Kodal Minerals On Track for Q1 2025 Production at Bougouni Lithium Project

Highlights:

• Bougouni Lithium Mine to Begin Production Q1 2025: Kodal Minerals targets a first-quarter start date despite minor delays and recent industry concerns in Mali.
• Hainan Partnership and Payment Dispute: Disputes over payment responsibilities are ongoing, but negotiations on offtake agreements are largely settled.
• Accelerated Construction Progress: Key infrastructure developments and open-pit mining activities advance, signaling readiness for December 2024 commissioning.

Kodal Minerals PLC (LSE:KOD) announced that production at its Bougouni Lithium Mine in Mali is set to commence in the first quarter of 2025. The update was well-received by investors, sending shares up 16% to 0.37p, amid confidence in the company's timeline and progress despite earlier uncertainties.

Operational Progress and Construction Milestones

Kodal confirmed that construction activities have resumed momentum following an unusually prolonged wet season. The project’s critical infrastructure components, including the Dense Media Separation (DMS) module, screening, and filtration buildings, are nearing completion. The erection of structural steel has advanced significantly, marking a key milestone in the development process.

Additionally, essential electrical generator units have arrived at the Conakry Port in Guinea and will soon be transported to the project site. Further shipments are en route to the Abidjan Port, underscoring the logistical advancements necessary for timely project delivery.

Open-pit mining at the Ngoualana deposit has also ramped up, with several blasts conducted in the hard rock. The main ore body is now exposed, and approximately 59,500 tonnes of ore, with an average grade of 1.20% Li2O, have been mined in preparation for the commissioning phase slated to start in December 2024.

Financial Developments and Partnership Updates

Kodal’s statement provided clarity on recent financial matters, particularly regarding its partnership with China-based Hainan. The ongoing dispute concerns the remaining payment due to the Malian government for transferring the Bougouni licence. Kodal asserts that the payment responsibility lies with the joint venture entity KMUK, while Hainan contends that it should fall under Kodal's obligations as a tax issue. Despite this, discussions are progressing positively, and commercial terms of the offtake agreement are largely agreed upon.

Hainan’s investment totals $117.5 million, including $100 million for a 51% stake in KMUK and $17.5 million worth of Kodal shares. This partnership is vital for advancing the Bougouni project, which is set to produce an initial 125,000 tonnes of spodumene concentrate annually at a grade of 5.5% Li2O.

Exploration and Resource Expansion

In addition to advancing the main project, Kodal has reported promising exploration results from its Boumou prospect. Recent diamond core drilling has confirmed the continuity of high-grade pegmatite veins, suggesting further resource potential. The company plans additional drilling to explore extensions and new target zones identified through geological interpretations.

Kodal Minerals CEO Bernard Aylward commented: "The progress at the Bougouni Lithium Project is very encouraging. We are on track to commission the crushing circuit in December 2024, followed by the DMS units. Our exploration at the Boumou prospect highlights further resource potential, which we aim to expand with targeted drilling."

Industry Context and Market Reaction

The announcement comes at a time when international investors are closely watching the mining landscape in Mali, following reports of executive detentions at another mining operation. Kodal’s clear update suggests that its operations remain unaffected by these broader concerns, providing reassurance to stakeholders.

Despite the minor delay in production, the strong progress reported has helped alleviate investor concerns, reflected in a 16% share price increase, valuing the AIM-listed company at £73.5 million. The market response indicates confidence in Kodal’s execution strategy and the significant potential of the Bougouni Lithium Project as it nears production.

Looking Ahead

With construction well underway, regulatory discussions progressing, and exploration yielding promising results, Kodal Minerals is poised to enter a new phase of growth. The focus now shifts to completing the final stages of project development, commissioning the processing facilities, and finalizing the offtake agreements, paving the way for a successful production start in early 2025.