AMN - MALI: Support for Bougouni lithium project

Kodal Minerals has completed a £500,000 share placing and commenced negotiations for an off-take agreement for future spodumene concentrate produced from its Bougouni lithium project, in Southern Mali as well as a potential further investment into the company of up to £4.3 million.

The agreement is with Suay Chin International, a Singapore registered company formed to take advantage of its extensive connections to supply the Chinese lithium market with a range of clients from acid producers to lithium carbonate producers and to the final lithium-ion battery manufacturer.

Suay Chin has strong support from Shandong Mingrui Chemical Co, which is a long-term supplier to existing lithium carbonate producers in Shandong Province.

Highlights:

• Kodal and Suay Chin have agreed to commence negotiations immediately for an off-take agreement covering 20% of the spodumene concentrate to be produced from the project, with potential for this to increase to 100% at a later date;

• The agreement allows Suay Chin a period of 30 days to undertake due diligence on the company and the project, including conducting site visits, preliminary metallurgical testing and confirmation of geology;

• Following the due diligence and if successful, the agreement contemplates Suay Chin completing a second share placing within a further 15 days to increase its shareholding in Kodal to 20%, which is expected to result in a further cash investment of approximately £4.3 million.

Bernard Aylward, CEO of Kodal Minerals: “This placing, completed at a premium to the current market share price, and the negotiations for an off-take agreement are a great endorsement of our Bougouni lithium project and emphasises the perceived strategic and commercial value in its development.

“Our exploration activity has confirmed the lithium mineralised pegmatite veins at surface and the demonstration of high-grade lithium mineralisation from our drilling has generated a lot of interest in fast-tracking potential development.

“Suay Chin is very positive about assisting us through the metallurgical test work and development phase of the project, and with the additional funding we will continue to advance the project rapidly.

“This investment highlights the emerging lithium mineralised region in Mali, and Kodal is continuing to progress its strategy of developing a mining hub at Bougouni based on multiple high-grade lithium pegmatite veins within the project area. The potential second placing with Suay Chin, if completed, will ensure that Kodal is well funded to produce initial mineral resource estimates at Bougouni and commission further scoping studies.”

Suay Chin has arranged the metallurgical testing of Kodal’s spodumene-rich pegmatite samples by existing lithium carbonate producers in China and is expected to continue to offer strong technical contribution to the development of the project.

Suay Chin is involved in all levels of the lithium market from supplying material to acid producers, supplying spodumene concentrate and lithium hydroxide to the Chinese lithium carbonate producers, to the final end-user chemical and battery manufacturers. The company gets strong support from Shandong Mingrui Chemical Co, which is a long-term material supplier to existing lithium carbonate producers in Shandong Province and has deep understanding about the Chinese lithium market.

www.kodalminerals.com

News courtesy of International Mining