REG - Kodal Minerals PLC - Bougouni Lithium Project Off-Take Agreement

Kodal MineralsAnnouncement

Mon 08:30

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RNS Number : 9472O  Kodal Minerals PLC  30 June 2025

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

 

30 June 2025

Kodal Minerals plc

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

 

Bougouni Lithium Project Off-Take Agreement Signed

 

Mining and Processing Operations continuing on site with over 40,000t of
spodumene concentrate produced and ready for export

 

Kodal Minerals, the mineral exploration and development company, is pleased to
announce that an off-take agreement has been signed for the spodumene
concentrate produced by the stage 1 dense media separation ("DMS") processing
plant at the Bougouni Lithium Project ("Bougouni" or the "Project") in
Southern Mali (the "Off-Take Agreement").

 

The Off-Take Agreement is between the local Mali registered mining company Les
Mines de Lithium de Bougouni ("LMLB") (a subsidiary of Kodal Mining UK Limited
("KMUK") in which Kodal has a 49 per cent. shareholding) and Hainan Mining Co.
Ltd ("Hainan"), whereby Hainan will be the exclusive buyer of 100 per cent. of
the product produced by the DMS processing plant at the Project. The Off-Take
Agreement is for a period of four years with an annual review of the
quantities to be sold and floor price for the concentrate.

 

Summary of the Off-Take Agreement:

 

·      Off-Take agreement finalised for 100 per cent. of spodumene
concentrate produced by the DMS processing plant at Bougouni to be purchased
by Hainan.

·      The initial Off-Take Agreement is for a four year term with the
commencement date set at the receipt of the Mali Government export permit.

·      Spodumene concentrate price to be referenced to the Shanghai
Metals Market ("SMM") published price for 6 per cent. spodumene concentrate,
which is a cost, insurance and freight ("CIF")price for delivery in China.

·      The final price received by LMLB takes into consideration price
adjustments based on grade and quality of material delivered and a calculated
conversion of the free-on-board ("FOB") price to CIF price at the loading port
in West Africa. No discount is applied to the SMM published price for the
calculation reflecting the arms' length negotiation of the parties in
finalising the agreement

·      The Off-Take Agreement pricing will be subject to a floor
price.  The floor price for the initial period of export is suspended and the
parties are negotiating an agreed floor price to take effect from 1 January
2026.

·      Parties to agree an annual quantity and schedule with an expected
minimum of 8,000 wet metric tonnes ("WMT") to be shipped each month.

·      LMLB will receive an initial payment upon loading of a shipping
vessel with spodumene concentrate at the export port in West Africa (initially
Abidjan Port in Côte d'Ivoire) equivalent to 95 per cent. of the value of the
shipment, with the remaining 5 per cent. to be paid following delivery and
confirmation at the destination port in Hainan, China.

·      The Off-Take Agreement is a "take or pay" agreement where LMLB
must supply the spodumene exclusively to Hainan, and Hainan must purchase and
take delivery of, or pay for, an agreed annual quantity.

·      A procedure for sampling, assay and weighing of the spodumene
concentrate will be completed at the minesite upon departure from Bougouni, at
the loading port prior to loading and final confirmation at the destination
port in Hainan.  The procedures will finalise a Certificate of Analysis and
Certificate of Weight that will be used for the calculation of payment.

·      The product quality required has been specified for Li(2)O
content, levels of iron impurity and moisture content and these items will be
measured in the sampling procedures.

·      The Off-Take Agreement provides for dispute resolution should
variations in the assay grade and weight arise.

 

At Bougouni, the DMS processing plant continues to operate well, and technical
improvements continue to be made as the DMS processing plant targets nameplate
capacity. The DMS processing plant has produced over 40,000 tonnes of
spodumene concentrate to date and material is loaded into bags ready for
export.  The LMLB team continue to work with the Mali Government to finalise
requirements for an export licence to facilitate the first sale of spodumene
concentrate.

The first phase of the Bougouni project has a 1.4 million tonnes per year
beneficiation production line, which is expected to produce 100,000-120,000
tonnes per year of lithium concentrate with a yield of more than 5.5per cent.
Li(2)O.

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "This is another important
milestone for the development of Bougouni and confirms the conditions and
pricing mechanism for the sale of all of the spodumene concentrate produced by
the DMS processing plant for the initial four year term of the Off-Take
Agreement.

 

"The Off-Take Agreement sets the price received by LMLB to the SMM published
market price with standard adjustments for grade variation.  In addition, the
payment term of LMLB receiving 95 per cent. of the value of the shipment upon
loading at the export port provides confidence in the cash flow of the
operation in the initial period of export and its move to commercial
production at nameplate capacity.  The Off-Take Agreement confirms the strong
interest of our development partner Hainan in the successful development of
Bougouni and we look forward to our first export of product and first shipment
to depart from the Abidjan port.

 

"Discussions continue with the Mali Government to secure the export permit for
the spodumene concentrate and the site operations team report that over 40,000
tonnes of spodumene concentrate is currently produced on site and available
for export to Hainan."

 

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

 Stuart Gledhill/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

 

 

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