AVZ Minerals Ltd (ASX:AVZ) is in negotiations with Yibin Tianyi Lithium Industry Co Ltd on a binding offtake arrangement following a visit last week by senior management to Yibin Tianyi’s lithium chemical plant in Yibin, China.
These partnership discussions come hot on the heels of AVZ shareholders approving a $14.1 million share placement to the Chinese company at a general meeting held on January 3, 2020.
Under a subscription agreement and upon completion of the placement, both parties will negotiate in good faith with the aim of agreeing and executing a binding offtake agreement for lithium products from the Manono Lithium and Tin Project in the DRC.
“Excited with the progress”
AVZ managing director Nigel Ferguson said: “We are excited with the progress of welcoming Yibin Tianyi as AVZ’s strategic partner following shareholder’s approval.
“The conditions precedent are progressing well and we expect all matters to be satisfied, including regulatory approvals by the end of the month.
“We are well received by Pei Zhen Hua, Yibin Tianyi’s chairman and his management team in China last week and we thank them for their hospitality.
“We look forward to completing this placement and also settling a binding offtake arrangement.
“Yibin Tianyi’s intention to become one of the largest hydroxide suppliers in China certainly compliments AVZ’s vision of developing the largest hard rock lithium deposit in the world.”
AVZ managing director Nigel Ferguson, International Business of Suzhou TA&A Ultra Clean Technology Co Ltd director Tay CS and project director Michael Hughes at Yibin Tianyi’s lithium chemical plant.
AVZ’s visit to China was led by managing director Nigel Ferguson and project director Michael Hughes and included a visit to Yibin Tianyi’s lithium chemical plant, which is under construction and anticipated to begin production by June 2020.
Yibin Tianyi’s lithium chemical plant is targeting production of up to 25,000 tonnes of lithium hydroxide per annum.
Staged expansion plans are in place to further increase lithium hydroxide production to about 100,000 tonnes per annum, making Yibin Tianyi’s plant one of the largest hydroxide suppliers in China.