REG - Kodal Minerals PLC - Bougouni Update & First Crusher Module Startup

Kodal MineralsAnnouncement

20/12/2024 07:00

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RNS Number : 9133Q  Kodal Minerals PLC  20 December 2024

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the UK Market Abuse
Regulation

 

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

 

20 December 2024

 

Kodal Minerals plc

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

 

Bougouni Lithium Project Development Update and First Crusher Module Startup

 

Kodal Minerals, the mineral exploration and development company, is pleased to
provide an update on the progress of construction and commissioning 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). This funding transaction includes 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:

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

·    Commissioning of the first of two crushing circuits commenced this
week with a brief successful test on waste rock. The second crusher module
installation continues and is expected to be completed in the next few weeks.

·    Installation of the steelwork for the main DMS building, the
screening building and the filtration building is essentially complete. The
focus of installation works has moved to electrical cabling in the field,
motor terminations and piping installations.

·    The motor control centre ('MCC') cabinets have been installed and the
running of cables from equipment to the MCC has commenced.

·    The shipment carrying the power plant, associated transformers and
switch gear arrived in Abidjan, Côte d'Ivoire and the equipment has now been
received on site. The power plant installation and cabling will commence next
week.

·    Open pit mining activities at the Ngoualana deposit continue to
advance. The main Ngoualana ore body is exposed and over 150,000 tonnes of ore
grading on average 1.17% Li(2)O has been mined in preparation for
commissioning.

·    The exploration team is preparing an in-fill and extension drill
programme for the Boumou deposit, to improve drill density before an update to
the JORC mineral resource estimate will be made. Metallurgical samples have
been assembled and a test programme to confirm recovery using DMS and
flotation processing techniques will be explored.

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "The Bougouni processing
plant construction continues to progress well with the installation of
steelwork and equipment nearing completion. The focus has now shifted to the
installation of the piping and electrical cabling at the DMS and filtration
modules which are critical to starting full commissioning of the plant.

 

"A short trial run of one of the two crushing modules using waste material was
conducted by the site team earlier this week. Although the drives were tested
using temporary power, it is very encouraging to see the first
pre-commissioning activities commencing in December 2024.

 

"Next week, installation of the power plant will commence, which is required
before full commissioning of the DMS plant can commence. This includes
connection of electrical cabling from the power plant to the main transformer,
and from the drives in the field to the MCC.

 

"On the exploration front, we are in the process of designing an in-fill and
extension drilling programme for the Boumou deposit. Additional drill holes
will be needed before we can embark on a full resource upgrade. Samples have
been selected for a Boumou specific metallurgical testwork programme, and both
the DMS and flotation process routes will be explored. The potential for some
parts of the Boumou deposit to feed the existing DMS facility could provide
additional life for this Phase 1 installation."

 

FURTHER INFORMATION

Project Development Programme

The start of production remains on track for commencement in the first quarter
of 2025. The site team this week connected one of the two crushing modules
through the temporary power generator and were able to pre-commission the
first crushing circuit module. A small amount of waste material was fed into
the crushing circuit, and the module operated satisfactorily albeit briefly,
essentially marking the commencement of commissioning.

 

Installation of the second crushing module continues to progress and is
expected to be complete by the end of the month, allowing a similar
pre-commissioning process to be conducted on temporary power.

 

The steelwork erection phase is essentially complete, and all mechanical
equipment is in position. The focus has now turned to installation of piping
and electrical cabling to the equipment itself.

 

The balance of the power plant has arrived on site and installation will
commence next week. This will provide the means of powering up the main
transformer and MCC cabinets. The key screening, DMS and filtration equipment
commissioning will be conducted via the main power systems starting in the
next quarter in the leadup to the first product milestone.

 

Mining

Mining activities continue to progress well in advance of plant commissioning
and future production requirements. The mining contractor is now fully
established and conducting mine operations in a steady state, with in excess
of 150,000 tonnes of ore sitting on the ROM (run of mine) pad, grading on
average 1.17% Li(2)O.

 

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.

 

Boumou Exploration

Following analysis of the latest Boumou assays from the diamond core drilling
(as announced on 14 November 2024), the Company has prepared an in-fill and
extension drill programme which is being scheduled for commencement next
quarter. This programme is aiming to improve the density of drill hole data,
providing additional assay information that will be needed before the next
JORC mineral resource update can be completed.

 

As part of the most recent diamond core drill programme, the Company has
prepared metallurgical testwork samples to be sent to the laboratory for
testing. The testwork programme will include both DMS and flotation process
testing pathways.

 

On visual inspection, the Boumou deposit comprises both coarse and fine
grained spodumene, providing potential for the former to be processed via DMS.
The testwork programme seeks to confirm recoveries for both DMS and flotation
processing, and it is possible that some sections of the Boumou orebody could
be fed to the existing DMS circuit, extending the life of this Phase 1
operation.

 

The flotation testwork data will provide valuable metallurgical recovery
details, including optimisation of flotation reagents, that will be central to
an update of the Phase 2 flotation plant study.

 

Kodal and Hainan are continuing discussions on finalising the off-take
agreement and key commercial terms have been agreed by the parties, subject to
contract.

 

**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.

 

Glossary of Technical Terms

 

 "JORC"  The Australasian Joint Ore Reserves Committee Code for Reporting of
         Exploration Results, Mineral Resources and Ore Reserves 2012 (the "JORC Code"
         or "the Code").  The Code sets out minimum standards, recommendations and
         guidelines for Public Reporting in Australasia of Exploration Results, Mineral
         Resources and Ore Reserves

 

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