Kodal Minerals, the mineral exploration and development company focused on lithium and gold assets in West Africa, is pleased to provide an update on the potential for initial rapid development of its Bougouni Lithium Project in southern Mali (“Bougouni” or the “Project”).
The Company continues to review opportunities to accelerate the development of the Project through a faster and lower capital cost dense media separation (“DMS”) processing plant option, that will provide an opportunity for the Company to take advantage of the near-term high price environment in the lithium market.
Highlights of the DMS option:
· Capital development cost for the DMS plant and all associated infrastructure and commencement of mining is estimated at US$65 million, generating an estimated NPV7% of approximately US$557 million (US$420 million post-tax) and, based on full equity funding, a short payback of 2 months from commencement of operations.
· The DMS option is based on:
o processing material from the Ngoualana deposit feeding 1Mtpa of lithium ore to a DMS processing plant
o utilising a conventional circuit to maximise spodumene recovery of over 130,000 tonnes per annum of spodumene concentrate
o an initial 4 year mine life.
· DMS operation revenue forecast to exceed US$1.05 billion in less than 4 years, based on prevailing broker consensus pricing averaging US$2,080 per tonne (FOB basis).
· The DMS operation targets production of a 5.5% Li2O spodumene concentrate product which is consistent with other producers currently active in the market.
· Future expansion of the Project is expected to continue with the construction and commissioning of a down-stream flotation plant expected to be supported by utilising the DMS plant cash flows in order to exploit the resources at Sogola-Baoulé and Boumou, as well as longer term exploration prospects.
Bernard Aylward, CEO of Kodal Minerals, remarked: “The DMS plant scenario provides Kodal with a fast-track option towards achieving our goal of becoming the first operational lithium mine in Mali. At much reduced capital and operating costs, and an expected construction timeline of around 12 months, the DMS development option provides Kodal with a near-term solution to take full advantage of the continuing buoyant lithium market.
“The DMS option has a current mine life of nearly 4 years. This is based on mining all resources at the Ngoualana pit which boasts the highest grade ore of all deposits, with potential to supply additional DMS ore feed from adjacent exploration prospects where previous drilling has intersected with high grade pegmatite veins at Bougouni South, Marigo and Orchard. Importantly, the existing upside from the Sogola-Baoulé and Boumou deposits would be retained and processed in a future flotation plant which can be funded from the DMS operation project cash flows.
“This update utilises prevailing broker consensus pricing for the sale price of spodumene concentrate which has recently traded at spot prices above US$5,000 per tonne. The life of mine average concentrate price for the fast track DMS proposal is US$2,080/t.
“The lithium market continues to be very strong and our Bougouni Project continues to attract strong interest. The DMS development option has attracted interest from the wider market, and Kodal is progressing discussions with market operators and potential financing partners. The Company will provide further updates as discussions progress.”
Further Information – Potential DMS Development and Project Economics Update
The Company is proposing development of Bougouni based on the installation of a modular DMS plant to process material from the Ngoualana deposit which, due to its coarse grain properties, delivers high DMS recoveries.
The Kodal engineering team believes that, once financing and Mali Government update and approvals are received, a DMS plant can be constructed and commissioned within a 12 month period. The expected capital cost of US$65 million compares favourably to the previously published Feasibility Study update in June 2022 which showed a capital cost of over US$154 million for operations based on a flotation plant.
The DMS strategy allows the Company to commence production more quickly, exploiting the near-term advantage of high lithium concentrate prices, to generate positive cash flows which can be used to fund a downstream flotation plant in the future.
In response to rising spodumene concentrate (“SC”) prices and keen interest from potential off-take partners, Kodal is pleased to provide information on its Project development plans and an update on associated economics for a DMS operation at Bougouni. The DMS feasibility study update (“DMSU”) contemplates DMS specific cost input parameters, exploitation of the high grade Ngoualana deposit, near-term spodumene concentrate sale prices and a fast track development timeline.
Key parameters and opportunities from the DMS development include:
· Construction and commissioning time estimated at 12 months, compared to 22 months for a full flotation plant.
· The JORC1 Mineral Resource at Ngoualana stands at 5.1Mt at 1.2% Li2O with 61% categorised as Indicated, with potential to add DMS tonnes from adjacent prospects across the Project’s Mining Licence area.
· DMS recoveries from Ngoualana are much higher than from other deposits at Bougouni (details as announced on 11 May 2020) and recoveries of 71% were achieved from the bulk sample processed by Kodal in 2020 (details as announced on 11 May 2020).
· The DMS proposal at Bougouni is based on an initial mine life of 4 years and processing material from the Ngoualana deposit, based on modified operating assumptions whereby an open cut, truck and shovel contractor mining operation at Ngoualana is retained, but feeding 1Mtpa of lithium ore to a DMS processing plant utilising a conventional circuit to maximise spodumene recovery.
· The DMS operation is expected to produce 5.5% or higher lithium concentrate product which is consistent with other producers currently active in the market.
The planned infrastructure for the DMS operation at Ngoualana includes the infrastructure necessary for a standalone operation including the Ngoualana pit development, waste rock dump, new access road, DMS plant, associated infrastructure and mining services facilities as depicted in the figure below:
1 – Mineral resources are reported using a 0.5%Li2O cut-off. The JORC code Table 1 with details of the resource estimate parameters is available to view on the Company’s website at www.kodalminerals.com
DMS Option Project Capital and Operating Costs
Expected capital and operating costs for the DMS option were derived from previous studies completed at the Bougouni Project, in addition to project specific estimates for the proposed DMS plant and associated infrastructure. The DMSU design concept is based on a fast track approach, utilising modular crushing and DMS processing plant designs which is understood as being capable of being supplied much quicker than the larger bespoke equipment required by a flotation operation (such as grinding mills, where current design, supply and installation timeframes are estimated at 70-90 weeks).
In order to accommodate the 1Mtpa proposed throughput for the DMS operation, the design concept employs dual stream modular crushing and dual stream DMS facilities. This is expected to provide some redundancy across the plant, minimise down time and simplify operational and maintenance activities. Below is a picture1 of the typical DMS plant modules proposed in the design being provided by Kodal’s engineering consultant, DRA Global South Africa (“DRA”).
Pricing has been provided by DRA for the ex-works delivery of the crushing facility and the DMS plant and associated process infrastructure, including an estimate for the installation and commissioning of the facilities. Tailings storage facility and waste rock dump designs are by Knight Piésold in Perth, Western Australia, and pit optimisations and designs are by Orelogy, also in Perth, Western Australia. The aforementioned specialist consultants have been retained from the original pre-feasibility study (“PFS”) deliverable, providing beneficial continuity from established knowledge of the Project.
1 – Above photograph was provided by DRA.
The operational approach for the DMSU matches that contemplated by the PFS, retaining drill and blast and all mining activities utilising contractor mining. The capital cost includes allowance for constructing a dedicated product haulage access road from the DMS operation at Ngoualana, direct to the main highway approximately 8km east.
The drawing below depicts the proposed layout for the dual-stream modular crushing and DMS facilities.
Expected capital and operating cost outcomes and key project development parameters from the DMSU are presented in the table below. All costs are in US Dollars.
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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