Kodal secures financing for Mali lithium project

The funding package has been agreed with Hainan Mining Co. Limited and its wholly owned UK-incorporated subsidiary Xinmao Investment Co. Limited. Hainan is a subsidiary of Fosun International Limited and is the industrial platform for mining and resources within Fosun. The Hainan Group are highly experienced mining and development professionals and will be working in partnership with Kodal which will continue to provide the Mali and project expertise to develop the Bougouni Lithium project

Highlights:

• US$100 million committed to Kodal's newly incorporated UK subsidiary, Kodal Mining UK Limited (KMUK), by the Hainan Group to inter alia, acquire 51% of KMUK to finance the construction of the mine at the Bougouni Lithium project. 
• US$17.75 million equity subscription by Hainan Group into Kodal at a price of 0.5p per share, being a premium of approximately 100% to the previous 10-days' VWAP (the subscription). 
• KMUK would be fully funded for the US$65 million capital cost of the dense media separation (DMS) development scenario at Bougouni and is targeting delivery of first production within 12 months of receipt of funds.
• The additional funds received by KMUK beyond the DMS funding will be directed to expansion activities to increase the Bougouni project JORC compliant resource inventory currently at 21 million t @1.11% Li₂O and extend production beyond the initial four-year mine life. 
• The US$17.75 million raised from the subscription will be used to advance the company's portfolio of gold exploration assets in Mali and Cote d'Ivoire, as well as the assessment of new exploration and development opportunities in West Africa.

Bernard Aylward, CEO of Kodal Minerals, commented:

"This is a great outcome for Kodal following a competitive and complex process to ensure we received appropriate recognition for the underlying value of this asset.

"We are very pleased to welcome the Hainan Group as investors into Kodal and as partners for the development of the Bougouni Lithium project. This investment provides us with a great opportunity to fast track to production of spodumene concentrate in a very strong market. The level of funding will allow us to fully fund the dense media separation plant with mining planned to commence at the high grade Ngoualana deposit as well as to support major drilling and exploration campaigns to discover and define additional lithium mineralisation to seek to increase the life of the mining operation at Bougouni.

"The Hainan Group have completed extensive due diligence of the Bougouni project and confirmed the potential of this quality project leading to this new partnership.

"The lithium sector remains very buoyant with high demand and market prices for spodumene concentrate. The demand is supported by the increasing take-up of electric vehicles (EVs) and the demand for secure supply is very high. Kodal will be looking to complete an off-take agreement for the amount of product that it is free to sell outside of existing arrangements and will also review the potential to become involved in downstream processing to enhance the value of the product if viable."

Liu Mingdong, Chairman of Hainan Mining, commented:

"This investment in Kodal and Kodal Mining UK Ltd is in line with Hainan Mining's strategy of improving the level of resource and feedstock security, and commencing the building of our lithium hydroxide supply chain. It is a milestone for Hainan Mining's African footprint and globalisation. We are looking forward to working closely with our partner and jointly developing the Bougouni Lithium project in an effective way, aiming to start production and reach full scale operations as quickly as possible and create value for both partners shareholders and the people of Mali."

Read the article online at: https://www.globalminingreview.com/mining/23012023/kodal-secures-financing-for-mali-lithium-project/