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

27 June 2017

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

Metallurgical Testwork Confirms High-Grade Spodumene Concentrate

at Bougouni Lithium Project, Mali

Kodal Minerals plc, the mineral exploration and development company focussed on West Africa, is pleased to announce the results of the initial metallurgical testwork which confirm the ability to produce a high-grade spodumene concentrate from the pegmatite hosted lithium mineralisation at the Company's Bougouni lithium project in Southern Mali ("Bougouni" or the "Bougouni Project").

Highlights

· Metallurgical recoveries range from 80% to 87% for initial flotation testwork;

· Spodumene concentrate grades ranging between 5.5% and 6.7% Li2O achieved from multiple batch testing - chemical grade spodumene concentrate (typically containing 6% Li2O) is sold for use in battery manufacturing and other industrial applications;

· Mineralisation is recognised as high-grade and of suitable quality for producing lithium carbonate, with low level potassium and sodium content and with moderate iron content;

· Initial testwork used flotation tests only, as samples comprised reverse circulation drill chips which contain a significant portion of very fine material not suitable for other techniques;

· Further metallurgical test work is planned utilising diamond drill core to seek to further enhance overall recoveries through a comprehensive process utilising gravity separation as well as flotation;

· Metallurgical testing completed at the Shandong Ruifu Lithium Co Ltd ("Shandong Ruifu") which operates a lithium carbonate and lithium hydroxide production plant in China:

o Shandong Ruifu has a close relationship with Kodal's major shareholder Suay Chin International Pte Ltd and is looking to secure supply of quality lithium bearing mineralisation following a recently completed upgrade to its processing plant

Bernard Aylward, CEO of Kodal Minerals, said: "After a series of extremely encouraging drill results from our Ngoualana prospect and surrounding target areas, this initial metallurgical testwork reinforces our confidence that the Bougouni Project has the potential to become a high quality spodumene producer worthy of significant commercial interest.

"These results confirm the ability of the pegmatite hosted mineralisation at Bougouni to generate a high-grade spodumene concentrate with low impurities that is a quality product for future lithium carbonate production. This is an important criterion for us to demonstrate, particularly in light of recent increases in the price received for this quality of high-grade spodumene concentrate.

"The initial testwork was completed on RC drill chips collected from the first phase of drilling at the Ngoualana prospect. Whilst further test work will be needed using diamond drill core in order to determine the optimal processing route, this initial work has demonstrated the ability to have recoveries in excess of 80% from flotation work to produce commercial grade spodumene concentrate. With this in mind I look forward to providing further updates on the metallurgical programme in due course." 

Further Information

Bougouni Lithium Project

The Bougouni Project consists of two concessions, the Kolassokoro and Madina concessions, which cover a contiguous area of 500km2. The project area is located approximately 180km south of Bamako, the capital of Mali, with excellent access to the project via sealed road from Bamako. Kodal has been exploring the concessions since September 2016 and has completed a series of geological reconnaissance, rock chip and trench sampling, geophysical review, reverse circulation ("RC") drilling and recently diamond core drilling. The exploration activities continue to enhance the project, with numerous exploration targets developed and drill results confirming high-grade mineralisation.

Metallurgical Testwork

This metallurgical testing was completed at the Shandong Ruifu plant in the Tai'An region of the Shandong province of China. Shandong Ruifu has a close relationship with Kodal's major shareholder Suay Chin International Pte Ltd and operates a lithium carbonate and lithium hydroxide production plant in the Shandong province of China. Shandong Ruifu recently completed an upgrade to the processing plant and is looking to secure supply of quality lithium bearing mineralisation.

These initial metallurgical samples were collected from the first RC drilling campaign at the Ngoualana prospect. A review of the completed drilling outlined key intersections that were composited to form a representative sample of the mineralisation. A total sample of 234kg was dispatched to China for the metallurgical test work.

A summary report of the processing work has been received and details the results of a batch of flotation test work completed on 30 trials of 1kg sample each.

The initial analysis of the test sample confirmed high grade lithium mineralisation with low impurities, as tabled below:

Comments returned from the site metallurgists confirm that the low potassium and sodium along with moderate iron levels indicate that the Ngoualana lithium mineralisation is of a good quality for producing lithium carbonate.

The report also confirms that the spodumene concentrate produced by the flotation process generates a high-grade concentrate with recoveries exceeding 80% and reported up to 87% for this phase. It is noted that the presence of significant fine material in the sample has meant the full process of gravity separation and flotation could not be tested and this impacts on the recoveries. A further programme of testing on diamond core samples will be undertaken and this will demonstrate the full process route and is expected to improve the already good recoveries.

The average grade of spodumene concentrate and range of recoveries is tabled below:

Test work Procedure:

The metallurgical testing was completed at the Shandong Riufu laboratory on site.

Initially the samples are crushed by a ball mill crusher to generate a sample size of 70% passing a 200 mesh size.

The samples are then filtered to remove the very fine material or "mud". The samples are then combined with reagents and water and temperature maintained above 10 degrees centigrade. The processing time for the coarse fraction is approximately 50 minutes and for the fine-grained material is completed in two stages of 15 minutes and 10 minutes each. The process and reagents are intellectual property owned by Shandong Riufu.

The sample is then dried to produce the spodumene concentrate. 

As outlined above, the sample produced from the RC drilling has a significant component of fine grained material from the RC drilling procedure which affects the flotation testwork and has a negative impact on the recovery of lithium.

Future testwork will be completed on diamond drill core. In addition a bulk sample is currently under review for the Bougouni project and this will provide very important information regarding the final processing route and plant required on site.

Ngoualana Prospect

The metallurgical testing was completed on a composite sample collected from the initial RC drilling at the Ngoualana prospect. The composite sample was prepared by riffle splitting known mineralised drill intersections to create a bulk sample of 234kg for the initial test work.

The Ngoualana prospect consists of one wide main vein that is continuous throughout the prospect, and multiple parallel and subsidiary pegmatite veins. Drilling is continuing to intersect pegmatite veins that have no outcropping evidence and the potential exists for additional veins to be delineated. The pegmatite veins are high-grade, with assays up to 3.12% Li2O returned, and review of the assay results indicates consistent mineralisation throughout the pegmatite veins. The coarse spodumene minerals within the pegmatite observed in surface outcrop is confirmed in drilling, and several intersections appear to have spodumene content in excess of 30%. The pegmatite veins are hosted in a sequence of metasedimentary rocks with minor granodiorite intrusions and quartz veins identified.

Lithium

The pegmatite veins intersected by drilling at Bougouni are spodumene rich (20-30% spodumene content) low mica pegmatite bodies with spodumene being the main lithium bearing mineral in most hard rock lithium deposits. The high-grade lithium mineralisation returned in the assays compares favourably with other hard rock spodumene mineralised pegmatite veins under development around the world where grades range from 1.1% Li2O through to 1.4% Li2O. The intersections reported in this announcement have been estimated using a 1.0% Li2O lower-cut, and have consistently high-grade mineralisation throughout the pegmatite bodies.

An initial review of the development process for the Bougouni lithium pegmatite bodies was completed as part of the World Bank sponsored SYSMIN study completed by CSA Global in 2008. This report indicated that a process of mine site crushing, screening and dense media separation techniques was able to produce a good quality spodumene concentrate, with grade over 6% Li2O. Chemical grade spodumene concentrate (typically containing 6% Li2O) is sold for use in battery manufacturing and other industrial applications. Recent lithium concentrate (grade 6%) prices are approximately US$600/t.

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: