Shares in a tiny Australian miner just jumped more than 70%

Small scale mining in the Congo. Junior Kannah/AFP/Getty Images

Shares in AVZ Minerals surged after the junior Australian miner announced the acquisition of a lithium deposit in Africa.

A short time ago, they were up 73% to $0.033.

The company is buying a 60% interest in the 188 square kilmetre Manono Project, said to be one of the world’s largest lithium-rich pegmatite deposits, in the Democratic Republic of Congo.

Lithium, a key ingredient in batteries to store solar power and to drive electric cars, is the latest commodity to spark an exploration frenzy among Australian miners.

Source: AVZ Minerals

AVZ will pay state-owned enterprise Cominiere $US6 million ($A7.8 million) in cash in installments over three years and privately-owned Dathomir Mining Resources US$750,000 ($A980 million) in cash plus 260 million shares. Other related parties get another 160 million shares.

Cominiere will end up with 30% and Dathomir 10%.

To fund the deal, AVZ has completed a bookbuild for a placement to institutional and sophisticated investors of up to 250,000,000 shares at an issue price of 2 cents to raise up to $A5 million.