Prospect Resources

AIM-listed mineral explorer and developer Kodal Minerals has negotiated an agreement which gives the company exclusive rights to explore and an option to acquire two new concessions totalling 200 km2 within 25 km of the advanced Bougouni lithium project in Southern Mali.

Mali – The agreement is with a local Malian company Bambara Resources SARL and covers the newly granted concessions Mafele Ouest and Nkemene Ouest that form the “Bougouni West” project.

The Mafele Ouest concession was granted under ministerial order in Mali on 31 December 2018 and the Nkemene Ouest was granted under ministerial order in Mali on 28 December 2018.  The ministerial orders are valid for an initial three-year term, renewable for two additional two year terms giving a potential seven-year life. 

Under the terms of the agreement, Bambara has agreed to grant Future Minerals SARL (a subsidiary of Kodal) exclusive access to the concessions and rights to explore and mine the concessions (which includes any subsequently granted mining permits or licences granted in respect of the Concession area).

“While our primary focus continues to be the development of our Bougouni lithium project, this new option agreement is a fantastic opportunity for Kodal to expand in this highly prospective region. Kodal has negotiated attractive terms that allow us to explore and potentially discover new zones of lithium mineralisation that would complement our existing project and further enhance our long-term position in this region,” says Kodal Minerals CEO Bernard Aylward.
“Kodal has undertaken initial ground reconnaissance during its due diligence review and has commenced the prioritisation of exploration targets for immediate follow-up. 

“We intend to continue the previously successful exploration programme of surface geochemistry, ground magnetics and drilling to attempt to define new lithium mineralised zones,” Aylward adds.

The Bougouni region of Mali has demonstrated the presence of high-grade lithium mineralisation hosted by pegmatite veins. Kodal is the largest holder of ground in this region and has already managed to secure ground with demonstrated lithium mineralisation at Bougouni.

“This acquisition has enhanced the possibility of further discovery and support for our proposed development of open pit mining and a spodumene concentrate processing plant centred on the region of Bougouni,” says Aylward.

Transaction specifics

Under the terms of the agreement, Kodal and/or Future Minerals will be required to make the following payments to Bambara in order to secure access to the concessions and to earn the 80% interest:

  • upon signing the Agreement, £35 000 in cash and £65 000 in new ordinary shares in Kodal,
  • six months after the execution of the agreement, £70 000 in cash and £65 000 in new ordinary shares in Kodal, issued at a price equivalent to the 10 day VWAP (volume weighted average price) of Kodal ordinary shares prior to the payment date;
  • 12 months after the execution of the agreement, £80 000 in cash and £65 000 in new ordinary shares in Kodal, issued at a price equivalent to the 10 day volume weighted average price of Kodal ordinary shares prior to the payment date.

Upon completion of the three payments set out above, Kodal, through its subsidiary Future Minerals, will be the beneficial owner of 80% of the economic interest in the concessions.
These staged payments allow Kodal/Future Minerals to explore the concessions and gain additional geological and technical knowledge as exploration advances before committing additional funds. The payment of each stage of fees is 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.
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% of the concessions for:

  • a £500 000 cash payment; and
  • the granting of a 2% net sale royalty to Bambara.  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.

These new concessions are immediately adjacent to the Goulamina project, owned by ASX-listed explorer Birimian, where a mineral resource of 103 Mt at 1.34% Li2O has been defined. Kodal is focusing its initial review and targeting on interpreted extensions of the Goulamina structure and parallel positions in a similar geological setting.