Bougouni Lithium Project drilling results – High-Grade Intersections at Boumou Prospect; and
Sale of Bougouni West Project
Kodal Minerals, the mineral exploration and development company, is pleased to provide an update on the initial drilling results received for recent reverse circulation (“RC”) drilling completed at the Boumou Prospect located within the Company’s Bougouni Lithium Project in Mali. In addition, the Company announces details of the agreements for the sale of the Bougouni West concessions for a total cash consideration for Kodal of £2.0 million and confirmation of the immediate transfer and sale of the Mafélé Ouest concession.
· Initial RC drilling assay results for the Boumou prospect confirm wide, high grade extensions of the prospect.
· Intersections confirmed are the widest returned to date at Boumou at up to 51m width and the highest grade intersections with grades up to 3.27% Li2O returned for individual samples and significant intersections including:
o 36m at 1.29% Li2O from 93m , including 13m at 1.96% Li2O from 100m in drill hole KLRC197; and
o 51m at 1.08% Li2O from 78m , i ncluding 9m at 1.77% Li2O from 112m in drill hole KLRC198 and 31m at 1.23% Li2O from 42m in drill hole KLRC199.
· These initial drill results confirm an extension of the Boumou prospect for over 250m to the west, and geological mapping indicates potential for over 700m of additional strike length to be added with the identification of pegmatite material along strike.
· With the Company’s focus on its Bougouni Project and this further confirmation of its potential, Kodal has reached agreement to sell its Bougouni West concessions which do not form part of the main Bougouni Project to ASX listed Leo Lithium Ltd (“Leo Lithium”) for a total cash consideration of £2.5 million subject to all agreements being executed, with Kodal to receive £2.0 million and the original concession holder Bambara Resources SARL (“Bambara”) to receive £0.5 million.
Bernard Aylward, CEO of Kodal Minerals, remarked: “The wide, high grade intersections returned for the Boumou prospect confirm our confidence that the Bougouni Project will continue to deliver significant new zones of pegmatite hosted mineralisation and provide confidence for the extension of the mine life at Bougouni. These new intersections are the widest and highest grade so far returned from Boumou, and the geological reconnaissance identifying further extension of strike length point to Boumou developing into a significant prospect. Given the quality of these results, it is likely that the Boumou prospect will be the focus of our further exploration drilling programme which is expected to recommence in early May when all assay results have been received.
“Kodal’s drilling campaign has returned exciting results at Ngoualana, Kola and Boumou to date with further assays pending for the Bougouni South, Boumou and Ngoualana prospects. These final results are keenly awaited as geological logging of drillholes has highlighted the presences of wide pegmatite zones.
“The sale of the Bougouni West concessions is a direct result of our focus on the upside potential at our Bougouni Project, highlighted by these recent outstanding intersections at Boumou and the Company’s priority on providing a long life resource base for the mining operation that we are developing with our partner Hainan Mining Ltd. Kodal believes that the best return for our exploration expenditure will be in the Bougouni Project, however, our agreement with Leo Lithium means we retain exposure to any exploration upside at Bougouni West and that the necessary work will be completed with a greater focus than could be justified by Kodal.”
At the Boumou prospect 7 RC drill holes for a total of 1,344m were completed in the March drilling campaign. The drilling targeted extensions to the west of the defined resource zone and geological logging of the drilling indicated multiple pegmatite bodies intersected with a maximum individual width of 49m continuous pegmatite, and cumulative downhole pegmatite intersections up to 67m in drill hole KLRC198.
Initial assay results have been received for three drillholes and confirm the presence of wide, high grade lithium mineralisation with significant results including:
Notes: Drill holes are RC drill holes. Drill holes have been sampled on a 1.0m basis with samples collected via a riffle split system. Drill hole collars are surveyed using a differential GPS with sub 1-metre accuracy, coordinate system WGS84 – Zone 29N, and all holes are surveyed down-hole for dip and azimuth on approximately 30m intervals. All drill holes are geologically logged, and sampling for analysis is based on geological boundaries. Samples analysed by ALS Global. Assay results are reported as Li% and converted to Li 2 O% by a factor of 2.153. Intersections are reported using geological boundaries for logged pegmatite, with a nominal 0.5%Li 2 O lower-cut-off and allowing for a maximum of 2m internal dilution.
The Boumou prospect has a current Inferred Resource that remains open along strike, and this recent phase of drilling indicates a potential strike length exceeding 750m and up to 1km, providing potential for significant growth in the Boumou prospect defined resource.
Full assessment of the prospect will be completed when assay results are returned, and further drilling can be planned.
Sale of Bougouni West Project
The Bougouni West Project comprises two concessions, Mafélé Ouest and N’kemene Ouest (the “Concessions”). Kodal has entered into a binding agreement with Leo Lithium to sell the Mafélé Ouest concession and has agreed terms for the sale of the N’kemene Ouest concession, conditional on renewal of the licence. The concessions are held in the name of Bambara Resources SARL and Kodal has exclusive access rights for mineral exploration activities on the concessions and an option to acquire an 80% legal and beneficial interest in the concessions.
The transaction will allow Leo Lithium to acquire 100% ownership of the Concessions for a total cash consideration of £2.5 million ( £1.0m for Mafélé Ouest and £1.5m for N’kemene Ouest), of which £2 million will be paid to Kodal and £0.5 million will be paid to the original Concessions holder, Bambara. The Mafélé Ouest cash consideration will be paid £0.5 million to Bambara within 5 days, £0.4 million to Kodal within 5 days and £0.1 million to Kodal on finalisation of the transfer of ownership. The N’kemene Ouest cash consideration will be paid to Kodal, subject to binding agreements being executed as explained below. In addition, Leo Lithium will pay a 2% gross royalty on future revenue from the Concessions, 1.4% for Kodal and 0.6% for Bambara . In the event of an economic mineral discovery on the area of the Concessions which is supported by a bankable feasibility study, then on the granting of a mineral exploitation licence over that area, Kodal has the right to be issued an equity carried interest of 15% in any exploitation company set up for each Concession (subject to dilution from the Mali Government) for no consideration . Leo Lithium is obliged to spend a minimum of AUD$125,000 over two years on mineral exploration activities on each of the Concessions.
The process for the transfer of the licence for Mafélé Ouest will commence immediately and is expected to take a number of weeks to complete. The final binding agreement for sale of the N’kemene Ouest concession will be executed when the licence renewal documentation for the concession is received. The status of the renewal is that it has been accepted by the Direction Nationale de la Geologie etmdes Mines (DNGM) of Mali and recommended for renewal, with the final documents at the Mali Minister of Mines office pending signature. It is therefore expected that the agreement for the sale of the N’kemene Ouest concessions will be executed and the commencement of transfer will commence when the licence renewal is received.
For further information, please visit www.kodalminerals.com or contact the following:
Kodal Minerals plc
Bernard Aylward, CEO
Tel: +61 418 943 345
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