Why is the AVZ share price halted today?

AVZ shares are halted on Monday. Here's why…

| More on:
A person holds a stop sign in front of their head

Images source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AVZ Minerals Ltd (ASX: AVZ) share price won't be going anywhere on Monday.

This morning the lithium developer requested a trading halt prior to the market open.

Why is the AVZ share price halted?

This morning the AVZ share price was placed in a trading halt until the earlier of Wednesday or the release of an announcement. The company's request states:

AVZ Minerals Limited requests that a trading halt be placed on the Company's securities effective immediately, pending the release of an announcement in relation to it's (sic) mining and exploration rights for the Manono Lithium and Tin Project.

What does this mean?

Judging by the request, it appears as though AVZ intends to address concerns about its ownership of the Manono Lithium and Tin Project in the Democratic Republic of the Congo.

Last week, the company announced that its 75%-owned Dathcom Mining SA business has received a mining licence for the Manono Lithium and Tin Project. The remaining 25% of Dathcom is currently owned by La Congolaise D'Exploitation Miniere SA (Cominiere).

Following the granting of the mining licence, Cominiere will cede 10% of its interest to the Democratic Republic of the Congo Government, with AVZ believing it has the rights to acquire the other 15%.

However, Cominiere has decided to transfer this 15% interest to China's Jin Cheng Mining Company, preventing AVZ from acquiring the stake. AVZ doesn't believe this is lawful and intends to fight the claim.

In addition, AVZ has previously signed away a 24% stake in Dathcom to Suzhou CATH Energy Technologies in exchange for a US$240 million investment to develop the Manono Project. This deal has not been finalised and remains subject to a final investment decision, among other items.

This means that AVZ could potentially end up owning as little as 51% of the project if things don't go its way.

All in all, this has created significant uncertainty for investors and explains why the AVZ share price was sold off last week.

All eyes, therefore, will be on AVZ shares when the company releases its announcement in the coming days.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Resources Shares

Goldman Sachs says this ASX 200 mining share is in for a 33% whack

The top broker predicts a fairly miserable 12 months ahead for this diversified miner.

Read more »

Female miner in hard hat and safety vest on laptop with mining drill in background.
Broker Notes

ASX expert: Buy Lynas shares now

Top broker Goldman Sachs has this ASX rare earths share on its conviction list.

Read more »

Kid stacking coins from the jar.
Resources Shares

1 ASX penny stock I'd buy in April while it is still only 21 cents

Up 135% since February, I think this ASX penny stock has a lot more gains ahead.

Read more »

A boy is about to rocket from a copper-coloured field of hay into the sky.
Resources Shares

2 ASX copper stocks to buy now for this 'explosive price upside'

I think both ASX copper stocks could continue to deliver outsized gains in 2024.

Read more »

Smiling mine worker at mining site with colleagues.
Resources Shares

How BHP stock could unseat the world's top copper producer

With copper prices surging in 2024, BHP’s portfolio of copper mines are in the spotlight.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Resources Shares

These ASX 300 mining stocks could rise 25% to 50%

Analysts think these mining stocks could deliver big returns for investors.

Read more »

Happy man in high vis vest and hard hat holds his arms up with fists clenched celebrating the rising Fortescue share price
Resources Shares

2 ASX mining stocks smashing the market on Tuesday

Shareholders of these mining shares will be smiling today.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Why top brokers say Rio Tinto stock is a better buy than BHP

The Rio Tinto share price could soar 20% over the coming year, outpacing BHP's share price gains.

Read more »