AVZ Minerals Limited (AVZ) is pleased to announce that it has entered into a pre-
completion funding agreement (Pre-Completion Funding Agreement), a revised
transaction implementation agreement (TIA) and a relationship deed with Suzhou CATH
Energy Technologies (CATH) (together the Restructured JV Arrangement).1
The Restructured JV Arrangement is a continuation of the strong relationship and
partnership between AVZ and CATH, with both parties committed to the development
of the Manono Lithium and Tin Project (Manono Project). The Manono Project has the
potential to become a leading global producer of lithium products.
Under the terms of the Restructured JV Arrangement:
– CATH will provide AVZ with a facility of US$20m to be drawn over the coming
twelve months or so, to finance AVZ’s certain expenditures and also for
working capital and general corporate purposes;
– CATH will pay AVZ US$259.25m to acquire a 30.5% indirect interest in the
Manono Project, through the acquisition of shares in Green Lithium Holding
Lte. Ltd (GLH) (a wholly owned subsidiary of AVZ International Pty Ltd (AVZI)
and the holder of legal title to AVZ’s interest in Dathcom Mining SA (Dathcom)),
on satisfaction of certain conditions precedent, including grant of a mining
licence for the project area covered by PR 13359 (Mining Licence) to Dathcom;
– AVZ and CATH will enter a multi-faceted joint venture to develop the Manono
Project;
– Subject to certain conditions, CATH may contribute all project development
costs to the Phase I Manono Project joint venture pursuant to a capital
expenditure funding agreement to be agreed between CATH and GLH;
– Until the later of 5 years and repayment of any CATH funding of AVZ project
development costs, CATH will be entitled to purchase up to 100% of the
uncommitted offtake produced and thereafter a reduced rate equal to its and
each non-AVZ JV participant’s economic interest in the Manono Project;
– AVZ and CATH have entered a relationship deed under which, among other
things, CATH undertakes to reasonably support AVZ under certain
circumstances;2 and
– As a consequence of the revised JV and funding arrangements, AVZ no longer
needs to draw upon the Locke litigation funding facility.
