Kodal Minerals Regulatory News (KOD)

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

30 January 2019

Kodal Minerals plc ('Kodal Minerals' or the 'Company')

Kodal Adds 200km2 of Lithium Exploration Concessions in the Bougouni Lithium Province, Southern Mali

Kodal Minerals, the mineral exploration and development company focused on the Bougouni Lithium Project, is pleased to announce it has negotiated an agreement which gives the Company exclusive rights to explore and an option to acquire two new concessions totalling 200km2 (the "Agreement") within 25km of the advanced Bougouni Lithium Project in Southern Mali ("Bougouni"). The new licence areas are immediately adjacent to the Goulamina Lithium project owned by ASX listed Birimian Limited. The Agreement is with a local Malian company Bambara Resources SARL ("Bambara") and covers the newly granted concessions Mafele Ouest and Nkemene Ouest that form the "Bougouni West" project.

Highlights

· Addition of highly prospective landholding in the Bougouni-Sikasso Lithium region totalling 200km2 in the immediate vicinity of known mineralisation.

· New project area close to existing Bougouni Project and will be explored utilising Kodal's existing proven geological team and infrastructure

· The Agreement grants Kodal exclusive rights to explore the new concessions

· Rapid exploration programme planned - to take advantage of low-cost entry to highly prospective ground

· The Agreement grants Kodal the right to acquire 80% of the concessions via option payments totalling £185,000 in cash and £195,000 in Kodal shares over three stages

· Kodal also has the option, exercisable at its sole discretion once application for a mining licence is made, to move to 100% ownership through an additional payment of £500,000 in cash and the granting of a 2% royalty to Bambara

Bernard Aylward, CEO of Kodal Minerals, said: "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.

"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. These new concessions are immediately adjacent to the Goulamina Project, owned by ASX listed explorer Birimian Limited, where a Mineral Resource of 103Mt 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.

"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."

Further Information

Terms of the Agreement

Kodal, through its wholly owned subsidiary Future Minerals SARL ("Future Minerals"), has entered into the Agreement with Bambara covering the Mafele Ouest and Nkemene Ouest concessions. These concessions were presented to Kodal by Mohamed Niare who is engaged by Kodal as a consultant in Mali and acts as the Company's logistics and Country Manager and is a director of its Mali subsidiary. Mohamed Niare operates a consulting business in Mali and, with Kodal's consent, provides services to a number of additional clients in the Mali mining industry, and it is through cooperation with one of these additional clients that the concessions were presented to and acquired by Bambara. Mohamed Niare is the sole shareholder of Bambara. Kodal has reviewed the process of acquisition of the concessions by Bambara and believes that the concessions were not available for Kodal to acquire directly and that the Agreement with Bambara represents an excellent opportunity for the Company to gain exclusive access to and the option to acquire the concessions on favourable terms for the benefit of the Company and its shareholders.

The concessions that are subject to the Agreement are the Mafele Ouest and Nkemene Ouest concessions (the "Concessions"). The Mafele Ouest concession was granted under arrêté (ministerial order in Mali) on 31 December 2018 and the Nkemene Ouest was granted under arrêté on 28 December 2018. The arrêtés 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 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). 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, issued at today's mid-market closing price;

· 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 VWAP (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.

All new ordinary shares issued under the Agreement are subject to a "lock-in" agreement whereby they cannot be sold or transferred for a period of 12 months from the date of the Agreement.

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.

Bougouni West

The Bougouni West project covers an area of 200km2 and is located approximately 25km to the west of Kodal's existing Bougouni Lithium project. The projects are connected by sealed bitumen road, and access throughout the Bougouni West project is good with local road and tracks available.

The Bougouni West project is located in the Bougouni-Sikasso region, and regional studies completed by CSA Global in 2008 identified high-grade lithium bearing pegmatites within the Bougouni-Sikasso region. The study was commissioned and funded by the World Bank as part of the SYSMIN economic development programme.

The Bougouni West project is located immediately adjacent to the Goulamina project owned by ASX listed Birimian Limited who have defined a pegmatite hosted Mineral Resource of 103Mt at 1.34% Li2O. The exploration undertaken by Kodal will focus on the potential extensions to the mineralised structures defined by Birimian's work as well as exploration for parallel and new mineralised structures within the project area. The Company intends to continue its systematic approach to exploration to rapidly explore the project area.

Previous exploration within the Bougouni West project is limited and field reconnaissance by Kodal geologists during a due diligence review is highlighting areas for exploration focus. Pegmatite occurrences were identified during a broad scale country-wide development mapping programme; however, the project is yet to benefit from systematic reconnaissance exploration or drilling targeting lithium pegmatites.

The Company will undertake detailed reconnaissance mapping to follow up known pegmatites and seek undiscovered pegmatite outcrops within the project. There are also a number of geophysical anomalies defined from existing datasets, which represent priority targets for on-the-ground follow up mapping and sampling.

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.

**ENDS**

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

About Kodal Minerals

Kodal Minerals' primary focus is on the rapid advancement of its flagship Bougouni Lithium Project in Southern Mali towards production. The recently completed Maiden JORC Resource Estimate placed the Bougouni Project in the top 15 hard rock lithium projects globally and was calculated using only three of the eight currently recognised prospects demonstrating the significant exploration upside potential remaining across the 450km2 project area. The Mineral Resource estimate for the Ngoualana, Sogola-Baoule and Boumou prospects are tabulated below. These mineral resources are reported in accordance with the JORC Code:

Notes: Mineral resources are reported using a 0.5%Li2O cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.

The Bougouni Project is located in an emerging lithium province that is already attracting the attention of investors and off-take partners interested in securing a long-term supply of lithium. With the support of its strategic investor and off-take partner Suay Chin International Pte, a Singapore-based lithium and chemical trader, Kodal Minerals is well funded to continue its ambitious development programme at Bougouni.

Further to this, Kodal Minerals is the manager of additional lithium and gold projects that are undergoing low cost exploration programmes in addition to JV funded gold properties in Cote d'Ivoire that offer potentially significant long-term value.