Bougouni Lithium Project Development Update

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

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

14 November 2024

Kodal Minerals plc

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

Bougouni Lithium Project Development Update and

High Grade Intersections returned for Boumou Prospect Diamond Drilling

Kodal Minerals, the mineral exploration and development company, is pleased to provide an update on the progress of construction of the Stage 1 Dense Media Separation ("DMS") processing plant and mining at the Ngoualana open pit mine at its flagship Bougouni Lithium Project in Southern Mali ("Bougouni" or the "Project"). The Project is fully funded through the US$117.5m Hainan funding transaction (as announced by the Company on 15 November 2023) (the "Hainan Transaction"). The Hainan Transaction included a US$100m investment into Kodal Mining UK Limited ("KMUK"), a company owned 51% by the Hainan Group and 49% by Kodal, which is the developer of the Project.

Highlights:

·    The start of production at Bougouni remains on track for the first quarter of 2025 and remains within the US$65 million capital development budget.

·    The shipment carrying remaining steelwork, platework, mechanical equipment, electrical equipment and piping materials arrived at the Abidjan Port in Côte d'Ivoire. These items have been unloaded and are en route to site.   

·    Following completion of the 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 continue to advance ahead of schedule, with 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.

·    Assay results have been received for the majority of the Boumou prospect diamond drilling programme, which confirms consistent wide, high grade drill intersections including:

o  50.5m at 1.45% Li₂O from 139.5m and

12.75m at 1.80% Li₂O from 126.8m in drill hole KLDH029;

o  36.5m at 1.30% Li₂O from 76.35m in drill hole KLDH038;

o  21m at 1.51% Li₂O from 109.8m in drill hole KLDH039; and

o  51m at 1.39% Li₂O from 110.75m in drill hole KLDH041.

Bernard Aylward, CEO of Kodal Minerals, remarked: "The acceleration in the Bougouni Lithium Project development is very pleasing.  The crushing circuit and the DMS processing plant is 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.  The next phase of drilling will also include geotechnical drilling and metallurgical sampling for assessment of the open pit development of the Boumou prospect."

"As announced on 1 November 2024, a binding memorandum of understanding was signed with the Government of Mali to confirm the transfer of the mining licence to KMUK's subsidiary mining company that will operate the Bougouni mine and the first half of the US$15 million settlement payment has been made by KMUK to ensure we finalise this transfer shortly.  Kodal and Hainan are continuing discussions regarding the off-take agreement and who will have ultimate responsibility for the settlement payment to the Mali Government."

FURTHER INFORMATION

Bougouni Mining Licence transfer

As announced on 1 November 2024, KMUK signed a binding agreement with the Mali Government to finalise the transfer of the Bougouni mining licence to the project mining company as the final compliance item to allow full mining and export of product.  The first half of the US$15m settlement payment has been made to the Mali Government and the licence transfer process is expected to be completed shortly.

Kodal and Hainan are continuing discussions on finalising the off-take agreement and key commercial terms have been agreed by the parties.  Discussions are also continuing between the parties regarding the Mali Government settlement payment in connection with the mining licence transfer.  An update on the discussions will be provided in due course.

Project Development Programme

The start of production at Bougouni remains on track for commencement in the first quarter of 2025. The abnormally long wet season appears to be over and construction activities are progressing well.

Five shipments have arrived in West Africa and the majority of material has been delivered to site.  There is one major shipment outstanding at sea which is carrying the remaining electrical generator units. Two electrical generator units arrived in West Africa this week at the port of Conakry, Guinea, and they are anticipated to be transported to site before the end of the month. The early shipment of these two electrical generator units will mitigate the impact of delays to commissioning. Initially the Company was investigating the hire of temporary electrical generators to be utilised to conduct the advance pre-commissioning of equipment, but the early shipment of two electrical generators will now fulfil this activity.

The construction on site will continue to proceed as quickly as possible, with all steelwork, platework, mechanical equipment, electrical equipment and piping materials delivered.  

Mining

Mining activities continue to progress well in advance of commissioning and future production requirements. The open pit mine has now advanced to predominantly mining hard rock ore and waste mining. Blasting is continuing as required to meet the overall mining schedule. The Ngoualana ore body is well exposed and a total of 59,500 tonnes of ore grading on average 1.20% Li₂O has been mined, which is sufficient ore for the commissioning phase.  

The Company is stockpiling high grade and low grade ore separately in readiness for commissioning. The low grade ore will be used initially during the early commissioning phase of the crushing modules. Only after the circuit has been bedded down and rock boxes filled in the various chutes will high grade ore be introduced.

SMPP Installation Contractor

The SMPP ("Structural, Mechanical, Platework and Piping") contractor, Bambara Resources SARL together with its key subcontractor, Yantai Jinpeng Mining Machinery Company from China, are progressing well with installation works. Steel structural erection is progressing simultaneously at the screening building, the DMS plant itself, and the downstream filtration circuit. Assembly of conveyors is also progressing.

Platforms and handrails are progressing floor by floor as the buildings advance. These activities are essential for providing safe working access for the follow-on activities of piping and electrical installations.

Expert engineers each from Beijing HighDynamic (supplier of the crushing modules) and Haiwang (supplier of the DMS equipment) continue to work closely with the installation team on site. This approach has been well received by the installation team as any technical queries are answered immediately on site and not reliant on excess reference to the headquarters in China. Representatives from both companies will assist with the commissioning and training process.

Boumou Assay Results

Most of the outstanding assays for the Boumou diamond core drilling programme have now been received.  The remaining samples are a series of check sampling and infill sampling between pegmatite zones to confirm the low-grade waste material and possible wider mining zones of the wide high grade pegmatite veins.

The drilling has confirmed the continuity and depth extension of the core pegmatite veins that mark the extension of the Boumou prospect. The drilling programme has also highlighted a fault zone that may control an offset of the pegmatite zone and highlight further exploration opportunities.

The next steps for the Boumou prospect include further infill and extension drilling prior to an updated mineral resource estimate and a phase of geotechnical and metallurgical drilling to allow the engineering assessment of the open pit potential of the Boumou prospect.

A summary table of the initial mineralised intersections for the assay results received to date is presented below:

Notes:  Drill holes are diamond core drill holes.  Drill holes have been sampled on a 0.5m basis with samples collected from ½ cut HQ size core. All drill holes are geologically logged, and sampling for analysis is based on geological boundaries.  Samples analysed by ALS Global. Assay results are reported as Li% and converted to Li₂O% by a factor of 2.153.  Intersections are reported using geological boundaries for logged pegmatite, with a nominal 0.5%Li₂O lower-cut-off and allowing for internal dilution in zones of broad pegmatite mineralisation.

A full report on the Boumou prospect will be prepared when all assay results have been received.

**ENDS**

For further information, please visit www.kodalminerals.com or contact the following:

The exploration results and activity reported in this announcement have been reviewed by Mr Bernard Aylward who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Aylward has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Qualified Person as defined in the AIM Note for Mining and Oil & Gas Companies dated June 2009. Mr Aylward consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.