Kodal Minerals (LON: KOD) shares plunged 15.7% after the lithium mining company revealed that it had raised £3 million via an oversubscribed discounted share placement. It sold over 1 billion shares at 0.28p each.
The junior miner said it would use the funds raised to progress its Bougouni Lithium mine in Mali into the production stage, given the rising global demand for lithium. The company told investors that rising demand for its spodumene product had driven prices up to US$3,000 per tonne compared to the US$680 per tonne used by the firm in its 2020 feasibility study.
The company noted significant demand for its shares on the markets. Its share placement and subscription were oversubscribed, meaning that the company had to turn down some offers. Still, KOD shares fell to account for the discount offered to the new investors compared to the shares’ last closing price.
The funds raised will be used to complete the metallurgical tests on the Bougouni licence area to confirm the percentage of Spodumene recovered from the mine. The current estimates indicate that the firm can recover up to 71% of the spodumene, but other factors could raise the recovery percentage to 80%.
The company will also complete the design of the processing plant and associated infrastructure needed to start production activities. The miner will also finalise the geotechnical test work to optimise the open pit design and complete it along with resource infill and extension drilling.
Bernard Aylward, Kodal Minerals CEO, commented: “This oversubscribed placing demonstrates the ongoing support of our Bougouni Lithium project and the opportunity to move into the development and construction phase… The funds raised in the placing will be used to complete the Engineering programme and the important Environmental, Social and Community Engagement programmes. In addition, the Company will undertake infill and extension drilling of the defined resource areas to prepare for a minerals resource review and potential increase and upgrade of the current resource base.”
*This is not investment advice. Always do your due diligence before making investment decisions.
Kodal Minerals share price.
Kodal Minerals shares plunged 15.68% to trade at 0.285p, falling from Tuesday’s closing price of 0.338p.
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