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(Alliance News) - Kodal Minerals PLC on Friday said that it has approved an extension of the long stop date to August 31 from June 30 to complete its January 19 funding package at the Bougouni lithium project in Mali.
Shares in Kodal Minerals, the London-headquartered, West African-focused lithium and gold-focused exploration and development company were down 14% at 0.46 pence in London on Friday morning.
Kodal Minerals, alongside its UK-subsidiary Kodal Mining UK Ltd, Hainan Mining Co Ltd and Hainan's wholly owned UK-incorporated subsidiary Xinmao Investment Co Ltd, have approved a further extension of the long stop date in order to meet certain conditional precedents outlined in the May 31 announcement that remain to be completed.
The Bougouni project covers an area of 350 kilometres near Bamako, Mali, where Kodal Minerals is focussing on lithium mining operations.
Bougouni is an emerging lithium province that has attracted investors and off-take partners seeking to secure a long-term supply of lithium.
The January 19 funding package was agreed between Kodal Minerals and Hainan Mining Co Ltd and its UK subsidiary, with USD100 million committed to Kodal Mining UK by the Hainan Group, and a USD18 million equity subscription by the Hainan Group into Kodal at the price of 0.5 pence per share.
Kodal Minerals said that the condition precedents to be met include the transfer of the Bougouni Project to a new Mali mining company owned by Kodal Mining UK.
"The parties are fully committed to the completion of the funding transaction as soon as possible and continue to work together to prepare for the development of the project with activities including additional metallurgic testwork, engineering planning and review and finalisation for the proposed dense medium separation development," Kodal said.
Kodal Minerals said it remains in regular contact with the local government to satisfy these precedents.
Hainan and Xinmao have confirmed that all approvals obtained from the Chinese government authorities remain valid, and are ready to complete the transaction when the condition precedents are met.
"Kodal and Hainan remain firmly committed to completing the transaction and are working together towards the completion of all condition precedents," said Chief Executive Officer Bernard Aylward.
By Will Neill, Alliance News reporter
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