(Sharecast News) - Lithium-focussed explorer and developer Kodal Minerals updated the market on its Bougouni Lithium Project in southern Mali on Friday, reporting steady advancement in the engineering work for the dense media separation (DMS) plant.
The AIM-traded firm said the progress had been partly funded by a conditional prepayment of $3.5m from Hainan Mining.
Furthermore, Kodal said it had officially notified the Direction Nationale de la Géologies et des Mines (DNGM) of the phased development, as mandated by the 2019 Mali Mining Code.
In other notable developments, senior executives from Kodal were in Mali to greet Hainan's primary representatives, affirming a close collaboration during the project's finalisation stages, including design, construction, commissioning, and subsequent operations.
Discussions concerning the Bougouni Lithium Project's progression and the inception of site development occurred between Kodal, Hainan, and the director general of the DNGM.
After successfully registering Kodal Minerals' new subsidiary mining company in Mali, Le Mines de Lithium de Bougouni (LMLB), the company said it proceeded to submit the essential formal notification.
That delineated the transition to a phased development strategy, highlighting the 'phase one' DMS development plan at Ngoualana and the impending flotation operation, referred to as 'phase two'.
As the DMS plant design neared completion, procurement details were finalised in preparation for the $100m financial package from Hainan.
That funding, however, remained contingent on the final regulatory approvals in Mali, as the firm announced on 31 August.
"Kodal and Hainan continue to work closely together to finalise the major funding package as announced 19 January, and significant progress is being made towards completion," said chief executive officer Bernard Aylward.
"Kodal and key Hainan representatives have met in Mali to meet with government officials and undertake site visits in preparation for the commencement of development.
"Our engineering team, with assistance from key consultants and support from Hainan, have submitted our notification to the DNGM, which outlines the company's phased development approach."
Aylward said the phase one DMS development plan would provide a fast-track pathway to lithium concentrate production at comparatively low capital costs and an expected construction timeline of around 12 months, exploiting the coarse-grained spodumene prevalent at the Ngoualana deposit.
"Phase two will see the construction and commissioning of a down-stream flotation plant, which is expected to be supported by utilising phase one cash flows in order to exploit the finer-grained spodumene resources at Sogola-Baoulé and Boumou, as well as longer-term exploration prospects.
"The development of Bougouni continues to receive strong support from Mali government officials and within the local community, and the company will be commencing the upgrade of local access roads in the coming weeks in preparation for major development activities to commence on site at Bougouni."
At 1522 BST, shares in Kodal Minerals were down 2.11% at 0.54p.
Reporting by Josh White for Sharecast.com.
Kodal Minerals (KOD)