The AVZ Minerals Ltd (ASX: AVZ) share price rocketed out of the gates this morning.
In early trade, the lithium explorer's shares were up 19% to $1.18.
The AVZ Minerals share price has since pulled back but remains up 6.5% to $1.06.
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Why did the AVZ share price rocket higher?
Investors were bidding the AVZ share price higher this morning after the lithium explorer provided an update on the Manono Lithium and Tin Project in the Democratic Republic of the Congo.
According to the release, the Minister of Mines has awarded a mining licence to AVZ's 75% owned Dathcom Mining SA business for the flagship Manono Project.
The mining licence will cover the entirety of the Roche Dure mineral resource (401 million tonnes at Li20 1.65%) and the Carriere de l'Este exploration target. It does, however, exclude a portion of the land holding to the north. AVZ intends to have discussions with the government in the near future regarding this land.
The company is now advancing its early works program ahead of a final investment decision to commence major works and first production toward the later months of 2023.
"A watershed moment"
AVZ's Managing Director, Nigel Ferguson, was pleased with the news. He said:
"The receipt of the Ministerial Decree to award the Mining Licence is leading to a watershed moment for AVZ and our partners, with the official award of the Mining Licence from CAMI expected in a matter of days.
This paves the way for AVZ to start developing what is arguably one of the most important new mining projects in the world that will significantly contribute to the global green energy transition, while also uplifting the lives of the Congolese people who will contribute and receive sustained benefits from the Project for many decades to come."
Legal wrangle
Taking some of the shine off the update was news that AVZ has been caught up in a legal wrangle.
This is in respect to a claim that La Congolaise D'Exploitation Miniere SA has transferred a 15% interest in Dathcom to Jin Cheng Mining Company.
It commented:
"In relation to the Cominiere Transfer Claim, the Company notes any such purported transfer would be restricted under the terms of the existing shareholders agreement between the Dathcom shareholders and accordingly, any purported transfer of the 15% interest to a third party would be a material breach of the pre-emptive rights contained in the existing Shareholders Agreement owed to AVZI, invalid and of no force or effect.
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."
