AVZ Minerals shares are scheduled to resume trading this week. Here’s what to watch

All eyes will likely be on AVZ Minerals Ltd (ASX: AVZ) shares this week. The company is expected to return to trade following an ownership dispute over its flagship lithium project.

The S&P/ASX 200 Index (ASX: XJO) mineral exploration company put its stock in the freezer way back in early May and has continued to extend its halt ever since. It’s now expected to return to normal trade on Thursday.

The last AVZ Minerals share price was 78 cents.

Here’s what market watchers need to know about the company’s dramatic dispute.

What‘s going on with AVZ Minerals shares?

The AVZ Minerals share price could be pulled from the freezer for the first time in nearly four months on Thursday, likely on the back of news of the company’s Manono Lithium and Tin Project in the Democratic Republic of Congo.

The company has 75% ownership of the project’s mining licence. The other 25% is owned by La Congolaise D’Exploitation Miniere SA (Cominiere).

Or is it?

This is where it gets complicated. Cominiere was to cede 10% of its stake to the government of the Democratic Republic of Congo after a mining licence was awarded in early May.

AVZ Minerals then planned to snap up the other 15% held by Cominiere, giving it a 90% share in the project.

But Cominiere allegedly went behind its partner’s back, selling 15% of its stake to another company: Jin Cheng. AVZ Minerals is arguing the sale breached an agreement between it and Cominiere and is, therefore, invalid.

Making the situation more complicated, AVZ Minerals previously agreed to sell a 24% stake to Suzhou CATH Energy Technologies.  

Therefore, if all goes wrong, the ASX-listed company could walk away with a far smaller stake in the project than it previously anticipated.

With all that in mind, market watchers should keep an eye out for news from the company this week. Most important will be any word on its mining and exploration rights for the Manono Project.  

However, the trading halt on AVZ Minerals’ shares could very well be extended once more before Thursday’s open.

The post AVZ Minerals shares are scheduled to resume trading this week. Here’s what to watch appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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.

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