AVZ Minerals Limited : - Manono Lithium and Tin Project Operational Update

AVZ Minerals Limited (ASX: AVZ, 'the Company') is pleased to provide an operational update on the Manono Lithium and Tin Project ('Manono Project').

The Definitive Feasibility Study ('DFS') is progressing well and remains on track to be delivered in Q1 2020. The DFS is currently 82% completed. Further information on sub-sections of the operations is provided below.

Pit Dewatering

Pit dewatering at Roche Dure is advancing well and continues. Two pumps have been operational for more than 85% of the time with the larger pump continuously pumping water from the Roche Dure pit. The smaller pump has assisted in areas where the larger pump could not access and as a result, excellent progress has been made as evidenced in the 'before' and 'after' images presented below.

Once dewatering of the pit is completed, AVZ intends to undertake further sampling of the pegmatite that is exposed in the pit floor to upgrade Mineral Resource categories from Inferred to Indicated and from Indicated to Measured. The time taken to conduct this extra sampling is not expected to affect the timeframe for the release of the DFS in Q1 2020.

Metallurgical test results

A two-tonne bulk sample was crushed and homogenised to 32mm for further test work material supply. The resulting 10 variability subset samples were crushed and homogenised to 12.5mm with head assays received and aligning well with estimated assays from previous core assay determinations. All screened undersize materials were also assayed and provided further positive confirmation of assay work completed to date with the reported numbers aligning very well. These samples are now pending Heavy Liquid Separation ('HLS') test work and will be reported in Q1, 2020 but will not impact the DFS timeline.

High Pressure Grinding Rolls ('HPGR') performance test work has been undertaken on initial prepared material. The analysis indicates a 6mm screen would be suitable to produce a 3mm p80 product. However, it has been decided to relax this target for test purposes given the benefit of 5% additional mass to the Dense Media Separation ('DMS') feed if screened at 8mm. A head assay received for the bulk composite aligns perfectly to assay estimates by interval. The head lithia assay is 1.66% lithia and 0.6% Fe2O3.

DMS feed preparation and optimisation work continues within schedule. Some work has been completed in late December and will be reported in January 2020. The following work is pending or partially completed but will be completed as scheduled for the DFS within Q1 2020: tin extraction from the coarse DMS concentrate; moisture determination and sample preparation and grind establishment.

Low Intensity Magnetic Separation ('LIMS') has been completed with results now being prepared for reporting and as such, this section of the metallurgical test work for Phase 2 is complete. Further work to be undertaken in Q1 2020 includes flotation test work, rheology and thickening and tailings samples.

AVZ Power

AVZ Power is now fully incorporated and the in-country team has been having in-depth discussions at Ministerial level on the re-development of the Mpiana Mwanga hydro power facility located some 85km south-east of Manono. Several consultants have been to site to assess the necessary refurbishment in a staged manner to match the staged development of the Manono Project. The reports on these visits will be included in the DFS along with costings for the same. Progress has been excellent and AVZ is delighted with the outcome of discussions and visits so far.

Transport studies

A team of consultants have been investigating the Tazara and other railway systems in the region with a view to selecting the most suitable and cost effective method of transporting Manono's lithium products to port.

Further investigation of the Walvis Bay Corridor route is to be undertaken in January 2020 as a complimentary route to Angola and Tanzania. Walvis Bay is further in distance from Manono but is in very good condition, having just been completed and both the port and railway are under utilised at present, with the port only operating at 30 per cent capacity.

Upon further investigation, it was also found that the SNCC railway within the DRC is operational between Tenke Fungurume and the port of Lobito in Angola. The railway is used to export copper products from the Kolwezi and Tenke Fungurume areas of the DRC.

The railway line within Angola was completed some four years ago and is of international standard. In order for AVZ to make use of this rail route, AVZ would need to upgrade approximately 220km of existing gravel road between Manono and the railhead north of Tenke Fungurume at Kabondo Dianda, during the construction phase of the Manono mine. This route presents as the simplest and most cost effective investigated to date.

Utilising the port of Moba is no longer under consideration given the length and cost of rehabilitation to the road and port as required by AVZ. In addition, the 'Mitwaba' road between Likasi and Manono is nearing completion to a good quality, all weather gravel road level with a current transit time of about two days as compared to pre-refurbishment transit times of seven days. It is expected that completion of this road will coincide with the oncoming dry season in 2020. Stage 2 of the road development, asphalting the surface, is expected to commence once the wet season is completed and any subsidence has been attended to.

Equity in the Manono Project

Favourable discussions continue with senior ministers on securing extra equity in the project from AVZ's Joint Venture partners, La Congolaise D'Exploration Miniere and also with Dathomir Mining Resources SARL.

AVZ's Managing Director, Nigel Ferguson said: 'The Company remains on track to deliver its Definitive Feasibility Study in Q1 2020. We continue to investigate our export routes and are looking to secure DRC Government benefits by way of supportive tax incentives and exemptions early in 2020.

'Furthermore, we are in ongoing discussions with a number of interested parties around longer term partnerships involving offtake and debt financing. It is expected that the completion of the DFS will solidify these discussions into meaningful financing of the project.

'All in all, we achieved significant progress during 2019 and we look forward to another exciting 12 months ahead for our world-class Manono Project.'

This release was authorised by Mr Nigel Ferguson, Managing Director of AVZ Minerals Limited.

Contact:

Mr. Leonard Math

Tel: [phone]

Email: [e-mail]

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