REG - Kodal Minerals PLC - Bougouni Lithium Project Development Update

Kodal MineralsAnnouncement

14/11/2024 07:00

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RNS Number : 2367M  Kodal Minerals PLC  14 November 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ("MAR")

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

14 November 2024

Kodal Minerals plc

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

 

Bougouni Lithium Project Development Update and

High Grade Intersections returned for Boumou Prospect Diamond Drilling

 

Kodal Minerals, the mineral exploration and development company, is pleased to
provide an update on the progress of construction of the Stage 1 Dense Media
Separation ("DMS") processing plant and mining at the Ngoualana open pit mine
at its flagship Bougouni Lithium Project in Southern Mali ("Bougouni" or the
"Project"). The Project is fully funded through the US$117.5m Hainan funding
transaction (as announced by the Company on 15 November 2023) (the "Hainan
Transaction"). The Hainan Transaction included a US$100m investment into Kodal
Mining UK Limited ("KMUK"), a company owned 51% by the Hainan Group and 49% by
Kodal, which is the developer of the Project.

 

Highlights:

·    The start of production at Bougouni remains on track for the first
quarter of 2025 and remains within the US$65 million capital development
budget.

·    The shipment carrying remaining steelwork, platework, mechanical
equipment, electrical equipment and piping materials arrived at the Abidjan
Port in Côte d'Ivoire. These items have been unloaded and are en route to
site.

·    Following completion of the abnormally long wet season construction
progress is accelerating and structural steel erection work has progressed
well with all major buildings taking shape, including the main DMS module, the
screening building and the filtration building.

·    Electrical generator units are currently being delivered with the
first two units having reached the Conakry port in Guinea and will be
transported to the site as soon as possible.  The remainder of the electrical
generator units are currently being shipped to the Abidjan Port.

·    Open pit mining activities at the Ngoualana deposit continue to
advance ahead of schedule, with several blasts conducted in the hard rock. The
main Ngoualana ore body is exposed and a total of 59,500 tonnes of ore grading
on average 1.20% Li(2)O was mined in preparation for commissioning.

·    Assay results have been received for the majority of the Boumou
prospect diamond drilling programme, which confirms consistent wide, high
grade drill intersections including:

o  50.5m at 1.45% Li(2)O from 139.5m and

12.75m at 1.80% Li(2)O from 126.8m in drill hole KLDH029;

o  36.5m at 1.30% Li(2)O from 76.35m in drill hole KLDH038;

o  21m at 1.51% Li(2)O from 109.8m in drill hole KLDH039; and

o  51m at 1.39% Li(2)O from 110.75m in drill hole KLDH041.

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "The acceleration in the
Bougouni Lithium Project development is very pleasing.  The crushing circuit
and the DMS processing plant is rapidly taking shape and the commissioning of
the crushing circuit will commence in December 2024 followed by the DMS
units."

 

"Additionally, the diamond core drilling results received from the Boumou
prospect confirm the continuity of the wide, high grade pegmatite veins and
highlight the potential to continue to expand the mineral resource base at the
Boumou prospect.  Further drilling is planned for the prospect to target
extensions of the main zone as well as target new zones with off-set positions
from interpreted fault structures.  The next phase of drilling will also
include geotechnical drilling and metallurgical sampling for assessment of the
open pit development of the Boumou prospect."

 

"As announced on 1 November 2024, a binding memorandum of understanding was
signed with the Government of Mali to confirm the transfer of the mining
licence to KMUK's subsidiary mining company that will operate the Bougouni
mine and the first half of the US$15 million settlement payment has been made
by KMUK to ensure we finalise this transfer shortly.  Kodal and Hainan are
continuing discussions regarding the off-take agreement and who will have
ultimate responsibility for the settlement payment to the Mali Government."

 

FURTHER INFORMATION

 

Bougouni Mining Licence transfer

As announced on 1 November 2024, KMUK signed a binding agreement with the Mali
Government to finalise the transfer of the Bougouni mining licence to the
project mining company as the final compliance item to allow full mining and
export of product.  The first half of the US$15m settlement payment has been
made to the Mali Government and the licence transfer process is expected to be
completed shortly.

 

Kodal and Hainan are continuing discussions on finalising the off-take
agreement and key commercial terms have been agreed by the parties.
Discussions are also continuing between the parties regarding the Mali
Government settlement payment in connection with the mining licence
transfer.  An update on the discussions will be provided in due course.

 

Project Development Programme

The start of production at Bougouni remains on track for commencement in the
first quarter of 2025. The abnormally long wet season appears to be over and
construction activities are progressing well.

 

Five shipments have arrived in West Africa and the majority of material has
been delivered to site.  There is one major shipment outstanding at sea which
is carrying the remaining electrical generator units. Two electrical generator
units arrived in West Africa this week at the port of Conakry, Guinea, and
they are anticipated to be transported to site before the end of the month.
The early shipment of these two electrical generator units will mitigate the
impact of delays to commissioning. Initially the Company was investigating the
hire of temporary electrical generators to be utilised to conduct the advance
pre-commissioning of equipment, but the early shipment of two electrical
generators will now fulfil this activity.

 

The construction on site will continue to proceed as quickly as possible, with
all steelwork, platework, mechanical equipment, electrical equipment and
piping materials delivered.

 

Mining

Mining activities continue to progress well in advance of commissioning and
future production requirements. The open pit mine has now advanced to
predominantly mining hard rock ore and waste mining. Blasting is continuing as
required to meet the overall mining schedule. The Ngoualana ore body is well
exposed and a total of 59,500 tonnes of ore grading on average 1.20% Li(2)O
has been mined, which is sufficient ore for the commissioning phase.

 

The Company is stockpiling high grade and low grade ore separately in
readiness for commissioning. The low grade ore will be used initially during
the early commissioning phase of the crushing modules. Only after the circuit
has been bedded down and rock boxes filled in the various chutes will high
grade ore be introduced.

 

SMPP Installation Contractor

The SMPP ("Structural, Mechanical, Platework and Piping") contractor, Bambara
Resources SARL together with its key subcontractor, Yantai Jinpeng Mining
Machinery Company from China, are progressing well with installation works.
Steel structural erection is progressing simultaneously at the screening
building, the DMS plant itself, and the downstream filtration circuit.
Assembly of conveyors is also progressing.

Platforms and handrails are progressing floor by floor as the buildings
advance. These activities are essential for providing safe working access for
the follow-on activities of piping and electrical installations.

Expert engineers each from Beijing HighDynamic (supplier of the crushing
modules) and Haiwang (supplier of the DMS equipment) continue to work closely
with the installation team on site. This approach has been well received by
the installation team as any technical queries are answered immediately on
site and not reliant on excess reference to the headquarters in China.
Representatives from both companies will assist with the commissioning and
training process.

 

Boumou Assay Results

Most of the outstanding assays for the Boumou diamond core drilling programme
have now been received.  The remaining samples are a series of check sampling
and infill sampling between pegmatite zones to confirm the low-grade waste
material and possible wider mining zones of the wide high grade pegmatite
veins.

 

The drilling has confirmed the continuity and depth extension of the core
pegmatite veins that mark the extension of the Boumou prospect. The drilling
programme has also highlighted a fault zone that may control an offset of the
pegmatite zone and highlight further exploration opportunities.

 

The next steps for the Boumou prospect include further infill and extension
drilling prior to an updated mineral resource estimate and a phase of
geotechnical and metallurgical drilling to allow the engineering assessment of
the open pit potential of the Boumou prospect.

 

A summary table of the initial mineralised intersections for the assay results
received to date is presented below:

 

 Hole_ID  From    To      Width  Grade Li(2)O
 KLDH029  109     122.5   13.5   1.31
          139.5   190     50.5   1.45
          100.5   108.5   8      1.80
          126.8   139.55  12.75  1.80
 KLDH034  119.48  148.6   29.12  1.37
 KLDH035  129.68  146.2   16.52  1.28
 KLDH037  181.68  205.10  23.42  1.32
 KLDH038  76.35   112.85  36.5   1.30
 KLDH039  109.80  130.80  21     1.51
 KLDH040  206     233.50  27.50  1.42
 KLDH041  110.75  161.75  51     1.39
          237.80  249.80  12     1.35
 KLDH042  81.50   96.50   15     1.65
          197.90  215.40  17.5   1.34
 KLDH043  110.75  125.75  15     1.13
 KLDH048  81.50   97.50   16     1.44
          221.96  237.46  15.5   1.31
 KLDH049  48.50   62.0    13.5   1.73
 KLDH051  126.50  148.50  22     1.09
          214.50  225.50  11     1.19

Notes:  Drill holes are diamond core drill holes.  Drill holes have been
sampled on a 0.5m basis with samples collected from ½ cut HQ size core. 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.

 

A full report on the Boumou prospect will be prepared when all assay results
have been received.

 

**ENDS**

 

For further information, please visit 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/Charlie Hammond                                         Tel: 0207 523 4680

 Burson 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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