One of the best performers on the market on Friday has been the AVZ Minerals Ltd (ASX: AVZ) share price.
In morning trade the lithium-focused mineral exploration company’s shares are 6.5% higher at 8.2 cents.
Why are AVZ Minerals’ shares storming higher?
This morning the company released an update on the mineral resource at its 60%-owned Manono Lithium Project in the Democratic Republic of Congo.
According to the release, the company has reported a 54.1% increase in the JORC Ore Resource estimate for the project.
In addition to this, AVZ Minerals has more than doubled the Measured Resource category to over 93Mt following infill drilling since August 2018.
Management advised that this greatly increases confidence levels in the central section of the Roche Dure orebody and that the overall increase in the total resources is more than ample to support the ongoing internal scoping studies for a potential 5Mtpa operation.
But it isn’t just lithium that the company is looking at pulling out of the ground. Management also advised of a significant increase in the global tin content to 300,000 tonnes and the tantalum content to over 13,200 tonnes.
It expects this “to provide a significant offset in the operating costs for the planned processing plant.”
This confirms Manono as the world’s largest lithium deposit even though further drill results are still pending. Overall, management said it is “confident that the Manono Project will continue to grow and potentially become a world leading source of lithium.”
Should you invest?
While AVZ Minerals is clearly sitting on a monster deposit that dwarves those owned and operated by Galaxy Resources Limited (ASX: GXY) and Orocobre Limited (ASX: ORE), there are still a lot of questions over whether it will be a profitable operation or even commissioned.
Because of this, I think investors would be better getting their exposure to lithium elsewhere in the market. Though it is worth remembering that lithium shares are extremely volatile and prone to wild swings.
Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.