The Kodal Minerals PLC (LON: KOD) share price surged 54% after securing funding worth US$117.75 million for its Boughuoni Lithium project in Mali. The funds were secured from Hainan Mining Co. Limited, a subsidiary of Chinese conglomerate Fosun International Limited.
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Investors cheered the news after Hainan agreed to purchase shares worth US$17.75 million priced at 0.5p each, representing a 100% premium to Kodal’s closing share price over the past 10 days as measured by the VWAP indicator.
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In addition, Kodal has registered a new subsidiary in the UK known as Kodal Mining UK Limited (KMUK), which will be responsible for running the Boughuoni project. Hainan has agreed to invest $100 million in KMUK to acquire a 51% majority stake to be used in constructing the Boughuoni mine.
KMUK will be fully funded to spend US$65 million, the projected capital cost of the mine's Dense Media Separation (DMS) plant. The remaining funds will be used in expansion activities to extend the mine’s production beyond the initial four-year life span and to expand the JROC-compliant mineral resource estimate from the current 21 Mt @1.11% Li2O.
Kodal Minerals revealed that the US$17.75 million raised from the share issuance would be used to advance its portfolio of gold-producing assets in Mali and Cote d'Ivoire and to assess new exploration and development opportunities in West Africa.
Bernard Aylward, CEO of Kodal Minerals, commented: “This is a great outcome for Kodal following a competitive and complex process to ensure we received appropriate recognition for the underlying value of this asset. We are very pleased to welcome the Hainan Group as investors in Kodal and partners in developing the Bougouni Lithium Project… The level of funding will allow us to fully fund the dense media separation plant with mining planned to commence at the high-grade Ngoualana deposit, as well as to support major drilling and exploration campaigns to discover and define additional lithium mineralisation to seek to increase the life of the mining operation at Bougouni.”
*This is not investment advice.
The Kodal Minerals’ share price.
The Kodal Minerals share price surged 54% to trade at 0.365p, from Wednesday’s closing price of 0.237p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.