Kodal Minerals PLC (AIM: KOD) has announced that construction at the Bougouni lithium mine in Mali has sped up following the conclusion of an unusually extended wet season.
The installation of structural steel is advancing smoothly, with all major structures now taking form. The company added that this includes the primary DMS module, crushing modules, screening facility, and filtration building.
Furthermore, negotiations with partner Hainan are progressing towards securing an offtake agreement for 100% of the spodumene production from the Stage 1 DMS processing plant.
Kodal is currently negotiating an offtake agreement with Hainan for its operator joint venture, KMUK, which holds a 49% stake for Kodal and 51% for Hainan. The agreement will price spodumene based on market rates, with a minimum price set to ensure all costs are covered.
Kodal clarified that offtake arrangements for Stage 2 production are not included in the ongoing negotiations with Hainan. Additionally, discussions are underway regarding the payment of the final consideration for the license transfer to a KMUK subsidiary.
For the six months ending September 2024, Kodal reported a loss of £1.49 million (£509,000) and maintained cash reserves of £17.5 million as of December 20, 2024.
Highlights
Operational
· Principal operational activity for the period has been the construction of the Stage 1 Dense Media Separation (“DMS”) processing plant at the Bougouni Lithium Project in southern Mali (“Bougouni” or the “Project”), within our associated undertaking Kodal Mining UK Limited (“KMUK”).
· Engineering and development work at Bougouni is close to completion with first production targeted for the first quarter (“Q1”) of 2025.
· Open pit mining is continuing ahead of schedule and a stockpile of ore is being built well in advance of the commissioning of the processing circuit.
· Discussions with the Mali Government regarding the transfer of the Bougouni mining licence have concluded with the signing of a binding memorandum of understanding (the “MoU”).
Financial
· For the 6 months to 30 September 2024, the Company made a loss of £1,486,000 (6 months to 30 September 2023: £509,000), which includes the Company’s share of KMUK’s loss for the period of £832,000 due to the engineering and development work at Bougouni.
· The carrying value of Kodal’s investment in KMUK at 30 September 2024 was £28,207,000.
· Cash balances at 30 September 2024 were £18.1 million (30 September 2023: £1.7 million) and cash as at 20 December 2024 was £17.5 million.
Bernard Aylward, Kodal’s Chief Executive, highlighted several key achievements at Bougouni over the past six months. He stated, “The six month period ended 30 September 2024 has seen significant milestones in the development of the Bougouni Lithium Project by KMUK and the team has worked tirelessly to bring the Project to the cusp of commissioning. The signing of the MoU with the Mali Government provides certainty of State support and will ensure the ongoing stability of Bougouni as we enter the critical production phase.”
“Kodal remains in a strong financial position that will allow us to continue to explore our gold projects in Mali and Cote d’Ivoire as well as to review opportunities that offer further growth and expansion opportunities for the Company.”
“The Bougouni Lithium Project remains a focus for Kodal as we work with our operating partner to complete construction and commence production over the next few months.”
