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"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

16 December 2021

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

Interim Results

Kodal Minerals, the mineral exploration and development company, announces its unaudited interim results for the six months ended 30 September 2021 and provides a review of recent activities.

Overview:

· Significant progress made across entire exploration and development portfolio as Kodal advances its key lithium and gold projects in West Africa

Bougouni Lithium Project

· Mining Licence granted in November 2021 covering the proposed open-pit mining and processing operation at Bougouni - the project is now fully permitted for development and construction. 

· Immediate commencement of a programme of work in November 2021 to update the Feasibility Study announced in January 2020 ahead of securing funding for mine development and construction. The programme has a six-month time estimate and will focus on:

o Metallurgical test work for variability testing and confirmation of process flowsheet, investigating the potential for increased metallurgical recoveries;

o Completion of geotechnical and hydrogeological reviews for open pit and the tailings dam;

o Update and finalisation of capital cost estimates and operating costs for the proposed development; and

o Community development and stakeholder engagement activities at Bougouni.

· Acquisition of the retained 10% interest in Bougouni concessions from original owners allowing Kodal to further explore development and financing opportunities as the 100% owner.

Nielle Gold Project - Cȏte d'Ivoire

· Initial reverse circulation ("RC") drilling programme completed consisting of a total of 12 drill holes for 1,285m.

· These intersections confirm the extent and high-grade nature of the mineralisation at Nielle and will be used to focus follow-up drilling to target definition of high-grade zones.

· Gold mineralisation is associated with quartz-carbonate-sulphide mineralisation and remains open along strike and at depth.

· Final assay results confirm high grade mineralised zones with grades up to 38.5g/t gold, and intersections include:

o 13m at 5.07g/t gold from 12m in drill hole NLRC035*

- including 3m at 16.33g/t gold from 13m.

o 12m at 3.14g/t gold from 21m in drill hole NLRC038

- including 2m at 10.79g/t gold from 27m

o 5m at 15.42g/t gold from 7m in drill hole NLRC032

- including 2m at 31.54g/t gold from 8m

o 9m at 4.33g/t gold from 86m in drill hole NLRC038

- including 2m at 16.88g/t gold from 88m

(*Note NLRC035 interval 11m to 12m unable for re-split sampling and not included in calculation)

Fatou Project - Mali

· Initial RC drilling programme consisting of 11 RC drill holes for 1,242m completed with initial programme focussed on the northern Fatou area where historic NI43-101 resource estimate had previously been completed around an area of significant artisanal workings.

· Kodal is seeking to validate the width and tenor of mineralisation in this area and drilling has indicated zones of sulphide mineralisation as well as highlighting extensions of artisanal workings.

· All samples have been dispatched to laboratory for analysis and results are expected in January 2022.

Kodal has maintained the tenure of all other gold project in Mali and Cȏte d'Ivoire in good standing and continues to evaluate exploration programmes to advance these projects.

Bernard Aylward, CEO of Kodal Minerals, said: "The six months ending 30 September 2021 and the subsequent weeks continued a very busy period for the Company and we have achieved important milestones that support the Company's ambitions for the development of the Bougouni Lithium Project and the advancement of our gold projects.

"The granting of the mining licence for the Bougouni Project finalises the permitting required for the commencement of development, construction and operation of this mine. This has come at a very opportune time as we continue to see an exponential increase in lithium demand and strong sentiment for the lithium spodumene market, and the lithium-ion battery market in general. Kodal notes the increasing demand for, and price of, the spodumene concentrate it intends to produce and notes that the current market price exceeding US$2,300 per tonne of concentrate compares very favourably with the price of US$680 per tonne used as the initial price in our 2020 Feasibility Study.

"Our activities at Bougouni continue to focus on the community and environmental aspects of our development activity in the region and are building on our strong relationships as we move to finalise community development and compensation packages as part of our mine development. In addition, we have been undertaking a review of our existing Feasibility Study to upgrade costs and estimates to reflect current expectations and best practices. This work has included a review of our proposed treatment plant plans undertaken with a major Chinese consulting and construction group, to update our original capital estimates and look to improve our flowsheet and metallurgical recoveries. Results of this important work are expected by the end of January 2022.

"Kodal's is active on multiple gold exploration projects across southern Mali and Northern Cȏte d'Ivoire where the Company is continuing to undertake drilling programmes with the aim of proving up what we believe will be a very significant global resource inventory across our gold assets.

"At the Nielle project the shallow, high-grade gold mineralisation from our initial drilling programme is very encouraging. The extent of the shallow-high grade gold mineralisation up to 38.5g/t gold will be important to determine as well as continuing to extend the depth of the gold mineralised structures. Exploration of these mineralised systems throughout West Africa is continuing to highlight the importance of the controls on the high-grade gold mineralised shoots, and our next phase of drilling will also attempt to define the controls and possible plunge directions of the high-grade zones.

"At the Fatou project we have recently completed our initial drilling programme. The initial target area has widespread artisanal workings and the historic drilling has not been able to test fully the extent of the gold mineralised zone. All our samples have been dispatched to the laboratory and we look forward to reporting the assay results as they are expected to be received in January 2022."

Chairman's Statement

I am pleased to report that Kodal is in a strong strategic position and its exposure to the buoyant lithium market as well as its gold projects augurs well for the continued development of the Company. The lithium market has experienced strong price rises over the course of the 2021 year and this rise is driven both by a clear supply deficit as well as a major increase in the battery market and in particular the uptake of electric vehicles ("EVs").

In the 6-month period ended 30 September 2021, the Group has recorded a loss of £373,000 compared to losses of £255,000 for the 6 months to 30 September 2020 and £623,000 for the year to 31 March 2021.

Cash balances as at 30 September 2021 were £3,085,000 compared to £870,000 at 30 September 2020 and £2,432,000 at 31 March 2021. Cash as at 30 November 2021 was £1,584,000 with the funds spent in the six month period including £880,000 on the acquisition of the minority interests in the Bougouni Project and a further £958,000 spent on exploration and development activities at the Company's projects.

Kodal has an extensive development and exploration programme planned for the Bougouni Project as well as the gold exploration projects. The Bougouni Project is the flagship project for the Company and we anticipate completing our review and update of the Feasibility study, to reflect current pricing as well as potential cost increases from the 2019 base, by the end of January 2022. The Company will also focus on potential funding of the development of Bougouni with discussions ongoing with parties looking to secure a position in the lithium market where it is becoming clear that advanced, near development projects are the focus of corporate activity. The Company will maintain the exploration drilling at the gold projects with the aim of defining new mineral resources that will demonstrate the value of the gold portfolio.

I look forward to reporting on our progress in the Company's Annual Report for the year ending 31 March 2022.

Robert Wooldridge

Non-Executive Chairman

Contact details:

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

KODAL MINERALS PLC

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

KODAL MINERALS PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2021

KODAL MINERALS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

KODAL MINERALS PLC

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

KODAL MINERALS PLC

NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

General information

Kodal Minerals plc is a public limited company incorporated and domiciled in England & Wales. The Company's shares are publicly traded on the AIM market of the London stock exchange. Kodal Minerals Plc and its subsidiaries are involved in the exploration and evaluation of mineral resources in West Africa.

Basis of preparation

These unaudited condensed consolidated interim financial statements for the six months ended 30 September 2021 were approved by the board and authorised for issue on 15 December 2021.

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the year ended 31 March 2021 have been applied in the preparation of these condensed consolidated interim financial statements. These interim financial statements have been prepared in accordance with the historical cost convention and in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 that are expected to be applicable to the consolidated financial statements for the year ending 31 March 2022 and on the basis of the accounting policies expected to be used in those financial statements.

The figures for the six months ended 30 September 2021 and 30 September 2020 are unaudited and do not constitute full accounts. The comparative figures for the year ended 31 March 2021 are taken from the 2021 audited accounts, which are available on the Group's website, and have been delivered to the Registrar of Companies, and do not constitute full accounts.

The Group has not earned revenue during the period to 30 September 2021 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new shares.

The directors have prepared cash flow forecasts for the next 12 months. The forecast includes the costs of further refining the feasibility study at the Bougouni Lithium Project, additional targeted exploration of some of the company's gold assets, and the ongoing overheads of the Group. The forecast shows that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least 12 months from the date of the approval of these interim results. Accordingly, the interims have been prepared on a going concern basis. 

KODAL MINERALS PLC

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

1. SEGMENTAL REPORTING

The operations and assets of the Group are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. The parent Company acts as a holding company. At 30 September 2021, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the period.

2. OPERATING LOSS

 The operating loss before tax is stated after charging:

3. LOSS PER SHARE

Basic loss per share is calculated by dividing the loss for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period.

The following reflects the loss and share data used in the basic EPS computations:

Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Options in issue are not considered diluting to the earnings per share as the Group is currently loss making. Diluted loss per share is therefore the same as the basic loss per share.

4. SHARE BASED PAYMENTS

The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

A share based payment charge of £124,781 for the period to 30 September 2021 (6 months to 30 September 2019: £67,894, year to 31 March 2021: £77,979) has been recognised in the profit and loss in relation to these options and warrants.

The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were: 

On 27 August 2021, Performance Share Rights of up to 175,000,000 shares were awarded to Bernard Aylward (CEO) and Mohamed Niare (Country Manager, Mali). The Performance Share Rights carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Project and which are expected to realise significant value for shareholders. Subject to the vesting conditions being satisfied, the holders of the Performance Share Rights may call for the applicable number shares to be issued to them at any time within five years of the vesting condition being met and upon payment by them of the nominal value for the shares.

On 27 August 2021, options over 45,000,000 shares were issued to Robert Wooldridge and Qingtao Zeng, exerciseable in tranches up to the 7th anniversary of the date of issue.

5. TAXATION

There is no taxation charge for the period to 30 September 2021 (6 months to 30 September 2020: £nil, year to 31 March 2021: £nil) as the group continues to incur losses.

No deferred tax asset has been recognised in respect of losses as the timing of their utilisation is uncertain at this stage.

6. INTANGIBLE ASSETS

7. PROPERTY, PLANT AND EQUIPMENT

8. SUBSIDIARY ENTITIES

The consolidated financial statements include the following subsidiary companies:

9. ORDINARY SHARES

Allotted, issued and fully paid:

Share issue costs have been allocated against the Share Premium account.

Notes:

a) On 15 October 2020, the Investors elected to convert a total amount of $102,352.31 (equivalent to £79,271.86), made up of a principal amount of US$100,004.40 and accrued interest of $2,347.91, into 125,034,486 ordinary shares at a price of 0.06340 pence per share.

b) On 2 November 2020, the Investors elected to convert a total amount of $70,358.92 (equivalent to £53,930.11), made up of a principal amount of $70,000.00 and accrued interest of $358.92, into 85,063,264 ordinary shares at a price of 0.06340 pence per share.

c) On 15 December 2020, the Investors elected to convert a total amount of $101,160.41 (equivalent to £75,192.53), made up of a principal amount of $100,000.00 and accrued interest of $1,160.41, into 118,600,205 ordinary shares at a price of 0.06340 pence per share.

d) On 5 January 2021, the Investors elected to convert a total amount of $150,809.59 (equivalent to £111,704.66), made up of a principal amount of $150,000.00 and accrued interest of $809.59, into 176,190,315 ordinary shares at a price of 0.06340 pence per share.

e) On 8 January 2021, the Investors elected to convert a total amount of $300,242.88 (equivalent to £220,048.01), made up of a principal amount of $300,000.00 and accrued interest of $242.88, into 347,078,879 ordinary shares at a price of 0.06340 pence per share.

f) On 19 February 2021, the Investors elected to convert a total amount of $169,384.70 (equivalent to £122,244.94), made up of a principal amount of $150,000.00 and accrued interest of $19,384.70, into 153,379,428 ordinary shares at a price of 0.079701 pence per share.

g) On 17 March 2021, the Investors elected to convert a total amount of $150,971.51 (equivalent to £108,155.99), made up of a principal amount of $150,000 and accrued interest of $971.51, into 128,080,136 ordinary shares at a price of 0.084444 pence per share.

h) On 22 March 2021, the Investors elected to convert a total amount of $250,337.33 (equivalent to £180,443.15), made up of a principal amount of $250,000 and accrued interest of $337.33, into 210,896,619 ordinary shares at a price of 0.08556 pence per share.

i) On 22 March 2021, the Investors elected to convert a total amount of US$200,000 (equivalent to £144,160), made up of a principal amount of US$200,000 and no accrued interest, into 168,489,949 ordinary shares at a price of 0.08556 pence per share.

j) On 25 March 2021, a total of 2,800,000,000 shares were issued in a placing at a price of 0.125 pence per share. Share issue expenses of £200,925 were offset against the share premium account.

k) On 25 March 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.

l) On 25 March 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.

m) On 18 May 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.

n) On 18 May 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.

10. RELATED PARTY TRANSACTIONS

Transactions with related parties

Robert Wooldridge, a Director, is a member of SP Angel Corporate Finance LLP ("SP Angel") which acts as financial advisor and broker to the Company. During the six months to 30 September 2021, SP Angel received fees of £15,000 (6 months to 30 September 2020: £21,276, year to 31 March 2021: £240,381). The balance due to SP Angel at 30 September 2021 was £nil (30 September 2020: £nil, 31 March 2021: £nil).

Matlock Geological Services Pty Ltd ("Matlock"), a company wholly owned by Bernard Aylward, a Director, provided consultancy services to the Group during the six months to 30 September 2021 and received fees of £48,563 (6 months to 30 September 2020: £25,468, year to 31 March 2021: £76,094). The balance due to Matlock at 30 September 2021 was £nil (30 September 2020: £nil, 31 March 2021: £nil).

Geosmart Consulting Pty Ltd ("Geosmart"), a company wholly owned by Qingtao Zeng, a Director, provided consultancy services to the Group during the six months to 30 September 2021 and received fees of £7,165 (6 months to 30 September 2020: £5,548, year to 31 March 2021: £10,595). The balance due to Geosmart at 30 September 2021 was £nil (30 September 2020: £nil, 31 March 2021: £nil).

11. CONTROL

No one party is identified as controlling the Group.

12. EVENTS AFTER THE REPORTING PERIOD

On 3 November 2021 the Company announced that it had acquired the minority shareholdings of the original vendor parties of the Bougouni Lithium Project. These acquisitions result in Kodal having 100% interest in all concessions of the Bougouni Lithium Project with the concessions all held in the name of Kodal's Malian subsidiary companies.

On 4 November 2021 the Company announced that it had issued 19,583,212 ordinary shares at a price of 0.3319p per share pursuant to the Company's agreement with Bambara Resources SARL which gives the Company exclusive rights to explore and acquire an 80 per cent. interest in two concessions in Southern Mali, Mafele Ouest and Nkemene Ouest.

On 8 November 2021 the Company repaid funds of £245,627 (US$330,00) to Riverfort Global Opportunities. Funds had previously been advanced to Kodal in January 2021 to support the Fatou acquisition and were part of the proposed agreement between Kodal and Riverfort Global Opportunities to form a Gold Exploration Joint Venture. This agreement did not proceed, and the advanced funds repaid as agreed.

On 8 November 2021 the Company announced that it had been granted a Mining Licence for the Bougouni Lithium Project.