Kodal Minerals PLC (KOD.L) Mining Licence Granted – Bougouni Lithium Project

Kodal Minerals, the mineral exploration and development company, is pleased to announce that it has been granted a Mining Licence for its flagship Bougouni Lithium Project in Mali (“Bougouni” or the “Project”).

The Project is now fully permitted for development with the previous approval of the Environmental and Social Impact Assessment (“ESIA”) in November 2019.

Highlights

· Permis d’Exploitation number No2021-0774/PM-RM (“Mining Licence”) granted to Kodal Minerals’ Mali subsidiary company, Future Minerals SARL, and is valid for an initial 12-year term and renewable in ten-year blocks until all resources mined.

· The Mining Licence is granted under the 2019 Mining Code and extends over 97.2 square km covering the proposed open-pit mining and processing operation at Bougouni.

· As a next step, Kodal has commenced a programme of work to update the Feasibility Study announced in January 2020 ahead of securing funding for mine development and construction. The programme has a six-month time estimate and will focus on:

o Metallurgical test work for variability testing and confirmation of process flowsheet, investigating the potential for increased metallurgical recoveries;

o Completion of geotechnical and hydrogeological reviews for open pit and the tailings dam;

o Update and finalisation of capital cost estimates and operating costs for the proposed development; and

o Community development and stakeholder engagement activities at Bougouni.

· Strongly rising prices for spodumene concentrate highlight opportunity for Project development with recent average pricing levels exceeding US$1,250 per tonne 5% Li2O spodumene concentrate, compared with the initial US$680 per tonne for 6% Li2O spodumene concentrate used in the 2020 Feasibility Study.

Bernard Aylward, CEO of Kodal Minerals, commented: “The granting of the Mining Licence for Bougouni has come at a great time for Kodal with the increasing global focus on battery metals and the recognition of potential supply deficits highlighting the value of our fully permitted Bougouni Lithium Project.

“We announced our Feasibility Study in January 2020 and the programme of work we are currently undertaking will lead to an updated Feasibility Study that is expected to support a Decision to Mine. Our initial study highlighted very robust fundamentals, but the world of battery metals has shifted significantly in this time, and during 2021 alone, we have seen lithium prices and demand surge. The timing of Kodal’s permitting and potential development timeline highlight how well positioned our Bougouni project is to capitalise on the widely forecast lithium hydroxide and lithium carbonate shortages which are expected by 2023.

“We are looking forward to the construction phase of this project and we are confident of achieving support to finance the capital required for our target of development of the first lithium mine in Mali. I look forward to providing further updates on our progress in due course.”

Additional Information

Lithium Market Commentary

Battery demand continues a strong growth path. The World Economic Forum September 2019 report “A Vision for a Sustainable Battery Value Chain” highlights that the growth in demand for batteries between 2010 and 2018 grew at 30% annually and is expected to maintain a strong growth profile through to 2030 with an estimated 25% annual growth rate. The demand is strongly supported by the major increase in electric vehicles and utilisation in large scale electrical infrastructure grids.

This increase in battery demand has led to increasing supply deficit and strongly rising prices. Research by analysts including Macquarie Group highlight the increasing spodumene price with short-term peak prices expected to reach a new peak level of US$1,350 per tonne in 2022 and have upgraded the long term spodumene price to US$850 per tonne. Recent reports from spodumene producers have indicated prices up to US$2,350 per tonne and average prices exceeding US$1,250 per tonne for a spodumene concentrate grade of 5.5% Li2O.

These strong prices compare very favourably with the conservative value of US$680 per tonne of 6% Li2O spodumene concentrate utilised in Kodal’s 2020 Feasibility Study of the Bougouni project.

Bougouni Engineering and Development Work Programme

Kodal Minerals completed the initial Bougouni Feasibility Study in January 2020 to support the mining licence application, details of which were announced on 27 January 2020. The Project was based on a proposed open pit mining operation with a 2Mtpa processing plant utilising a conventional flotation circuit to maximise spodumene recovery. The Feasibility Study indicated a very robust project with fundamentals including:

o Minimum 8.5-year mine life producing on average 220,000 tonnes of 6% spodumene concentrate per annum, at life of mine (“LOM”) lithium average metallurgical recovery of 71%;

o Total LOM will produce 1.94Mt of concentrate with LOM revenue exceeding US$1.4bn; and

o Estimated C1* cash costs of US$431 per tonne concentrate (US$466 including royalties and sustaining capital).

*C1 is the net direct cash cost that represents the cash cost at each processing stage from mining through to recoverable metal as indicated in the RNS 27 January 2020.

Kodal Minerals has prepared a six-month work programme focussed on updating the Feasibility Study and moving to a Decision to Mine status. The work programme will focus on key aspects of the Project where initial studies have indicated potential for significant improvements including metallurgical recovery, optimised processing flowsheet and updated optimisation of open-pit designs.

The metallurgical test work will include variability testing of the orebodies and focus on improving overall recovery of spodumene mineralisation. The initial Feasibility Study utilised a 68% recovery for the open pit optimisations and an estimate of 71% recovery for the processing plant. The review of the metallurgical test work and improvements in the flotation process in operating plants worldwide indicate recoveries exceeding 75% are achievable and will result in increased spodumene recovery.

The objective of this engineering work programme is to provide an update on the capital cost estimate for the development of the Project and complete detailed assessment to confirm the operating costs of the Project including the review of the proposed transport costs (details of which were previously announced on 27 January 2020), ahead of securing funding for mine development and construction.

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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