Kodal Minerals PLC (AIM:KOD) shares jumped 16% as the junior said it expects production from its Bougouni lithium mine in Mali to start in the first quarter of 2025.
While slightly later than originally planned, investors seemed reassured by the timeline given some uncertainties in the country and a recent payment dispute with its key partner Hainan.
Weekend news that three executives from London and Australia-listed gold miner Resolute had been detained in Mali’s capital of Bamako might have sparked concern of a more widespread tightening up on overseas mining operators.
But Kodal’s statement today suggests this is not the case.
Similarly, on the payment issue, the group said the first half of US$15 million due to the Mali government for the transfer of the Bougouni licence to joint venture KMUK has been made with talks ongoing about who pays the remainder.
Kodal says it is KMUK’s responsibility but Hainan believes it is the UK firm as it is a tax issue.
Talks are also ongoing about the final details of Hainan’s offtake agreement, though commercial terms are said to be largely agreed according to today’s statement.
China-based Hainan is investing US$117.5 million into the project through US$100 million into KMUK for a 51% stake (Kodal 49%) and US$17.5 million worth of Kodal shares.
KMUK will be the operator of Bougouni, a spodumene lithium project, with the first stage of production to see 125,000t annually of concentrate grading 5.5% Li2O.
In its statement, Kodal said that after an abnormally long wet season, construction progress is accelerating and structural steel erection work has progressed well with all major buildings taking shape, including the main DMS module, the screening building and the filtration building.
Electrical generator units are currently being delivered with the first two units having reached the Conakry port in Guinea and will be transported to the site as soon as possible.
The remainder of the electrical generator units are currently being shipped to the Abidjan Port.
Open pit mining activities at the Ngoualana deposit, meanwhile have seen several blasts conducted in the hard rock.
The main Ngoualana ore body is exposed and a total of 59,500 tonnes of ore grading on average 1.20% Li2O was mined in preparation for commissioning.
Bernard Aylward, Kodal Minerals chief executive, commented: “The acceleration in the Bougouni Lithium Project development is very pleasing.
“The crushing circuit and the DMS processing plant are rapidly taking shape and the commissioning of the crushing circuit will commence in December 2024 followed by the DMS units.
“Additionally, the diamond core drilling results received from the Boumou prospect confirm the continuity of the wide, high-grade pegmatite veins and highlight the potential to continue to expand the mineral resource base at the Boumou prospect.
“Further drilling is planned for the prospect to target extensions of the main zone as well as target new zones with off-set positions from interpreted fault structures.”
Kodal jumped 16% to 0.37p today, valuing the AIM-listed group at £73.5 million.