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Corporate Spotlight

AVZ Minerals Limited (AVZ) is a mineral exploration company focused on developing the Manono Project, potentially one of the world's largest lithium-rich LCT (lithium, caesium, tantalum) pegmatite deposits. AVZ's objective is to leverage its financial and project development expertise to advance the
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Bullish on expectations for DRC lithium project

TRANSPORT UPDATE

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AVZ Transport Update - Material Cost Savings

ASX Announcement 7 November 2018

HIGHLIGHTS 

  • AVZ’s technical team have reviewed several methods of transhipment of concentrate from the Manono Lithium Project and have identified significant savings that will reduce overall transport costs for the project 
  • The 2Mtpa Scoping Study is now being re-run to including these savings to produce updated financials for the Project 
  • The 5Mtpa and 10Mtpa Scoping studies will also include these updated financials and remain on track for reporting.

AVZ Minerals Limited (ASX:AVZ) “AVZ” or “the Company” is pleased to advise that further detailed review of the methodology adopted for the Scoping Study (released 9 October, 2018) has revealed significant savings which allow for a more cost effective transport of the concentrate from the Manono Lithium project to port without applying any further discount that could be negotiated for volume carried with providers moving forward.v

As per the results from the Scoping Study announcement dated 9 October 2018, the transport cost of the preferred route represents the largest operating cost for the Project. With this in mind, AVZ’s technical team have been reviewing methods of transporting concentrate from Manono to Dar es Salaam, Tanzania and have identified that significant cost savings are to be gained by utilising 2 tonne “bulka bags’ instead of the nominated half height 20’ containers.

The initial proposed transportation option, adopted closed, half height 20’ containers with a capacity of approximately 30t. These containers would be truck loaded at site and then transferred to the port town of Moba on the west coast of Lake Tanganyika. These containers would then be loaded on to a custom-made barge, sailed to the Tanzanian port of Kigoma and then offloaded directly to flat top rolling stock for railing to Dar es Salaam.

As part of our continual optimisation strategy, the proposed method of packaging and moving the concentrate has been reviewed and the option to utilise 2 tonne “bulka bags” instead of closed containers proved positive in reducing costs. This enabled maximisation of available transport methods to port with positive results.

Based on the 2 Mtpa scoping study (released on 9 October 2018) and ongoing work to date, AVZ believes transport and processing costs have the potential to be further improved (reduced) as current work and negotiations are completed.

Additional discussions will also be held with DRC regional Government and the Tanzanian authorities and are being planned for within a site visit in the coming weeks. Presently the 2Mtpa Scoping Study is to be re-run and results will be announced to the market as soon as completed.

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QUARTERLY

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Quarterly Activities Report for the period ended 30 September 2018

ASX Announcement 31 October 2018

Highlights 

  • Manono Scoping Study confirms potential for a world-class, high margin, long life mining project 
  • AVZ intends to proceed to a Definitive Feasibility Study (DFS) to be completed in Q2 2019, which will consider the potential for tin byproduct credits 
  • Maiden Mineral Resource estimate of 259.9Mt grading 1.63% Li2O (spodumene), confirming Manono’s potential to become a world leader in the global lithium market 
  • AVZ received further high-grade lithium results from a resource drilling program at the Manono Lithium Project in Democratic Republic of Congo which were not included in the Company’s maiden Mineral Resource announced in August 2018 
  • Updated Mineral Resource Estimate for Manono expected to be complete by the end of 2018 
  • Scoping Study for 5Mtpa and 10Mtpa scenarios progressing

Corporate 

  • Graeme Johnston appointed as Technical Director.

AVZ Minerals Ltd (ASX: AVZ) is pleased to provide the following report on its activities for the quarter ended 30 September 2018.

MANONO LITHIUM PROJECT, DRC

Scoping Study

Subsequent to quarter end, AVZ released results from its Manono Lithium Project Scoping Study undertaken by CPC Project Design Pty Ltd (CPC) in conjunction with Alan Dickson & Associates (ADA).

Highlights of the study included:

  • Case 1 of 2 Million tonnes per annum (Mtpa) pre-tax, pre-royalties NPV10 of approximately US$1.6 Billion (Bn) (AVZ’s 60% share is approximately US$0.93Bn) with an estimated IRR greater than 90%. 
  • Scope for annual production of approximately 440,000 tonnes per annum (tpa) at a minimum of 5.8% Li2O concentrate from Case 1 throughput of 2Mtpa of pegmatite ore with low strip ratio of 0.7:1. 
  • F.O.B. Operating costs to Dar-es-Salaam estimated at approximately US$355 per tonne (t) of concentrate. 
  • Metallurgical test work indicates recoveries in excess of 80% are achievable. 
  • Capex estimated for Case 1 throughput at approximately US$150 to $160 Million (accurate to ±35% and includes US$36M contingency). 
  • Study for Case 2 for 5Mtpa and Case 3 for 10Mtpa in progress and will be completed as soon as practicable.

The Study confirmed Manono as the largest undeveloped hard rock lithium project globally in terms of grade, mine life and expandability and demonstrated its potential for excellent economic outcomes. AVZ expects that the project economics can be further improved, especially regarding transport, processing, power costs and recovery of tin as a by-product.

The Scoping Study did not analyse the potential for tin by-product credits once metallurgical test work is completed, however it is expected that these credits will be included in a Definitive Feasibility Study, which AVZ intends to commence immediately.

More detail on the Scoping Study can be found in the ASX Announcement dated 9 October 2018.

Click here to view the full announcement 

RECORD LITHIUM

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AVZ Continues to Drill Record Lithium Intercept 5 Mtpa & 10 Mtpa Scoping Studies Commence

ASX Announcement 19 October 2018

Highlights 

  • MO18DD032 intersected 262.02m* @ 1.74% Li2O & 698ppm Sn from 105.03m down-hole on drill section 7200mN 
  • MO18DD036 previously reported 236.47m* @ 1.70% Li2O & 422ppm Sn from 154.0m down-hole on drill section 7400mN. No deeper significant lithium intersections were drilled in the deepened portion of the hole 
  • MO18DD050 intersected 350.95m* @ 1.44% Li2O & 376ppm Sn from 146.3m down-hole on drill section 7400mN 
  • MO18DD052 intersected 157.31m* @ 1.76% Li2O & 1175ppm Sn from 99.13m down-hole between drill section 7500mN and 7600mN 
  • MO18DD054 intersected 205.04m* @ 1.63% Li2O & 1173ppm Sn from 35.2m down-hole on drill section 7000mN 
  • Scoping studies for 5 million tonnes per annum (Mtpa) and 10Mtpa underway. We expect the project economics to be improved further for both studies, especially in the areas of transport, processing, lowering strip ratio and increase of mine life. 
  • Positive roadshow in the USA, Canada, Hong Kong and China post release of the 2Mtpa Scoping Study and Operations update. AVZ has since been presented with a number of financing options including, but not limited to, equity investment, off-take pre-payments, project debt as well as other variations and combinations of these instruments. 
  • Roche Dure mineralisation continues to increase and we look forward to releasing an updated Mineral Resource Estimate for Manono before the end of the year.

*Down-hole length. Additional drilling is required to confirm the true-thickness of the pegmatites.

AVZ’s Managing Director, Mr Nigel Ferguson commented: “Continued drilling at Roche Dure is increasing our knowledge of the deposit along strike, both to the south-west and north-east of the central part of the main resource area. With these new results, we will very likely see an increase in resource tonnages and category at Roche Dure given they were drilled outside the maiden resource 'area of influence'. We expect this to lower the strip ratio over LOM and positively impact the project economics.

We are very happy that the scale of the Roche Dure mineralisation continues to increase, and we look forward to releasing an updated Mineral Resource Estimate for Manono before the end of the year.

Following on from our recent funding discussions, we are very encouraged by the amount of interest in the company post the release of the 2 Mtpa Scoping Study and stated interest to participate in accelerating the development of the project as quickly as possible. The Tier-1 nature of the project was easily understood and very well received given the quality, size and homogenous nature of the lithium and tin resource.”

AVZ Minerals Limited (ASX: AVZ) is pleased to report it has received further high-grade results from its Mineral Resource drilling at the Manono Lithium Project in the Democratic Republic of Congo. It has received results from a further eight diamond drill holes, none of which were included in the Maiden JORC Mineral Resource estimate reported in early August 2018.

Scoping Studies Update 

Work has commenced on the now 5Mtpa (previously 4Mtpa) & 10Mtpa scoping studies for the Manono Lithium Project. We have increased the scale of the 4Mtpa study to 5Mtpa as we are now studying the use of 5Mtpa modules given the expected economies of scale from this strategy and the size and potential of the world-class resource available to us at Manono.

Strategic Funding 

As part of the Company’s ongoing strategy to secure financing for the development of the Manono lithium project, Executive level meetings have been held in the USA, Canada, China & Hong Kong over the past month. AVZ has since been presented with a number of financing options including, but not limited to, equity investment, off-take pre-payments, project debt as well as other variations and combinations of these instruments.

AVZ is considering these financing options along with other strategies, to determine the best outcome for the Company and shareholders.

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ROCHE DURE

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AVZ prepares for Manono Mineral Resource Update with more high-grade results from Roche Dure

ASX Announcement 19 September 2018

Highlights 

  • AVZ’s extensional drilling at Roche Dure identifies additional high-grade lithium and tin mineralisation, pointing to further resource growth on the Company’s maiden Mineral Resource announced in early August 2018. 
  • MO18DD044 intersected 273.45m* @ 1.73% Li2O & 953ppm Sn from 50.55m down-hole on drill section 7100mN 
  • MO18DD043 intersected 259.3m* @ 1.76% Li2O & 1015ppm Sn from 41.00m down-hole, approximately 25m south of drill section 7200mN 

* Down-hole length. Additional drilling is required to confirm the true thickness of the pegmatites.

AVZ’s Managing Director Mr Nigel Ferguson commented: “Continued drilling at Roche Dure is increasing our knowledge of the deposit along strike, both to the south-west and north-east of the central part of the main resource area. With these new results, we will very likely see an increase in resource tonnages and category at Roche Dure given they were drilled outside the maiden resource 'area of influence'. The assays reported again show excellent lithium mineralisation. 

We are very happy that the scale of the Roche Dure mineralisation continues to increase and the grade remains consistent with intersections from the earlier drilling. We look forward to releasing an updated Mineral Resource Estimate for Manono before the end of the year.” 

AVZ Minerals Limited (ASX: AVZ) is pleased to report it has received further highgrade results from its Mineral Resource drilling at the Manono Lithium Project in the Democratic Republic of Congo. It has received results from a further eight diamond drill holes, none of which were not included in the Maiden JORC Mineral Resource estimate reported in early August 2018. 

Drilling progress 

Results from the latest eight holes have intersected broad intervals of mineralisation, with the intersections of individual pegmatite bodies up to 259.30m (down-hole length; true thickness not yet known) in MO18DD043. Hole MO18DD045 seems to show down-faulting in the deeper part of the orebody that is not yet fully understood and which will require further drilling for interpretation. The Roche Dure orebody continues to grow steadily in size.

The grades of some of the pegmatite intervals in the new infill holes show zones of lower lithium grade but drilling also continues to demonstrate substantial thicknesses of higher-grade material ranging in depth from just under the weathered zones to deeper in the deposit. Again, there appears to be no zonation in the pegmatite intersected by these eight new holes. Figures 2 to 7 show these intervals schematically. 

AVZ’s infill drilling is expected to be completed late in November, with an update to the Mineral Resource Estimate for Manono due before the end of the year.

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CONTINUES TO DRILL

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AVZ Continues to Drill Thick High Grade Lithium Intercepts

ASX Announcement 5 September 2018

Highlights 

  • Separately, the maximum lithium intercept achieved was 336.81m. the highest grade of Li2O encountered was 5.60% and the highest grade of tin recorded was 7,790ppm 
  • MO18DD035 intersected 286.75m* @ 1.74% Li2O & 822ppm Sn from 54.55m down-hole on drill section 7200mN (including 4.8m of core loss) 
  • MO18DD036 intersected 236.47m* @ 1.70% Li2O & 422ppm Sn from 154.00m down-hole on drill section 7400mN (including 2.65m of internal waste) 
  • MO18DD037 intersected 325.17m* @ 1.33% Li2O & 596ppm Sn from 78.14m down-hole between drill section 7400mN and 7500mN (including 3.72m of internal waste) 
  • MO18DD038 intersected 257.45m* @ 1.46% Li2O & 461ppm Sn from 137.55m down-hole on drill section 7300mN 
  • MO18DD039 intersected 183.11m* @ 1.44% Li2O & 629ppm Sn from 154.95m down-hole on drill section 6800mN 
  • MO18DD040 intersected 287.95m* @ 1.42% Li2O & 219ppm Sn from 183.82m down-hole on drill section 7300mN 
  • MO18DD041 intersected 336.81m* @ 1.31% Li2O & 551ppm Sn from 88.30m down-hole between drill section 7400mN and 7500mN (including 2.76m of internal waste) 
  • MO18DD036 has been deepened from 407.03m to 532m confirming the presence of more pegmatite but assays for the depth extension are still pending

* Down-hole length. Additional drilling is required to confirm the true-thickness of the pegmatites.


AVZ’s Managing Director Mr Nigel Ferguson commented: “Drilling is continuing as planned at Roche Dure. Some of these new results are located within the area recently modelled for the Maiden Mineral Resource estimate, as well as from step out drilling along the strike of the pegmatite and outside the mineral resource area. The assay results noted here continue to confirm lithium and tin mineralisation in the modelled zone, demonstrating the homogenous nature of the pegmatite. Additionally, new results from unmodeled areas have also intersected mineralisation, adding to the scale of the Roche Dure mineralisation. These results will be captured in the next mineral resource calculation.”

AVZ Minerals Limited (ASX: AVZ) is pleased to provide an update on its Mineral Resource drilling of the Manono Lithium Project in the Democratic Republic of Congo. The Company has recently received new drilling results, resulting in this public announcement reporting the results from 7 drill-holes. These new drilling results were not included in the maiden JORC Mineral Resource estimate reported in early August 2018.

Drilling progress 

The new drilling results reported here are from a combination of infill holes within the area recently reported as the maiden Mineral Resource, as well as from new holes drilled towards the edge of this area. Recent assays from the 7 newly validated cored drill holes reported include data from drill holes MO18DD035 to MO18DD041, excluding the recently deepened hole MO18DD036, which confirmed the presence of additional mineralised pegmatite, but for which assay results are still pending.

All these new holes have intersected broad intervals of mineralisation, with the intersections of individual pegmatite bodies up to 336.81m (down-hole length; true thickness not yet known) in MO18DD041. Hole MO18DD036 has been deepened after later drilling intersected what looked like a possibly deeper part of the lower Roche Dure pegmatite on adjoining sections. Assays for this hole are only reported to a depth of 392.47m with the depth extension results for the deeper pegmatitic mass still pending and to be reported on later. Hole MO18DD041 on the section north of hole MO18DD036 intersected a total of 336.81m of pegmatite confirming the presence of this lower, thicker part of the pegmatite in this area.

The grades of the pegmatite intervals in the new infill holes within the modelled area still demonstrate strong spodumene mineralisation such as that in hole MO18DD035 on section 7200mN which has intersected 286.75m of pegmatite (down-hole length; true thickness not yet known) with a robust average grade of 1.74% Li2O. Figures 2 to 6 show these intervals schematically.

Drilling continues with four rigs on site and a total of some 20,880m completed to date. It is expected that a further amount of drilling, approximately 8,000m will be completed prior to year end, including geotechnical and metallurgical drilling and to allow further resource calculations to be undertaken.

Further assay results will be released to the market as they become available.

Click here to view the full announcement

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