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  • Writer's pictureMark Watson-Mitchell

Kodal Minerals – drilling progress and very close to completing important Chinese funding

In an Update on its Bougouni Lithium Project Kodal Minerals (LON:KOD) has noted its progress in engineering development and that its drilling is in progress at its southern Mail-located prospects.

It has also advanced matters regarding its $117.75m funding package from China’s Hainan Mining, with a view to completion before the end of this month.

Bougouni Lithium Project

The group has stated that its Bougouni project is on track to be the first commercial lithium producer in Mali, West Africa.

It is expecting its first production in 2024, from a low capex DMS plant to be expanded through a flotation plant in the future, significantly increasing production.

The aim is producing spodumene concentrate suitable for use in electric vehicle batteries.

The financing package and offtake negotiations for 100% of production have been continuing.

The important Hainan Mining connection

In late-January this year it was reported that the Chinese controlled Hainan Mining, itself a subsidiary of Fosun International the Hong Kong listed mega-group, will be taking a 14.81% stake in Kodal Minerals and will own a 51% equity participation in its subsidiary Kodal Mining UK, which holds all the mining and exploration rights of the Bougouni Lithium Project.

Its core businesses are iron ore mining, processing and sales through its Shilu iron ore mine; oil and gas exploration, development, production and sales through its subsidiary Roc Oil Limited; and resource investment and financing.

Fosun International, which is the Shanghai-based multinational conglomerate holding company, has operations in over 16 countries and is one of the biggest groups in China.

Its interests cover technology, healthcare, real estate, steel, insurance, mining and other sectors.

Direct and controlling investments take in Club Med, Cirque du Soleil, Thomas Cook, Folli Follie, Wolverhampton Wanderers, Damiani, Jinhui Liquor, Salvini, MakeMyTrip, Gland Pharma and Meadowbrook Insurance amongst many others.

Analyst Opinion – Speculative Buy

Analyst Alexander Bedwany at Canaccord Genuity rates the group’s shares as a Buy, looking for 1.3p as his Target Price.

He considers that Bougouni is an attractive development, with the likelihood of near-term cash flow in 2024.

The shares have responded well to this news, rising nearly 10% this morning at 0.425p a share, which values the group at only £72.3m.


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