In one of the most volatile days for mining stocks, lithium explorer AVZ had over 150 million dollars’ worth of stock traded today.
At the beginning of the day, AVZ shares were 19% higher to $1.18, but by the end of the day the share price tumbled down over 19% to 80 cents.
The AVZ share price initially rocketed higher this morning after the company revealed that the Minister of Mines has awarded a mining licence to AVZ’s 75%-owned Dathcom Mining SA business for the flagship Manono Lithium and Tin Project.
The mining licence will cover the entirety of the Roche Dure mineral resource and the Carriere de l’Este exploration target. All in all, the company can now advance its previously initiated early works program ahead of a final investment decision to commence major works and first production toward the later months of 2023.
The weakness in the AVZ share price is likely to do with ownership claims on the project joint venture. Under the terms, La Congolaise D’Exploitation Miniere SA (Cominiere), which owns the other 25% of the Dathcom business, will let go of 10% of its interest to the DRC Government.
AVZ now wants to acquire the remaining 15% of the interest in Dathcom, which it believes it has the rights to. However, Cominiere has decided to transfer this interest to Jin Cheng Mining Company out of the blue.
AVZ intends to fight the claim, but it is difficult to tell whether this will be successful. The primary concern being that the Democratic Republic of the Congo is one of the most corrupt countries in the world according to Transparency International.
The company stated:
“The Company has considered each of the Dathomir Claim and Cominiere Transfer Claim in detail and believes them to each be spurious in nature, without merit, contain fundamental and material errors, and have no substance or foundation in fact or law. The Company is continuing to take all necessary actions to resist these vexatious and meritless claims and to protect Dathcom’s and its interests, and the Company will consider all options including engaging with the DRC Government and seeking international law remedies.”