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Kodal Minerals Shares Are Down 47% From Their March Highs, Is the Firm Still a Buy?

Updated: 31 Mar 2021

Shares of Kodal Minerals PLC (LON: KOD) are down 47% from their mid-March highs after erasing all the gains made during a 2-day parabolic rally as expected.

We have mentioned previously that a massive decline usually follows parabolic rallies; hence, Kodal’s decline was not new or unexpected.

Traders who bought at the highs are currently sitting on losses, but the lithium mining company’s fundamentals have not changed.

Kodal Minerals is currently waiting for its mining licence application for its flagship Boughuni lithium mine in Mali, which will allow the company to start exploiting the resource and hopefully generating revenues in the process.

In a recent interview, Kodal’s CEO Bernard Aylward confirmed that they were in constant communication with the Malian government and that the company had submitted all the necessary documentation to be granted the mining license.

However, investors are worried about the long delay in the approval of Kodal’s mining license that could mean the Malian government may be planning to reject the application.

The company also has other gold projects that it has been developing and is looking for partners who can advance the projects to the point where they are profitable such as an earn-in partner.

Kodal Minerals is well-positioned to capitalise on the rising lithium prices as demand for electric batteries surges over the next few years. However, a lot is still riding on getting the Boughuni project licence.

The company’s CEO seems confident that they will be granted the Boughuni license, which could trigger a massive rally in Kodal’s share price. In the meantime, I’m still bullish on the company long-term as we patiently wait for the Boughuni project licence approval.

Kodal Minerals share price.

IG chart of Kodal Minerals share price 31-03-2021

Kodal Minerals shares are down 47% from their mid-March high of 0.233p to their current trading price of 0.123p. Is the company still a buy?

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