AVZ Minerals Ltd. intends to raise A$15 million, with strategic investor Huayou International Mining (Hong Kong) Ltd. agreeing to invest A$13.0 million in the company, according to an Aug. 10 news release.
The funds will mainly be used for drilling and initial metallurgical test-work programs at the Manono lithium project in the Democratic Republic of the Congo and for ongoing corporate and administration costs.
The company is also planning a significant diamond and reverse circulation drilling program starting late in the third quarter or early in the fourth quarter to define mineral resources to a JORC 2012 standard by early 2018.
Huayou will secure an 11% interest in the company against the investment by acquiring 186 million shares at 7 Australian cents per share, with 186 million attaching options exercisable at 10 cents apiece, expiring 20 months after the issue.
Huayou, a wholly owned unit of Shanghai-listed nonferrous metals smelter Zhejiang Huayou Cobalt Co. Ltd, will also have the right to appoint a nominee to AVZ's board.
AVZ intends to raise A$2.0 million from institutional and sophisticated investors by issuing up to 28,285,714 shares at 7 cents apiece, with an option attached to each share.
Hartleys Ltd. will act as lead manager.