REG - Kodal Minerals PLC - Bougouni Construction & Boumou Prospect Update

Kodal MineralsAnnouncement

05/09/2024 07:00

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RNS Number : 0388D  Kodal Minerals PLC  05 September 2024

 

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

5 September 2024

Kodal Minerals plc

("Kodal Minerals", "Kodal" or the "Company")

 

Bougouni Lithium Project Mine Construction Update

& Boumou Prospect Drilling Update

 

Kodal Minerals, the mineral exploration and development company, is pleased
to provide an update on the progress of construction of the Dense Media
Separation ("DMS") processing plant and mining at the Ngoualana open pit mine
at its flagship fully funded Bougouni Lithium Project in Southern Mali
("Bougouni" or the "Project"). The Project is fully funded through the
US$117.5m Hainan funding transaction, (see RNS as previously announced by the
Company on 15 November 2023). This funding transaction includes a US$100m
investment into Kodal Mining UK Limited ("KMUK"), a company owned 51% owned by
the Hainan Group and 49% by Kodal, who is the developer of the Project.

 

We also provide a further update on drilling assay results returned at the
Boumou prospect, located within the Bougouni Lithium Project in Southern
Mali.  These reported assay results are from reverse circulation ("RC") drill
holes completed in April and May 2024, which continue to return lithium
mineralisation and define the geological controls on the Boumou prospect's
pegmatite bodies.  Final assay results for the RC drilling programme and all
assay results for the diamond core drilling are pending, with results expected
in due course.

 

Highlights:

·   The first two shipments from China carrying the critical long lead
equipment items and structural steelwork for the plant buildings have arrived
at the Abidjan Port in Côte d'Ivoire;

·    Offloading at the port has progressed quickly, utilising the services
of Africa Cargo Central, a West African specialist supply chain and logistics
management company;

·    First convoy of trucks arrived at the Bougouni customs post and upon
final clearance will deliver goods to site;

·    The civil construction works have continued to progress well at
Bougouni and overall completion has reached 85% with the completion of only
minor floor slabs and smaller footings remaining;

·    Open Pit mining at the main Ngoualana pit is progressing, with the
removal of overburden continuing and completion of three blasts of exposed
hard rock and pegmatite bodies completed. This will ensure stockpiles of
Ngoualana ore will be available well in advance of commissioning in Q4 2024;

·    Wide, high-grade extensions returned at the Boumou Prospect include:

o  7m at 1.16% Li(2)O from 147m in drill hole KLRC223;

o  13m at 1.07% Li(2)O from 71m in drill hole KLRC224;

·    Diamond core drilling is continuing at the Boumou prospect to provide
detailed geological information as well as samples for future metallurgical
test work and geotechnical logging for open pit optimisation parameters.

 

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "I am delighted to report
that the Stage 1 development of the Bougouni Lithium Project continues to
rapidly advance.  The DMS and Ngoualana open pit development continues to
advance with the open pit mining currently ahead of schedule,  with no impact
from the heavy rainfall experienced in July and early August associated with a
heavy rainy season in 2024.  Ahead of the assembling of the DMS processing
plant, site works have continued to advance as planned with the completion of
the foundations for the DMS units, and processing infrastructure and the
crushing circuit.  The area of the processing plant, office buildings and the
open pit have remained outside of high-water levels and provide confidence of
future mining and processing activities throughout the year."

 

"The arrival of the first shipping cargoes into the Abidjan Port, and
subsequent commencement of transport to the site is yet another positive step
towards the successful development of the Bougouni Lithium Project. The
contract for the DMS site installation has been awarded to local company,
Bambara Resources SARL and subcontractor partner Jinpeng, who have recently
completed the installation of a similar DMS processing plant in Nigeria.  In
addition, the site installation will be supported by expert engineers from
Beijing High Dynamic, for the crushing circuit and from Haiwang Technology
Group for the DMS units.  This oversight will provide additional guidance and
design verification for the successful plant commissioning of the operation."

 

"The development of Bougouni the Project is now entering a critical and
exciting phase as the construction assembling of the processing circuit
commences and we will continue to provide regular updates as work progresses."

 

FURTHER INFORMATION

Ngoualana DMS and Open Pit Development

Shipping Transport

The first two shipments from China carrying the critical long lead equipment
items and structural steelwork for the buildings have arrived at the Abidjan
Port in Cote d'Ivoire. Offloading at the port has progressed quickly,
utilising the services of West African specialist supply chain and logistics
management company, Africa Cargo Central ("ACC"). The equipment and materials
are being consolidated at ACC's yard in Abidjan, and then sorted to ensure
cargo is transported to site in priority order. The first convoy of eleven
trucks has arrived at the Bougouni customs post and, following final
clearance, is expected to arrive on site shortly.

 

The final supply of imported equipment, goods and materials expected from
China will be dispatched in two shipments: the first shipment is currently
being loaded in Tianjin and will contain predominantly the electrical
equipment, cables and cable supports, and the majority of piping materials,
valves and instruments.

 

The final shipment will contain the Project's power plant, transformers and
associated materials. In order to mitigate the impact of any potential impact
delays to commissioning of the DMS processing plant, that may arise with a
delay in the arrival of the power plant, the site team will arrange for
temporary hired generators to be utilised to help conduct the
pre-commissioning of equipment. This will ensure that the main drivers are
operational before connecting to the mains power plant, in order that
commissioning with ore can proceed quickly thereafter.

 

Mining

To date, mining works are progressing ahead of schedule, and the Company is
confident that stockpiles of Ngoualana ore will be available to the plant well
in advance of commissioning.

 

Mining activities have continued to predominantly involve the removal of
"free-dig" overburden at the main Ngoualana pit. Recently in some areas of the
open pit hard rock has been reached recently which will require blasting for
removal.

 

The mining contractor, EGTF Mining SARL ("EGTF") and Auxin Mining Services
Mali SARL ("Auxin"), successfully conducted the first trial blast on the site
ahead of schedule and has subsequently completed two further blasts of hard
rock and pegmatite material. These initial blasts have enabled the mining team
and contractor to test all the safety, communication and operational protocols
required.

 

Civil Construction - Concrete Contract

The civil construction works have continued to progress satisfactorily and
overall completion has reached 85% with only minor floor slabs and smaller
footings remaining to be finished. It is anticipated that the concrete works
onsite contractor will be fully complete in September 2024, providing
unfettered access to the site for structural, mechanical and piping
installation to proceed.

 

SMPP Installation Contractor

The SMPP ("Structural, Mechanical, Platework and Piping") installation
contract has been awarded to Bambara Resources SARL ("Bambara") together with
its key subcontractor, Jinpeng ("Jinpeng"), a construction and installations
specialist engineering company from China.  Jinpeng last year successfully
completed the installation of a DMS processing plant in Nigeria, which is a
plant very similar to the planned Bougouni DMS and was also designed by the
same engineering company from China, Haiwang Technology Group ("Haiwang").

 

The Bambara/Jinpeng contract is similar to the successful implementation
strategy used for the Bougouni civil works whereby Bambara will provide all
local labour, equipment and services and as well as manage Jinpeng, which will
provide the engineering technicians and on-site supervision. Two expert
engineers each from both Beijing High Dynamic (supplier of the crushing
modules) and Haiwang will mobilise to Mali in mid-September 2024 to provide
guidance and design verification during installation and commissioning. The
Project team believes that this contracting arrangement will be crucial to
correctly interpreting the designs and drawings during construction, since
they were developed using Chinese language, as part of the Haiwang package.
Importantly, the arrangement between Bambara and Jinpeng as sub-contractor
will also ensure compliance with Mali's local content laws, as stipulated
under the country's revised mining code and will maximise the employment of
locals.

 

Environmental and Social updates

The Bougouni area has experienced heavy rainfall in July and early August
2024, resulting in some flash flooding and damage to the main road ("RN8")
used by the local communities and by the Company. With the help of Malian
mining contractor EGTF Mining SARL, the Company has conducted multitude of
repairs to the RN8 in order to restore the road to a safe operating
condition.  The 2024 wet season in Mali has been a heavier than usual
rainfall year with the site experiencing significant rises in the water levels
of the Baoule river as well as local creek area.  Positively, the site area
has coped well with the higher-than-normal water levels with the open pit and
processing areas remains above water level.  Access to the site was
restricted for one half day due to road flooding, however, this has had no
impact on the development activities.

 

The procedure for employing workers from the local labour pool is also
operating well. Local recruitment numbers from the impacted villages at
Bougouni for the construction phase has reached a total of 144 personnel.  In
total, the Project employs upwards of 350 personnel, of which currently
approximately 93% are Malian.

 

Boumou Prospect Drilling Update

Further RC drilling results have been received for the Boumou prospect
drilling campaign completed in April and May this year.  The programme
consisted of 18 RC drill holes for a total of 3,234m.  The drilling targeted
further westward extensions of the wide pegmatite bodies intersected in the
March 2023 drilling campaign and the updated Mineral Resource estimate (MRE),
which currently is 13.1Mt at 1.04% Li2O.

The assay results received are from four RC holes targeting the western
extension of the ore body and highlight a zone of strong alteration and
faulting that has resulted in the thinning of the pegmatite bodies and loss of
lithium mineralisation.  This is consistent with the geological
interpretation that highlighted wide continuous pegmatite bodies up to a
marked north-south oriented creek, that was interpreted to be associated with
a fault structure.  The geological team is reviewing and targeting faulted
offsets to the Boumou prospect.

Lithium mineralised results have been returned for two RC drill holes,
targeting the northeastern extension of the Boumou mineralisation.  These
drill hole results are consistent with previous drilling, however, are still
outside of the projected extension of the main zone of wide high grade
pegmatite bodies, and this will be targeted with the diamond drill holes and
further RC drilling.   Assay results are pending for an additional two RC
drill holes along with some re-check sampling.

The Boumou prospect has confirmed a strike length of over 970m and remains
open along strike to the northeast.  Additional drill results from previously
reported are tabled below:

 Hole ID  From (metres)  To (metres)  Width (metres)  Grade Li(2)O (%)
 KLRC223  91             92           1               1.11
          97             100          3               1.21
          147            154          7               1.16
 KLRC224  12             13           1               1.46
          15             17           2               1.40
          25             26           1               1.46
          53             55           2               1.14
          71             84           13              1.07
          115            125          10              0.95

 

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. 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 internal dilution in zones of broad
pegmatite mineralisation.

Diamond core drilling is ongoing to provide detailed geological information to
support the interpretation of the mineralised zones.  The initial geological
logging and comparison of the diamond drill core and the logging of the RC
drill holes has confirmed the continuity of the pegmatite veins and
highlighted the coarse nature and coarse spodumene mineralisation.

 

For further information, please visit www.kodalminerals
(http://www.kodalminerals) .com or contact the following:

 

 Kodal Minerals plc

 Bernard Aylward, CEO                                                  Tel: +61 418 943 345

 Allenby Capital Limited, Nominated Adviser

 Jeremy Porter/Vivek Bhardwaj                                          Tel: 020 3328 5656

 SP Angel Corporate Finance LLP, Financial Adviser & Joint Broker

 John Mackay/Adam Cowl                                                 Tel: 020 3470 0470

 Canaccord Genuity Limited, Joint Broker

 James Asensio/Gordon Hamilton                                         Tel: 0207 523 4680

 Buchanan, Financial PR

 Bobby Morse/Oonagh Reidy                                              Tel: +44 (0)20 7466 5000

                                                                       kodal@buchanancomms.co.uk

 

The exploration results and activity reported in this announcement have been
reviewed by Mr Bernard Aylward who is a Member of the Australasian Institute
of Mining and Metallurgy. Mr Aylward has sufficient experience that is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Qualified
Person as defined in the AIM Note for Mining and Oil & Gas Companies dated
June 2009. Mr Aylward consents to the inclusion in this announcement of the
matters based on his information in the form and context in which it appears.

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