Kodal Minerals narrows loss as it works towards production at Bougouni

The AIM-traded firm said its cash balances stood at £2.38m as at period end, down from £4.09m year-on-year, with its current cash balance being £1.71m.

On the operational front, it said significant progress had been made towards delivering maiden lithium production at its flagship Bougouni Lithium Project in southern Mali.

Publication of its maiden mineral resource was made during the period, which the board said placed Bougouni in the top 15 lithium projects globally, with “substantial” exploration upside remaining.

The potential for low-cost production was demonstrated by the initial processing review, the company claimed, with an estimated production cost of $400 per tonne of spodumene concentrate, which compared to a current market selling price of between $800 and $900 per tonne.

Kodal said the appointment of an experienced project manager would drive development at Bougouni, with initial production targeted in 2020.

There was also additional upside potential through exposure to gold projects being advanced through a joint venture with Resolute Mining.

“2018 has been a year of intense activity and delivery as we move closer to becoming West Africa's newest lithium producer,” said chief executive officer Bernard Aylward.

“Since acquiring our Bougouni Lithium Project in late 2016, the board and operational team have implemented an ambitious development strategy aimed at delivering a high quality, low capex and low opex lithium mine in as short a timeframe as practicable.

“To this end, 2018 has culminated in the achievement of several key milestones which have added tangible value to our asset, including declaring our maiden JORC-compliant resource of 17.3 Mt at 1.2% Li2O, and propelling it closer to a decision to mine in 2019.”

Aylward said the company’s work on site had resulted in the identification of three initial priority targets - Sogola-Baoule, Ngoualana and Boumou - and a further five earlier-stage exploration prospects.

“However, we believe that this is just the beginning for Bougouni, with all indications pointing to considerable additional upside through further exploration across our extensive 450 square kilometre project area.

“We are following a clear strategy that focuses on establishing a profitable mining operation as soon as practicable and to achieve this we have adopted a parallel exploration and development approach aimed at achieving lithium concentrate production in the near term.”