Kodal, through its wholly owned subsidiary Future Minerals SARL (‘Future Minerals’), has been granted exclusive rights to explore and an option to acquire two concessions (Mafele Ouest and Nkemene Ouest) totalling 200km2, together known as the Bougouni West Project.
The Bougouni West project covers an area of 200km2 and is located approximately 25km to the west of Kodal’s existing Bougouni Lithium project. The projects are connected by sealed bitumen road, and access throughout the Bougouni West project is good with local road and tracks available.
The Bougouni West project is located in the Bougouni-Sikasso region, and regional studies completed by CSA Global in 2008 identified high-grade lithium bearing pegmatites within the Bougouni-Sikasso region. The study was commissioned and funded by the World Bank as part of the SYSMIN economic development programme.
The Bougouni West project is located immediately adjacent to the Goulamina project owned by ASX listed Birimian Limited (‘Birimian’) which has defined a pegmatite hosted Mineral Resource of 103Mt at 1.34% Li2O. The exploration undertaken by Kodal will focus on the potential extensions to the mineralised structures defined by Birimian’s work as well as explore for parallel and new mineralised structures within the project area. The Company intends to continue its systematic exploration approach to rapidly explore the project area.
Previous exploration within the Bougouni West project is limited and field reconnaissance by Kodal geologists during a Due Diligence review is highlighting areas for exploration focus. Pegmatite occurrences were identified during a broad scale country-wide development mapping programme; however, the project is yet to benefit from systematic reconnaissance exploration or drilling targeting lithium pegmatites.
The Company will undertake detailed reconnaissance mapping to follow up known pegmatites and seek undiscovered pegmatite outcrops within the project. There are also a number of geophysical anomalies defined from existing datasets, which represent priority targets for on-the-ground follow up mapping and sampling.
The intention of the Company is to advance exploration efforts rapidly in order to prove-up a JORC compliant mineral resource estimate.
As consideration for the agreement , Future Minerals has committed to making the following payments to Bambara:
- £35,000 cash payment and £65,000 payment in shares with the price of shares issued at being the mid-market closing price on day of execution of the Agreement;
- £70,000 cash payment and £65,000 payment in shares six months after the execution of the Agreement with the price of shares issued being determined by the 10-day VWAP of Kodal shares prior to the payment date.
- £80,000 cash payment and £65,000 payment in shares 12 months after the execution of the Agreement with the price of shares issued at being determined by the 10-day VWAP of Kodal shares prior to the payment date.
- At the completion of the three payments Kodal, through its subsidiary Future Minerals, will be the beneficial owner of 80% of the economic interest in the Concessions.
These staged payments allow Future Minerals to explore the concession and gain additional geological and technical knowledge as exploration advances before committing additional funds. The payment of the future fees are solely at the discretion of Future Minerals and Future Minerals retains the right to withdraw from the Agreement at any stage with no penalty payable.
All shares issued as Consideration for the Option payments are subject to a “Lock-In” agreement during the period ending on the 12-month anniversary of the execution of the Agreement.
Under the Agreement, Future Minerals is responsible for all exploration costs up to and including the cost of producing a feasibility study and lodging a mining licence application, progression to which will be dependent on the success of early stage exploration work.
At the completion of a feasibility study and lodging of a mining licence application, Kodal has the right to purchase the remaining 20% holding of Bambara for:
- £500,000 cash payment; and
- Granting of a 2% Net Sale Royalty. The net sale royalty will be based on the sale price received by Future Minerals for lithium concentrate at the point of export and on the net smelter price of any other mineral commodity recovered.