Kodal Minerals Plc, the mineral development and exploration company focused on its Bougouni Lithium Project ('Bougouni', the 'Bougouni Project' or the 'Project') in southern Mali, announces its unaudited interim results for the six months ended 30 September 2020.
· Mining Licence application proceeding through new Mali Transitional Government with all technical and compliance requirements completed by Kodal Minerals. Following grant of the Mining Licence the Bougouni Lithium Project will be fully permitted for development.
· Memorandum of Understanding ('MoU') entered into with Sinohydro Corporation Limited ('Sinohydro'), a specialist engineering, infrastructure, power developer and construction contractor, to work together to develop the Bougouni Lithium Project. The focus of the MoU is for Sinohydro to review the development proposed for the Project, review the financing requirements and assist in sourcing finance for the Project and finally to work with the Company to negotiate a mutually acceptable EPC contract for the development of the Project.
· Financing: The Company entered into two financing agreements with Riverfort Global Opportunities PCC Limited and YA II PN Ltd. An Equity Sharing agreement ('ESA') announced in April 2020 which concluded on 7 September with Kodal Minerals receiving total proceeds of £654,000 and reflecting a positive result for the Company compared with the £500,000 subscription entered into at the commencement of the ESA. The Company also notes that the ESA was concluded in under six months. And secondly, an unsecured Convertible Loan Note facility for US$1.5m drawn down in two tranches of US$750,000 each in July and October 2020.
· Company well-funded to continue Bougouni Lithium Project development plan and gold exploration strategy with gold exploration activity planned for Cote d'Ivoire to commence in November 2020.
Bernard Aylward, CEO of Kodal Minerals, said: "The six months ending 30 September have been a busy time for the Company in spite of the impact of the COVID-19 pandemic, associated travel restrictions and the political changes in Mali. Kodal has continued to focus on its flagship Bougouni Lithium Project and the progress of its Mining Licence application. Our communication with the government authorities has continued and we have received confirmation that our application is proceeding. As previously announced, all technical and compliance requirements have been completed by Kodal to the satisfaction of the officials and the application is now proceeding through the official channels with our expectation for it to be recommended for grant of a Mining Licence.
"To continue the development of the Bougouni Lithium Project, the Company has continued with the review of engineering and processing requirements for the Project. Our MoU with Sinohydro is a significant development as it provides a third party review of the Bougouni Lithium Project and Sinohydro has a strong track record of developing and working on engineering projects in Mali and elsewhere in Africa. The experience of Sinohydro gives us great confidence that we have teamed up with a group that will bring many positive benefits to the Bougouni Project and help Kodal Minerals to progress the design, financing and construction process efficiently and cost effectively. I am pleased to report that following the translation of all appropriate documentation, Sinohydro has commenced the study of the proposed development plan and has initiated a review of financing and potential partners for us and we look forward to providing further updates in due course.
"The Company has been able to secure funding to continue its exploration and development programme, with the initial ESA performing successfully for the Company, and the subsequent Convertible Loan Note agreement providing further immediate funding to support the Company's activities.
"The focus of the Company over the next six months will be on working with the Government of Mali to secure the Mining Licence for the Bougouni Lithium Project and continuing to advance the development of the Project. In addition, the Company will continue field work on its gold assets with work planned to commence in late November in Cote d'Ivoire at the Dabakala project. The Company is maintaining its suite of gold assets in Mali and Cote d'Ivoire, and is continuing to assess opportunities to generate value from them for the Company."
The year of 2020 has been a challenging one for all with the COVID-19 pandemic impact being felt world-wide. Further challenges arose during this period with political unrest in Mali, resulting in the removal of the Government and the establishment of a Transition Government with a newly appointed President, Prime Minister and Ministry. However, the recent announcements of potential successful COVID-19 vaccine trials are a very welcome development and augur well for a more stable and predictable 2021 to allow Kodal Minerals to continue its ambitious development plan for the Bougouni Lithium Project. The Company will have a fully permitted Bougouni Lithium Project following the grant of the Mining Licence and we look forward to moving to the next stage of project development.
In the 6-month period ended 30 September 2020, the Group has recorded a loss of £255,000 compared to losses of £339,000 for the 6 months to 30 September 2019 and £630,000 for the year to 31 March 2020.
Cash balances as at 30 September 2020 were £870,000 compared to £315,000 at 30 September 2019 and £33,000 at 31 March 2020. Cash as at 31 October 2020 was £1,316,000.
I am pleased to report that Kodal is in a strong position as it is well funded, has confirmed security of tenure over its projects and is continuing to attract strong interest in its flagship Bougouni Lithium Project as well as its suite of gold assets that are well located within the gold bearing Birimian sequence of West Africa.
The Company is well supported by our major shareholder and off-take partner, Suay Chin, and we continue to develop new relationships that will improve our options for financing and developing the Bougouni Lithium Project in the future. The MoU with Sinohydro is progressing well and communication between the technical teams is highlighting the fundamental value and potential of the Project. The Company maintains its confidence in the future of the lithium market and recognises the increasing support of various governments to provide incentives to accelerate the move towards the electric battery future. Kodal is well positioned to take advantage of the expected increase in demand for battery metals, with lithium being an irreplaceable part of this future.