AVZ Minerals Limited - Response to Zijin Announcement and Filing of Emergency Order Application

AVZ Minerals Limited (ASX: AVZ, OTC: AZZVF) (AVZ or Company) provides the following update to the Company's shareholders (Shareholders).

AVZ refers to the announcement by Zijin Mining Group Co Limited (Zijin) on 23 October 2023 to the effect that its subsidiary Jinxiang Lithium Limited (Jinxiang) entered into a joint venture with La Congolaise d'Exploitation Miniere (Cominiere) pursuant to which Jinxiang holds 61% of the shares in Manono Lithium SAS which allegedly holds PR 15775 over a northern portion of the Manono Project.

The Company, via its subsidiaries, has resolved to file an emergency arbitration application under ICC rules seeking injunctive relief against Cominiere to enjoin the state owned company from conducting, directly or indirectly, any transaction regarding PR13359 and PR15775 and, generally, to perform certain actions with a view to maintaining and preserving the rights of Dathcom Mining SA (Dathcom) while the arbitration on the merits is pending. The application will also seek an increase of the amount of the daily penalty ordered by the Emergency Arbitrator's Order dated 5 May 2023 (please refer to Company's announcement dated 8 May 2023 'Favourable Ruling in ICC Emergency Arbitration Proceedings against Cominiere'). Cominiere's recent actions purporting to terminate the Dathcom joint venture agreement dated 17 January 2017 as varied from time to time (Dathcom JV), to act as the holder of PR13359, and to attempt to monetise said mining rights with third parties all constitute violations of the terms of the Emergency Arbitrator's Order dated 5 May 2023.

15% shareholding in Dathcom

Zijin states that its payment to Cominiere of USD33.44 million for the 15% of the shares in Dathcom will be 'transferred to the JV for offsetting' against consideration payable by Jinxiang for its 61% interest in Manono Lithium SAS. This acknowledgement that the purchase price for the 15% of shares in Dathcom has been redeployed is inconsistent with Zijin's claim that its subsidiary Jin Cheng Mining Company (Jin Cheng) is a 15% shareholder of Dathcom. It is notable that this announcement was made shortly after the hearing in ICC case 26986/SP on 5 and 6 October 2023 at which AVZ presented its case that the sale of the 15% of the shares in Dathcom was ineffective, either due to the breach of AVZ's pre-emptive right under the Dathcom JV or due to the circumstances in which that agreement was entered into by Jin Cheng and Cominiere some of which were addressed in the IGF Report dated 30 November 2022.

Northern Area

Having apparently abandoned its attempt to appropriate a 15% shareholding in Dathcom, Zijin is instead pursuing, in collusion of Cominiere, a new strategy involving the appropriation of the northern area of the Manono Project. The allegation that Manono Lithium SAS holds PR 15775 over the northern portion of the Manono Project is without any legal foundation. This northern area includes the Carriere de l'Este, Malata and Kahungwe orebodies, the rebuilt Colline Manono construction camp and administrative centre as well as the Dathcom core yard and core farm that hosts the sample library. AVZ maintains that Dathcom is the holder of PR 13359 in respect of the entire Manono Project (including the northern area) and the applicant for an exploitation licence (PE) in respect of that land. AVZ has taken advice and is confident of its position. The purpose of the ICSID proceedings which were commenced by AVZ on 8 May 2023 and registered on 8 June 2023 is to authoritatively establish this. To date AVZ has endeavoured to avoid ventilating its position publicly in case this was perceived as critical of particular Government institutions in the DRC. Unfortunately, the Fat Tail Nominees have sought to construe the lack of information available in relation to AVZ's position as reflecting a lack of merit and instead assume without, any apparent understanding of DRC Law, that outcomes procured by Zijin and Cominiere were lawful and effective.

It follows that PR 13359 held by Dathcom continues in force in respect of the entirety of the Manono Project and that PR 15775 could not be lawfully granted to Manono Lithium SAS in respect of the northern portion of the Manono Project. This remains to be authoritatively determined in the ICSID proceedings. AVZ is seeking to uphold the rule of law in the DRC and the suggestion by the Fat Tail Nominees that the ICSID proceedings are unnecessary or misguided is not correct. It is of concern that some government officers appear to have been procured to make decisions related to PR 13359 and PR 15775 which are contrary to law and would, if given effect, operate to appropriate Dathcom's lawful rights for the benefit of others. Unless immediate action is taken by the State to correct relevant records to reinstate PR 13359 in the name of Dathcom and over the entirety of the Manono Project, AVZ will have no choice but to seek emergency relief from ICSID. Nigel Ferguson and his AVZ team remains in the DRC and continues with their efforts to progress the negotiation of the MOU with the State. Execution of the MOU by AVZ and the State will provide a pathway for resolution of the ICSID proceedings without further escalation. In procuring the purported grant of PR 15775 to Manono Lithium SAS, Cominiere has acted in disregard of the Mining Code. Moreover, Cominiere has acted in contravention of the Dathcom JV as well as the emergency order of the ICC dated 5 May 2023, the latter of which seeks to preserve the status quo including by prohibiting Cominiere from taking steps to implement its purported termination of the Dathcom JV.

Contact:

Mr. Jan de Jager

Joint Company Secretary

AVZ Minerals Limited

Tel: [phone]

Email: [e-mail]

Mr. Peter Harris

Peter Harris & Associates

Tel: [phone]

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