REG - Kodal Minerals PLC - Kodal and Hainan Funding Package Completion

Kodal MineralsAnnouncement

27/10/2023 10:00

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RNS Number : 5532R  Kodal Minerals PLC  27 October 2023

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 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018

 

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

27 October 2023

Kodal Minerals plc

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

 

Kodal and Hainan Group Agree to Completion of Bougouni Lithium Project Funding
Package

 

Kodal Minerals, the mineral exploration and development company focused on
lithium and gold assets in West Africa, announces that the Company, Kodal
Mining UK Limited ("KMUK"), Hainan Mining Co. Limited ("Hainan"), and Hainan's
wholly owned UK-incorporated subsidiary Xinmao Investment Co. Limited
("Xinmao" and together with Hainan, the "Hainan Group") have agreed terms to
complete the funding package announced on 19 January 2023 (the
"Transaction").  KMUK is the Company's new UK registered subsidiary formed to
be the holder of the Mali lithium assets and which will be owned 49 per cent.
by Kodal and 51 per cent. by the Hainan Group.

 

The agreement for completion of the Transaction follows from the waiving of
certain conditions precedent relating to the reorganisation of Kodal's Mali
lithium assets, being (i) the transfer of the Bougouni mining licence from
Future Minerals SARL to KMUK's new Mali subsidiary, Le Mines de Lithium de
Bougouni SA ("LMLB"); and (ii) the transfer of the Sogola-Nord concession to
Future Minerals SARL, which will also be a 100% owned subsidiary of KMUK. The
Mali government will become a shareholder in the subsidiary mining company
following completion of the transfer and finalisation of shareholder
agreements and LMLB has been established to be the holder of the Bougouni
mining licence and operator of the mine.  These transfers will occur at a
later date once formal approval of the Direction Nationale de la Geologie et
des Mines ("DNGM") in Mali has been received. Kodal continues to liaise with
the DNGM to seek completion of the transfers as soon as possible and in the
meantime these assets are deemed to be held on trust for the benefit of KMUK,
whilst Kodal progresses the Bougouni Lithium project with the funding from
Hainan.

 

Kodal has agreed warranties and indemnities up to US$100 million in relation
to the waiving of these conditions precedent for the transfer of the Bougouni
mining licence and the Sogola-Nord concession.  The warranties and
indemnities cover the period from Completion (as defined below) to the point
of transfer of the licence and the concession, with a two year period for
claims to be made.  Kodal will warrant the good standing of the licence and
concession at the time of transfer.

 

The parties are looking to finalise all remaining compliance items as soon as
possible with the expected transfer of money (US$117.75 million in total, of
which US$3.5 million has been received as a pre-payment as announced on 3
August 2023) for the completion of the Transaction now expected in the first
half of November 2023. Consequently, the parties have extended the long stop
date for completion of the Transaction to 15 November 2023 or such later date
that may be agreed in writing between the parties ("Completion").  Upon the
receipt of funds pursuant to the Transaction, the parties expect to accelerate
the development and mining activities of the Bougouni Lithium project,
targeting production as quickly as possible.

 

The full terms of the Transaction were set out in the Company's announcement
on 19 January 2023.

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "Kodal and Hainan have
maintained high levels of communication throughout this process of finalising
the funding transaction. This has allowed the parties to agree to the waiver
of the final conditions precedent in the interest of moving forward with the
project.  Kodal and Hainan are both very keen for the next important stage of
mine development to commence as soon as possible.

 

"The development activity is progressing on site with the road upgrades to
provide access for the start of construction of site infrastructure. Off-site
Kodal, Hainan and our consultants are continuing to finalise the engineering
design of the processing plant as well as progressing mine design and site
optimisation.

 

"The completion of the funding package transaction is a major milestone for
the development of the Bougouni Lithium project, and we are looking forward to
working closely with our partners to achieve production as soon as possible
from the Bougouni Lithium mine."

 

**ENDS**

 

For further information, please visit www.kodalminerals.com
(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/Nick Harriss                             Tel: 020 3328 5656

 SP Angel Corporate Finance LLP, Financial Adviser & Joint Broker

 John Mackay/Adam Cowl                                                 Tel: 020 3470 0470

 Canaccord Genuity UK LLP, Joint Broker

 James Asensio/Gordon Hamilton                                         Tel: 0207 523 4680

 St Brides Partners Ltd, Financial PR

 Susie Geliher/Will Turner                                             Tel: 020 7236 1177

 

 

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