AVZ Minerals & Directors Sued Over Alleged Disclosure Failures

Key Takeaways

• Alleged Disclosure Failures: ASIC alleges AVZ Minerals failed to disclose an escalating legal dispute involving its Manono lithium project in the DRC.
• Director Duties in Focus: ASIC claims Managing Director Nigel Ferguson and Technical Director Graeme Johnston allowed misleading ASX announcements and did not ensure proper continuous disclosure.
• Investor Impact: The dispute was not disclosed for nearly 12 months, during which investors relied on AVZ’s public statements regarding ownership and project stability.

Deep Dive

The Australian Securities and Investments Commission (ASIC) has launched Federal Court proceedings against suspended Western Australia–based mineral exploration company AVZ Minerals Limited and two of its directors, alleging failures to disclose critical information relating to a major lithium project in the Democratic Republic of the Congo (DRC).

In a media release on 11 November 2025, ASIC said AVZ breached its continuous disclosure obligations and engaged in misleading or deceptive conduct by failing to inform the market of an escalating legal dispute concerning the ownership of shares in its flagship Manono Project. The company did not disclose the dispute to the Australian Securities Exchange (ASX) as it unfolded.

ASIC has also alleged that AVZ’s Managing Director Nigel Ferguson and Technical Director Graeme Johnston breached their director duties by authorising or permitting company announcements that were false or misleading, or failed to include material information that would have made those announcements accurate.

According to ASIC, the legal dispute in the DRC began in mid-2021, but investors were not informed of the issue until May 2022. At that time, AVZ stated that it retained legal title to a 75% interest in the Manono Project and dismissed the emerging reports as “spurious and immaterial.” The reports included reference to a decision by Le Tribunal de Grande Instance in the DRC in relation to a claim brought by Dathomir Mining Resources SARL over the validity of shareholding documentation in the project vehicle, Dathcom.

ASIC Deputy Chair Sarah Court said the case underscores the importance of transparency when companies operate assets in foreign jurisdictions where independent verification by investors is difficult.

“Proper disclosures were critically important to investors, particularly when the company is operating an asset overseas,” Ms Court said. “In this case it was all but impossible for retail investors to travel to an overseas location in central Africa, in which the company’s operations are being conducted. In those circumstances, investors rely on the company to provide accurate and timely information.”

Ms Court said the regulator alleges that Ferguson and Johnston failed to inform investors of the ongoing issues for nearly a year and did not take reasonable steps to ensure AVZ complied with its legal obligations.

“Continuous disclosure and director duties are not only legal obligations, they are fundamental principles that protect the integrity of financial markets,” Ms Court said. “ASIC is committed to taking action against any entities we consider fail to meet these obligations, to ensure accountability and to maintain investor confidence.”

The proceedings are ongoing.

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