By Kiki Kienge
COMINIERE had already started negotiations with the Chinese group, ZIJIN for the acquisition of 15% of its shares in DATHCOM not respecting the agreements of the Joint-Venture, which obliges any partner in the event of the desire to sell its shares. to make a proposal to the other partners, in the event of refusal or a better proposal from a third party, the seller had the right not to sell them to the partners.
COMINIERE declares having sent an information letter to its partner AVZ, but by “error” had sent the letter to the parent company which is AVZ MINERALS which has its partner subsidiary in DATHCOM, AVZ INTERNATIONAL.
Despite AVZ's recommendations on the risks of transactions between ZIJIN and COMINIERE, the latter continued negotiations until it sold 15% of its shares to the Chinese group, a sale deemed illegal by the IGF (Inspection Générale des Finances) . LETTER FROM AVZ :
To \ ATHANASE MWANBA Managing Director of COMINIERE SA in Lubumbashi. Date 04-08-2021 Place Kinshasa Reference C1/098/MMA/08/2021
Subject Your correspondence with reference CEM/DG/051 /amm/2021 dated 2 1/07/2021 entitled; “Application for Acquisition by ZIJIN of the shares of COMINIERE SA in DATHCOM MINING SA”
Dear CEO Athanase .
Mr. Director General.
After receipt of your correspondence referenced > CEM/DG/amm/2021 dated 21/07/2021, the company AVZ MINERALS LID instructed me to enter urgently about the object mentioned in the aforementioned.
Indeed, the correspondence cited above caught the full attention of my client AVZ MINERALS, in this case AVZ INTERNATIONAL, although you addressed this correspondence to AVZ MINERALS.
AVZ MINERALS LTD, in the name and on behalf of its subsidiary "AVZ INTERNATIONAL, once again reiterates its interest in the purchase of 15% of the shares of COMINIERE in DATHCOM MINING
SA in accordance with its correspondence referenced “20191002/NF/mb dated October 2, 2019 addressed to the Ministry of the Portfolio after agreement with yourself.
AVZ MINERALS notifies you at the same time of its desire to receive the benefit of the right of pre-emption which would require, according to our articles of association, that the shares are first offered and sold to the shareholders in the company, but also this comes from the agreements made between parties in the 2017 Joint Venture agreement.
Nevertheless, your correspondence calls for a few comments and reminders within the framework of our privileged business relations as described intra.
I. FACTS
1.1.1. We have acknowledged receipt of your letter with the reference number Ref:
CEM/DG/051 /amm/2021 dated 07/21/2021 with the title “Application for acquisition
by ZiJIN of the shares of COMINIERE SA in DATHCOM MINING #.
You have informed us that you have been informed by ZIJIN MINING GROUP COMPANY LIMITED through its correspondence dated June 13, 2021 in which the group indicated its intention to acquire, partially or totally, the interests of COMMINIERE SA in DATHCOM MINING HER.
You further informed us that you have received the “green light from your board of directors, including a general meeting of COMINIERE in order to start negotiating with them what you had… And you also have a meeting with ZIJIN on the 14th July 2021 during which ZIJIN expressed its desire to acquire at least 15% of the capital of the project. »
II; REMINDERS
2.1.1. You will recall we offered to buy your own shares in DATHCOM, and you gave us the green light to discuss with the DRC government, which we did through the Ministry of Portfolio, and we we have done so in the spirit of our Joint Venture agreement, in particular articles 6 to 7.
2.1.2. Please note that based on the same proposal of the joint venture agreement which is the law between the parties yourself and DATHOMIR you are committed to supporting the efforts of AVZ and DATHCOM MINING SA to carry out fundraising and the development of the Manono lithium project.
2.1.3 As part of the same agreement, you have agreed to refrain from doing anything that could undermine AVZ's efforts to raise funds and develop the projects knowing that AVZ is a listed company with an obligation of transparency and disclosure of any risk for the project.
2.1.4. Any transaction on the sale of shares between shareholders having discussions outside the company in violation of our OHADA corporate governance, our JV agreement and the articles of association in its articles of association.
2.1.5. Having this meeting with ZIIN, including a board of directors without having a meeting beforehand within DATHCOM is in violation of the statutes of DATHCOM MINING SA, the Jouint-Venture agreement and OHADA law. Our articles of association oblige you to first begin by discussing and proposing the sale of the shares to the other shareholders within. We think this would be an unfortunate oversight of our own agreements and you are bringing things back into line by continuing the negotiations started with “AVZ MINERALS LTD”.
2.1.6. Continuing discussions with the ZIJIN company would risk tainting the conversation of PR13359 into an export license because the CAMI is examining the shareholding structure at this time based on the information we have transmitted. Such a transaction would thus risk reducing the efforts of AVZ MINERALS to raise funds in accordance with the promises made according to articles 7 to 9 of the Joint-Venture agreement signed in 2017. We believe that when you will realize the consequences of such an impact on the project and difficulties that it could you will resume discussions with AVZ MINERALS based on a long business relationship.
2.1.7. Also, please note that if you have a transaction with third parties for the purchase of 15% of your shares, this does not mean that you are leaving the company because you have committed to donating 10% of your capital to the government. of the DRC on the basis of the JV agreement and the Mining Code.
2.1.8. Any dealings with a third party during our mining export permit application process will be considered suspicious by the government while we have submitted our shareholding structure.
OUR OFFER
3.1.1. Based on the reasons and legal grounds mentioned below, AVZ still has exclusive rights based on our business relationships and our 2017 Joint-Venture agreement.
3.1.2. We are still interested in purchasing exclusively 15% of your shares as previously expressed, which will include an annual advance and an
agreed amount.
3.1.3, We invite you, in the spirit of our peaceful and mutually beneficial business relations, to respect our articles of association, the provisions of our Joint-Venture agreement, to abandon this process of negotiation with ZIJIN, to return to the negotiating table in accordance with our right of preemption.
On behalf of AVZ MINERALS AVZ MINERALS (On behalf of AVZ INTERNATIONAL (PTY) Ltd)
Me Crhistian Lukusa , Esq
Attomeys at Law/ Avocat à la Cour
Momentum Affomeys & Advisor
AVZ Price at posting:
78.0¢ Sentiment: Buy Disclosure: Held
