Kodal agrees transfer of Bougouni licence with Mali government

1st Nov 2024 15:05

(Sharecast News) - Kodal Minerals announced on Friday that it has reached an agreement with the government of Mali for the transfer of the Bougouni Lithium Project's mining licence to its Malian subsidiary, Les Mines de Lithium de Bougouni (LMLB).

The AIM-traded firm said the project in Southern Mali was fully funded through the $117.5m Hainan transaction, which included a $100m investment in Kodal's UK subsidiary, Kodal Mining UK (KMUK), owned 51% by Hainan Group and 49% by Kodal.

Under a binding memorandum of understanding (MoU), the Bougouni mining licence would now be governed by Mali's 2023 mining code.

The terms specified that the Malian state and private investors would hold a combined 35% equity in LMLB, with KMUK retaining 65%.

It said the licence had an initial 10-year term, with renewal guaranteed under existing mining regulations.

Additionally, the MoU extended customs and duties exemptions for the construction phase, and secured all required operational permits, including export permits for spodumene.

The agreement also included a $15m cash payment to the Malian government, payable in two instalments by KMUK, with the first due on signing and the final by 31 March next year.

Following the transfer, the Bougouni mining licence would be fully compliant with legal requirements, ensuring the project's standing and operational continuity.

"The MoU with the state for the transfer of the Bougouni mining licence is the final legal step required as we rapidly progress the construction of the project, with production on track for the first quarter of 2025," said chief executive officer Bernard Aylward.

"The transfer of the mining licence to the mining company LMLB confirms the good standing of the project and provides certainty of state support and ongoing stability of Bougouni.

"The strong partnership built between Kodal and the state has allowed discussions to be accelerated, culminating with this landmark MoU."

At 1442 GMT, shares in Kodal Minerals were down 5.6% at 0.41p.

Reporting by Josh White for Sharecast.com.