REG - Kodal Minerals PLC - Construction of Bougouni Project Update

Kodal MineralsAnnouncement

23/05/2024 07:30

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RNS Number : 6264P  Kodal Minerals PLC  23 May 2024

 

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

 

23 May 2024

Kodal Minerals plc

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

 

Construction of Bougouni Lithium Project Gains Momentum;

Updated Investor Presentation

 

Kodal Minerals, the mineral exploration and development company, is pleased to
provide an update on project development activities at its Bougouni Lithium
Project in Southern Mali ("Bougouni" or the "Project"). The Project is fully
funded following completion of the US$117.5m Hainan funding transaction as
previously announced by the Company on 15 November 2023, with the construction
of Bougouni Stage 1 Dense Media Separation ("DMS") processing plant and onsite
activity progressing on schedule, ahead of first production planned for the
fourth quarter of 2024 ("Q4 24").

 

The company is also pleased to report the release of a new investor
presentation, which can be found on its website at www.kodalminerals.com
(http://www.kodalminerals.com) .

 

Highlights:

·    Manufacture of the DMS processing plant and crushing circuit is
progressing as scheduled with shipping of equipment from China to West Africa
expected to take place on or around 5 June 2024

·    Structural steelwork fabrication advancing with initial shipping to
project site also expected on or around 5 June 2024

·    A consortium of mining contractors comprising Auxin Mining Services
Mali SARL ("Auxin") and Enterprise Générale Traoré et Fréres SARL ("EGTF")
(the "Mining Contractors") was mobilised to Bougouni in April 2024 and site
clearing is complete, ahead of plant construction due to commence in early
June

·    The contract for the site civil construction has been awarded to
Bambara Resources SARL ("Bambara") together with established and experienced
Malian-based company with a China parent, GZB Mali, part of the Gezhouba Group
(GZB), and is expected to mobilise to the site to commence work in early June

·    Resource definition and extension drilling is continuing apace at the
Project's Boumou prospect located within the granted mining licence.
Geological logging of the drill holes indicates continuity of the pegmatite
bodies over a strike length of 970m. All assay results for the drilling are
pending with 2,128 samples awaiting testing by ALS Global laboratories

·    First production of the Bougouni Stage 1 DMS, with a total output of
125ktpa, is on schedule for Q4 24 and is within the capital expenditure
("Capex") guidance of US$65m.

 

Bernard Aylward, CEO of Kodal Minerals, remarked: "The development of the
Bougouni Project is advancing as planned, both off-site and on-site, ahead of
first production scheduled for the end of calendar 2024. It is pleasing that
the manufacture of Bougouni's long lead equipment is progressing on schedule
and that the Kodal Mining UK Limited ("KMUK") project team has secured a
dedicated part-charter shipment from China to West Africa scheduled to depart
in early June 2024."

 

"The charter vessel will transport all major equipment, steelwork, supplies
and reagents required for the Project from China direct to the Port of Abidjan
in Côte d'Ivoire, which has direct links to Bougouni via a secure road
network. Securing a port-to-port direct cargo ship is a major benefit to
delivering our flagship Project on time as it will significantly reduce the
transport time to around 21 days."

 

"Additionally, the Mining Contractors have commenced site works at Bougouni
and the plant site area is cleared and readied for concrete installation,
marking a huge leap forward in Bougouni's trajectory. The civil engineering
contract has also been awarded and the first concrete pour is anticipated for
early June to prepare the site for the delivery of the DMS processing plant
and crushing circuits."

 

"Further drilling at the Boumou prospect was undertaken in April and May 2024,
and the team continues to observe spodumene-rich pegmatites in both reverse
circulation ("RC") drilling and diamond core, which is also hugely encouraging
as we aim to increase the mineral resource estimate ("MRE") to 50Mt and
beyond. Boumou continues to impress and provides the Company with near-term
potential for resource expansion."

 

"We remain on track to achieve first production by year end, and within the
projected Capex cost of US$65m."

 

FURTHER INFORMATION

 

Long Lead Equipment

Manufacture of the crushing circuit and the DMS processing equipment is near
completion with both suppliers on track to deliver all equipment and
associated spares in early June 2024 to the port of Tianjin, China for
consolidation prior to loading onto the dedicated cargo vessel.

 

The crushing modules are being manufactured by Beijing HighDynamic Technology
Co., Ltd. ("BHD"), which is located close to the Tianjin Port, the largest
port in Northern China. The DMS equipment is being manufactured by Haiwang
Technology Group ("Haiwang") in Shandong Province, China, which is c.630km
from Tianjin. The project team is coordinating with Haiwang to ensure that all
equipment, parts, spares and associated items are packed and transported to
the Tianjin Port in advance of the deadline for ship-loading.

 

Shipping Transport

The project team has confirmed a schedule of shipping with first departure
scheduled for on or around 5 June 2024 to include the DMS processing plant,
crushing system as well as fabricated steel and piping to complete the
construction of the processing plant. The full transport of material from
China will be planned over three shipments with the final vessel departing
China around the end of June 2024, ensuring that the construction schedule
will be maintained with first production at Bougouni expected to commence in
late 2024.

 

The estimated shipping time on the sea is 21 days, marking a significant
reduction compared with standard freight options that make multiple stops over
the journey for off-loading and on-loading. It is not uncommon for such
standard freight operations to exceed 45 days on the water from China to
Abidjan.

 

Mining Contract

As announced on 26 March 2024, the mining contract was awarded to a consortium
between Auxin and EGTF.  EGTF, a fully owned Malian company, mobilised
earthworks equipment to the site last month, and immediately commenced bush
clearing, topsoil stripping and stockpiling, and bulk earthworks. The process
plant area earthworks are nearing completion in readiness for providing access
from the beginning of June 2024 to the concrete contractor.

 

Civil Construction - Concrete Contract

Following a tender process to four companies with local region experience and
based on the designs from Haiwang, the concrete contract was awarded under
budget to a Malian company, Bambara Resources SARL (Bambara). Bambara is a
locally owned Malian company established in 2017 to provide services to the
mining industry in Mali. Kodal Minerals plc has worked with Bambara
previously, through which Kodal was able to acquire the concessions at Mafele
Ouest and Nkemene Ouest that form the "Bougouni West" project, further details
of which were announced on 30 January 2019.

 

Bambara is engaged as the head contractor and will utilise under sub-contract
the services of an established and experienced Malian-based company with a
China parent, GZB Mali, part of the Gezhouba Group (GZB).  GZB boasts 13
years construction experience in Mali, which includes development of several
prominent roads and bridges, and most notably the design and construction of
the third bridge over the Niger River in Bamako.

 

Bambara will provide all local labour and services and manage GZB, which will
provide much of the equipment, engineering technicians and on-site
supervision. The project team believes this contracting arrangement will be
crucial to correctly interpreting the designs and drawings during
construction, since they are developed in Chinese, as part of the Haiwang
package. Importantly, the arrangement between Bambara and GZB as
sub-contractor will ensure compliance with Mali's local content laws as
stipulated under the country's mining code.

 

Exploration at Boumou

Exploration recommenced at the Boumou prospect in April 2024 with infill and
extensional drilling designed to increase confidence in Kodal's resource and
expand the overall tonnes. Assays remain pending from the drilling completed
to date, but observations of RC chips and diamond core drilling at Boumou
continue to point to wide and deep intersections of spodumene bearing
pegmatites.

 

It is noted that some sections of the  prospect's mineralisation appear to be
coarse spodumene crystal, which could provide additional feed stock to the DMS
plant. Diamond core samples are being drilled in the coming weeks for
metallurgical test work to be conducted, which will determine the extent of
Boumou that could be conducive to DMS processing versus flotation (Bougouni
stage 2) processing.

 

The drilling completed to date at the Boumou prospects consists of:

·    18 RC drill holes for 3,234m completed; and

·    3 diamond drill holes for 601m drilled.

All assay results for the drilling are pending. Diamond core drilling is
continuing at the prospect to help provide geological confidence in the
interpretation and confidence of the MRE.

 

Environmental and Social updates

The compensation process for land acquisition at the Ngoualana mine was
concluded with agreement protocols formally signed at the Bougouni local court
in late March 2024. As part of the community consultation process and our
commitment to improving the livelihood of the adjacent communities, the
Company donated two tractors to the Kola-Sokoura and Ngoualana villages. In
addition, with the help of EGTF, a water retention dam was constructed
adjacent to the main access road to provide stored water for the communities.

 

Following consultation with the Ngoualana village, it was discovered the
village's water borehole pump system was inoperable with the community people
forced to walk some 2km each way to fetch water from the Baoulé River. The
project team subsequently arranged to inspect the pump system and conducted
repairs to enable successful re-commissioning of the water supply system.

**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/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 Limited, Joint Broker

 James Asensio/Gordon Hamilton                                         Tel: 0207 523 4680

 Buchanan, Financial PR

 Bobby Morse/Oonagh Reidy                                              Tel: +44 (0)20 7466 5000

                                                                       kodal@buchanancomms.co.uk

 

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