The AVZ Minerals Ltd (ASX: AVZ) share price has been a very strong performer on Thursday.
At one stage today the lithium-focused mineral exploration company's shares were up as much as 27% to a 52-week high of 12.5 cents.
The AVZ Minerals share price has given back some of these gains but is still up 17% to 11.5 cents at the time of writing.
Image source: Getty Images
Why is the AVZ Minerals share price rocketing higher?
Investors have been buying the company's shares today after the release of a very positive announcement.
According to the release, the company has secured a strategic, long-term offtake partner with GFL International Co. It is the subsidiary of China's largest lithium compounds producer, Ganfeng Lithium.
The release explains that the two parties have signed an offtake agreement for spodumene concentrate (SC6) that will see Ganfeng Lithium purchase 160,000 metric tonnes per annum from its Manono Lithium and Tin Project.
The initial term is for five years but has an option to be extended for a further five years.
AVZ's Managing Director, Nigel Ferguson, commented:
"We are very pleased to finalise these discussions with GFL and to sign our first lithium offtake agreement. The fact we have signed our first offtake agreement with China's largest lithium compound producer just reinforces our belief that the Manono Project is world-class."
"GFL has signed on to take 30% of the Manono Project's initialsaleable SC6 yearly tonnage, which is a massive endorsement for our project. Over the coming months, I look forward to finalising other offtake agreements which are currently under negotiation, not only for our lithium products but also for our tin and tantalum materials."
"This SC6 offtake agreement with GFL will also greatly assist the Company in meeting any conditions precedent that are required for our prospective financiers. I look forward to updating our shareholders and the market with respect to the Company's financing options for the Manono Project early in the New Year."
