Why the AVZ (ASX:AVZ) share price is jumping 10%

The AVZ Minerals Ltd (ASX:AVZ) share price is jumping 10% higher on Monday. Here's why investors are buying the lithium explorer's shares…

| More on:
jump in asx share price represented by man jumping in the air in celebration

Image 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 is storming higher on Monday.

In morning trade, the lithium explorer's shares were up as much as 10% to 16.5 cents.

The AVZ share price has since eased back a touch but remains up almost 7% to 16 cents.

Why is the AVZ share price storming higher?

Investors have been buying the company's shares today after it released an update on the Mineral Resource of the Manono Lithium and Tin Project in the Democratic Republic of Congo (DRC).

According to the release, geological modelling of the pit floor has confirmed the presence of high grade, fresh pegmatite in all nine resource holes drilled on sections 7100mN to 7300mN at the Roche Dure.

This has led to its Indicated Resources increasing by 12 million tonnes, leading to its combined Measured and Indicated Resources lifting to 274 million tonnes.

In addition to this, the depth of the Roche Dure pit was shallower than the company was anticipating.

As a result, this is expected to lead to lower strip ratio and increased ore mined over the optimised Life of Mine (LoM) plan, which is forecast to have a positive financial impact on the optimised definitive feasibility study (DFS). This bodes well for upcoming discussions with its financiers and explains much of the rise in the AVZ share price today.

AVZ Managing Director, Nigel Ferguson, commented: "This additional information has resulted in the upgrade of some 12 million tonnes of Inferred Resources to Indicated Resources. These additional tonnes, located at shallow depth in the existing pit, are expected to result in fundamental improvements to the mine design and mining schedule as the optimised mine model will treat the wedge material as ore, rather than waste."

"The lower strip ratio resulting from the increase in ore mined over the optimised mine plan, coupled with lower LOM cost assumptions, is expected to have a positive impact on the optimised DFS to be completed next month which will greatly assist our discussions with prospective financiers," he added.

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

More on Share Gainers

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why 4DMedical, Gold Road, Syrah, and Tyro shares are racing higher today

These shares are starting the week strongly. But why?

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

2 ASX gold stocks racing higher in Monday's sinking market

Investors are sending these ASX gold stocks flying higher on Monday. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords share just rocketed 19% on BIG news

Investors are sending this ASX All Ords share flying on Monday. But why?

Read more »

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Boss Energy, Capstone, Dimerix, and Platinum shares are storming higher today

These shares are having a good finish to the week. Let's find out why.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was the ASX's fourth day of gains for the week today.

Read more »

a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.
Share Gainers

Why Cedar Woods, Healius, NextDC, and Platinum shares are charging higher today

These shares are rising on Thursday. But why are investors buying them? Let's find out.

Read more »