minerals enters second phase of lithium feasibility study work at Manono project in DRC


The company is at definitive feasibility study stage and is entering a second confirmatory testing phase to look at optimising recoveries.

AVZ Minerals Ltd - Avz Minerals enters second phase during Manono-DRC lithium feasibility study work

Quick facts: AVZ Minerals Ltd

Price: 0.086 AUD

Market: ASX
Market Cap: $244.97 m
  • The company’s flagship Manono Lithium-Tin Project is a monster-sized undeveloped lithium resource. 

  • A definitive feasibility study for the project is in progress. 

  • The company is targeting producing the study in the March quarter of 2020. 

  • Current DFS work is focused on optimising recoveries. 

There is an opportunity to improve DMS250 performance by optimising test parameters in the phase-two confirmatory program based on equipment performance.

There will be an opportunity to recover a tin-rich stream from the lithia concentrate stream with simple gravity separation techniques employed. Additional lithia recovery optimisation may be gained through an opportunity to feed a coarser product to the HPGR or pre-screening prior to crushing by HPGR.

We have not investigated, as yet, any further downstream treatment to increase purity of grade such as optical sorting, magnetic separation or other methodologies.

AVZ Minerals managing director Nigel Ferguson

What does AVZ Minerals do?

AVZ Minerals Ltd (ASX:AVZ) (FRA:3A2) (OTCMKTS:AZZVF) is a Western Australian-based developer with a flagship battery metals project in the Democratic Republic of the Congo (DRC).

The company is fast-tracking the partly-owned lithium-tin project through to a definitive feasibility study (DFS). Study work is currently focused on confirmatory testing and optimising recoveries.

Future work could look at how grade purities could be improved using various methods.

Who leads AVZ Minerals?

The company is led by managing director Nigel Ferguson, a geologist with 32 years’ industry experience.

Ferguson has held senior management roles for the past 20 years and is a director of Okapi Resources Ltd (ASX:OKR) and AJN Resources Corp.

The corporate leader has been active in the DRC since 2004, working on gold and base metals exploration projects and resource development.

What does AVZ Minerals own?

The key asset is the 188 square kilometre Manono Lithium-Tin Project in southern DRC which AVZ bought into in 2017 for $6.57 million in a cash a scrip deal.

AVZ holds 60% while the State-owned enterprise Cominiere (La Congolaise d’Exploitation Minière SA) has 30% and the original seller, private company Dathomir Mining Resources SARL, continues to hold 10%.

Project lead AVZ agreed to take an extra 5% stake in the project from Dathomir earlier this year, committing to spend a further US$5.5 million at the site to take its share to 65% and reduce Dathomir’s to 5%.

The deal upped the net present value (NPV) of its allowable stake by $130 million to about $1.68 billion, based on scoping study values.

Manono features a 269 million tonnes resource, with the scoping study judging it can produce 5 million tonnes a year.

The $300 million to $400 million project is 500 kilometres, or 1.5 hours by plane or road, from the second-largest city in the DRC, Lubumbashi, which lays south of the project site.

Infrastructure near the project is limited but part-owner Dathomir previously committed to facilitating the rehabilitation of a hydroelectric power station at Piana Mwanga and the road from Manono to the mining capital of Lubumbashi.

The road upgrade has been costed as about US$285 million and is considered in progress.

Manono area features good water supply which is considered enough for both mining and the local community.

The project is viewed as the world’s largest undrilled lithium resource and one of the highest grading hard rock lithium projects.

Manono project has a 13-kilometre strike length through an area that hosted a tin mine last century.

The Manono tin mine was worked over between 1919 and 1982, with 1 million cubic metres of ore being processed at the site to produce 185,000 tonnes of cassiterite concentrate.

Manono mine’s ore was mostly sourced from eluvial and weathered pegmatite recovered at an average of 1,850 grams of cassiterite concentrate per cubic metre or 1,330 grams of cubic metre tin.

What is AVZ Minerals looking at in its study work?

A definitive feasibility study for Manono project is assessing an option to produce 1.1 million tonnes a year of 5.8% concentrate for 20 years, including tin credits.

Operating costs for production have previously been put at $323 a tonne. The costing does not factor in the risks associated with transporting spodumene concentrate output a 2,050-kilometre distance to Tanzania for export or the road upgrade costs of third parties.

AVZ completed phase one of a metallurgical test work program at the project earlier this month. This phase involved characterisation and recovery of lithia, conventional laboratory heavy liquid separation (HLS), and laboratory-scale and industrial-scale dense medium separation (DMS).

The test work confirmed finer crush material from the site could be used to produce better lithia grades and recoveries.

Scale-up tests using an industrial-size DMS pilot plant increased confidence in the company’s laboratory-scale equipment and procedures.

The company is factoring in dewatering of a pit at Roche Dure pegmatite as part of its DFS and is seeking geotechnical and hydrogeological expertise to contribute know-how.

AVZ’s Roche Dure mineral resource was 400 million tonnes grading 1.65% lithium, 715ppm and 34ppm tantalum in May 2019. This included 269 million tonnes of measured and indicated resources at 1.65% lithium.

The Roche Dure deposit has JORC compliant tin and tantalum resources of 275 metres grading 962ppm tin and 38ppm tantalum for 264,55 tonnes of tin metal and 10,450 tonnes of tantalum metal.

Besides Roche Dure, Manono also features the Carriere de l’Este, Mpete and Tempete pegmatites, with the company’s exploration target for the project being 1 to 1.2 billion tonnes of 1.25% to 1.5% lithium.

A target for Roche Dure was between 300 and 400 million tonnes grading 1.25-1.5% lithium.

AVZ will continue with confirmatory testing and other processes as it targets a March 2020 quarter release date for its DFS.

Inflection points

  • Confirmatory testing results seen during definitive feasibility study production
  • Progress on infrastructure improvements and other commitments in the DRC
  • Upped stakes in project and contribution to company valuation
  • Lithium and critical mineral sentiments globally and in Western nations
  • Increased demand for lithium with maturation of electric vehicle markets
  • Changing supply chains given reduced supply from mainland China

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