Why are AVZ shares staying suspended?
The post AVZ share price suspension: What is the Manono Lithium Project they are fighting over? appeared first on The Motley Fool Australia. –
The AVZ Minerals Ltd (ASX: AVZ) share price is currently suspended and is expected to stay that way for at least the remainder of the month.
This is due to the lithium developer battling legal proceedings relating to the ownership of the Manono Lithium and Tin Project in the Democratic Republic of the Congo.
Last month China’s Jin Cheng Mining Company launched arbitration proceedings in the International Chamber of Commerce in Paris. It is seeking to be recognised as a shareholder of Dathcom Mining, which is the owner of the Manono project.
The worst-case scenario could see AVZ’s shareholding in the project reduced from a majority 75% ownership today to just a minority 36% ownership. This includes the proposed sale of a 24% stake to Suzhou CATH Energy Technologies.
What are they all fighting over?
The Manono Project is located 500km north of Lubumbashi in the south of the Democratic Republic of Congo.
It is home to the world class Roche Dure Mineral Resource, which is one of the largest undeveloped hard rock lithium deposits in the world.
The company highlights that the Manono Project is strategically positioned as a clean, sustainable source of lithium, significantly contributing to the green energy transition and feeding the global lithium-ion battery value chain.
Initial production is expected to be 700,000 tonnes per annum of lithium spodumene concentrate with 6% lithium oxide content (SC6) and 46,000 tonnes per annum of primary lithium sulphate.
It also comes with industry-leading ESG credentials and is forecast to be one of the lowest carbon emitting hard rock mines in the world.
When will the AVZ share price return?
At present, the AVZ share price will remain suspended until the end of the month.
However, the reality is that it could come back sooner or later than this date. Given the impact that the loss of a significant share of the project could have on the company’s valuation, it is unlikely to return to trade while this dark cloud hangs over it.
So, investors may need to be patient and wait for this to be resolved before they see their AVZ shares trading again. Fingers crossed for a positive outcome.
The post AVZ share price suspension: What is the Manono Lithium Project they are fighting over? appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.