Construction of Bougouni Project Update

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.

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: [phone]
Allenby Capital Limited, Nominated Adviser Jeremy Porter/Vivek Bhardwaj/Nick Harriss	Tel: [phone]
SP Angel Corporate Finance LLP, Financial Adviser & Joint Broker John Mackay/Adam Cowl	Tel: [phone]
Canaccord Genuity Limited, Joint Broker James Asensio/Gordon Hamilton	Tel: [phone]
Buchanan, Financial PR Bobby Morse/Oonagh Reidy	Tel: [phone] [e-mail]

 

END