The Bougouni lithium project in Mali is located about 180km south of Bamako and covers an area of 350km2
Kodal Minerals agrees to a funding package with Hainan Mining for the Bougouni lithium project. (Credit: omid roshan on Unsplash)
Kodal Minerals has agreed to a conditional funding package of $117.75m with China-based Hainan Mining and its subsidiary Xinmao Investment which will fully finance the Bougouni lithium project in Mali.
The investment package will cover the development and commencement of production at Kodal Minerals’ lithium project.
Furthermore, the funding package is anticipated to support a major exploration and development programme on Kodal Minerals’ gold exploration assets in Mali and Cote d’Ivoire. It will also be used towards the assessment of new opportunities for exploration and development in West Africa.
As per the terms of the funding package, Hainan Mining will become a 51% shareholder in Kodal Minerals’ newly formed UK subsidiary, Kodal Mining UK.
Kodal Mining UK will become the shareholder of a new Mali mining firm to be established by Kodal Minerals to own and develop the Bougouni lithium project.
Besides, Hainan Mining is expected to complete an equity subscription of $17.75m into Kodal Mining. This will allow the former to become the largest shareholder with 14.8% stake in the UK-based lithium focussed development and exploration company.
Hainan Mining chairman Liu Mingdong said: “This investment in Kodal and Kodal Mining UK Ltd is in line with Hainan Mining’s strategy of improving the level of resource and feedstock security, and commencing the building of our lithium hydroxide supply chain.
“It is a milestone for Hainan Mining’s African footprint and globalisation. We are looking forward to working closely with our partner and jointly developing the Bougouni Lithium Project in an effective way, aiming to start production and reach full scale operations as quickly as possible and create value for both partners shareholders and the people of Mali.”
According to Kodal Mining, the capital costs required for all construction activities and development of the lithium mine are projected to be $65m.
The company expects to expedite the mine construction by using the dense media separation (DMS) processing plant option.
The Bougouni lithium project is located about 180km south of Bamako and covers an area of 350km2.
Kodal Minerals CEO Bernard Aylward said: “This investment provides us with a great opportunity to fast track to production of spodumene concentrate in a very strong market.
“The level of funding will allow us to fully fund the dense media separation plant with mining planned to commence at the high grade Ngoualana deposit as well as to support major drilling and exploration campaigns to discover and define additional lithium mineralisation to seek to increase the life of the mining operation at Bougouni.”
The funding package deal, which is subject to various conditions, is expected to be finalised on or before 30 April 2023.