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Highlights
- Lindian Resources acquires a decade-long lease and royalty on the Woula Bauxite Project.
- Project to yield an annual royalty for Lindian, with production expected within twelve months.
- Strategic port access secured to support Lindian’s bauxite assets in northern Guinea.
Lindian Resources Ltd (ASX:LIN) has secured a 10-year lease and royalty agreement with Enterprise Generale d’Entretien & Construction and Lancinet Dabo over the Woula Bauxite Project in Guinea, West Africa. This binding deal provides Lindian with a passive annual royalty stream, marking a pivotal step for the company in expanding its footprint in the bauxite sector.
The agreement enables the lessees, experienced in the Guinean mining landscape, to advance Woula’s development with the goal of starting construction within the next eight months. Their initial target is to achieve a production level of approximately 2 million tonnes of bauxite annually. The lessees are progressing with necessary licensing steps and have already initiated preliminary work, signaling strong readiness for timely production. First bauxite production is projected within the next twelve months, which would activate Lindian’s royalty stream, estimated between USD 1 and USD 2 per tonne.
Lindian maintains the right to terminate the agreement if the essential Exploitation Permit is not secured within 90 days, aligning with Guinea’s regulatory requirements. Additionally, Lindian has negotiated preferential access to port facilities in northern Guinea, a strategic asset to support both the Woula project and Lindian’s other bauxite developments, Lelouma and Gaoual. These facilities, part of a consortium that includes SIG Infrastructure and STS Group, are undergoing infrastructure upgrades to facilitate exports, with a feasibility study indicating a port capacity of up to 20 million tonnes annually.
The company has further clarified that, should minerals other than bauxite be discovered at Woula, Lindian and the lessees will agree on a separate royalty arrangement reflecting market-standard rates. Additionally, Lindian retains the option for the lessee to acquire its stake in Woula, with a buy-out price starting at USD 15 million in the first year, reducing annually until it reaches USD 6 million by Year 10.
Lindian’s strategic activities extend beyond Guinea, with notable progress on its flagship Kangankunde Rare Earths Project in Malawi. The Kangankunde asset is recognized for its high-grade rare earth oxide (REO) deposits and is positioned as a globally significant project due to its cost efficiency and high-quality metrics. Recent feasibility studies have confirmed Kangankunde’s robust economic potential, backed by supportive local infrastructure and government engagement. Lindian is actively seeking project financing, aiming to commence Stage 1 construction by late 2024.
This lease and royalty agreement fortifies Lindian’s portfolio, allowing the company to derive value from its assets without capital expenditure, while the progress at Kangankunde enhances its strategic growth trajectory in the rare earth and bauxite markets.
