REG - Kodal Minerals PLC - Mining Licence Granted - Bougouni Lithium Project

Kodal MineralsAnnouncement

08/11/2021 07:05

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RNS Number : 5766R  Kodal Minerals PLC  08 November 2021

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.

 

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

 

8 November 2021

 

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

 

Mining Licence Granted for Bougouni Lithium Project

 

Kodal Minerals, the mineral exploration and development company, is pleased to
announce that it has been granted a Mining Licence for its flagship Bougouni
Lithium Project in Mali ("Bougouni" or the "Project").  The Project is now
fully permitted for development with the previous approval of the
Environmental and Social Impact Assessment ("ESIA") in November 2019.

 

Highlights

·    Permis d'Exploitation number N(o)2021-0774/PM-RM ("Mining Licence")
granted to Kodal Minerals' Mali subsidiary company, Future Minerals SARL, and
is valid for an initial 12-year term and renewable in ten-year blocks until
all resources mined.

·    The Mining Licence is granted under the 2019 Mining Code and extends
over 97.2 square km covering the proposed open-pit mining and processing
operation at Bougouni.

·    As a next step, Kodal has commenced a programme of work to update the
Feasibility Study announced in January 2020 ahead of securing funding for mine
development and construction.  The programme has a six-month time estimate
and will focus on:

o  Metallurgical test work for variability testing and confirmation of
process flowsheet, investigating the potential for increased metallurgical
recoveries;

o  Completion of geotechnical and hydrogeological reviews for open pit and
the tailings dam;

o  Update and finalisation of capital cost estimates and operating costs for
the proposed development; and

o  Community development and stakeholder engagement activities at Bougouni.

·    Strongly rising prices for spodumene concentrate highlight
opportunity for Project development with recent average pricing levels
exceeding US$1,250 per tonne 5% Li(2)O spodumene concentrate, compared with
the initial US$680 per tonne for 6% Li(2)O spodumene concentrate used in the
2020 Feasibility Study.

 

Bernard Aylward, CEO of Kodal Minerals, commented: "The granting of the Mining
Licence for Bougouni has come at a great time for Kodal with the increasing
global focus on battery metals and the recognition of potential supply
deficits highlighting the value of our fully permitted Bougouni Lithium
Project.

 

"We announced our Feasibility Study in January 2020 and the programme of work
we are currently undertaking will lead to an updated Feasibility Study that is
expected to support a Decision to Mine.  Our initial study highlighted very
robust fundamentals, but the world of battery metals has shifted significantly
in this time, and during 2021 alone, we have seen lithium prices and demand
surge. The timing of Kodal's permitting and potential development timeline
highlight how well positioned our Bougouni project is to capitalise on the
widely forecast lithium hydroxide and lithium carbonate shortages which are
expected by 2023.

 

"We are looking forward to the construction phase of this project and we are
confident of achieving support to finance the capital required for our target
of development of the first lithium mine in Mali.  I look forward to
providing further updates on our progress in due course."

 

Additional Information

 

Lithium Market Commentary

 

Battery demand continues a strong growth path.  The World Economic Forum
September 2019 report "A Vision for a Sustainable Battery Value Chain"
highlights that the growth in demand for batteries between 2010 and 2018 grew
at 30% annually and is expected to maintain a strong growth profile through to
2030 with an estimated 25% annual growth rate.  The demand is strongly
supported by the major increase in electric vehicles and utilisation in large
scale electrical infrastructure grids.

 

This increase in battery demand has led to increasing supply deficit and
strongly rising prices.  Research by analysts including Macquarie Group
highlight the increasing spodumene price with short-term peak prices expected
to reach a new peak level of US$1,350 per tonne in 2022 and have upgraded the
long term spodumene price to US$850 per tonne.  Recent reports from spodumene
producers have indicated prices up to US$2,350 per tonne and average prices
exceeding US$1,250 per tonne for a spodumene concentrate grade of 5.5% Li(2)O.

 

These strong prices compare very favourably with the conservative value of
US$680 per tonne of 6% Li(2)O spodumene concentrate utilised in Kodal's 2020
Feasibility Study of the Bougouni project.

 

Bougouni Engineering and Development Work Programme

 

Kodal Minerals completed the initial Bougouni Feasibility Study in January
2020 to support the mining licence application, details of which were
announced on 27 January 2020.  The Project was based on a proposed open pit
mining operation with a 2Mtpa processing plant utilising a conventional
flotation circuit to maximise spodumene recovery.  The Feasibility Study
indicated a very robust project with fundamentals including:

o  Minimum 8.5-year mine life producing on average 220,000 tonnes of 6%
spodumene concentrate per annum, at life of mine ("LOM") lithium average
metallurgical recovery of 71%;

o  Total LOM will produce 1.94Mt of concentrate with LOM revenue exceeding
US$1.4bn; and

o  Estimated C1* cash costs of US$431 per tonne concentrate (US$466 including
royalties and sustaining capital).

 

*C1 is the net direct cash cost that represents the cash cost at each
processing stage from mining through to recoverable metal as indicated in the
RNS 27 January 2020.

 

Kodal Minerals has prepared a six-month work programme focussed on updating
the Feasibility Study and moving to a Decision to Mine status.  The work
programme will focus on key aspects of the Project where initial studies have
indicated potential for significant improvements including metallurgical
recovery, optimised processing flowsheet and updated optimisation of open-pit
designs.

 

The metallurgical test work will include variability testing of the orebodies
and focus on improving overall recovery of spodumene mineralisation.  The
initial Feasibility Study utilised a 68% recovery for the open pit
optimisations and an estimate of 71% recovery for the processing plant.  The
review of the metallurgical test work and improvements in the flotation
process in operating plants worldwide indicate recoveries exceeding 75% are
achievable and will result in increased spodumene recovery.

 

The objective of this engineering work programme is to provide an update on
the capital cost estimate for the development of the Project and complete
detailed assessment to confirm the operating costs of the Project including
the review of the proposed transport costs (details of which were previously
announced on 27 January 2020), ahead of securing funding for mine development
and construction.

 

 

**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/Liz Kirchner                                      Tel: 020 3328 5656

 SP Angel Corporate Finance LLP, Financial Adviser & Broker

 John Mackay, Adam Cowl                                          Tel: 020 3470 0470

 St Brides Partners Ltd, Financial PR

 Susie Geliher                                                   Tel: 020 7236 1177

 

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