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Bougouni lithium project, Mali – update

Image of lithium ore

Photo by ©Bloomberg

29th March 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name of the Project
Bougouni lithium project.

Location
Southern Mali.

Project Owner/s
Gold and lithium miner Kodal Minerals.

Project Description
Bougouni’s mineral resource comprises three advanced prospects – Sogola-Baoulé, Ngoualana and Boumou.

The 2020 feasibility study proposes an openpit contract mining operation, and a conventional milling and flotation processing facility capable of treating two-million tonnes a year of ore, complete with asso­ciated infrastructure to mine and process about 16-million tonnes of pegmatite ore over an initial 8.5-year mine life.

Production will average 220 000 t/y of 6% spodu­mene concentrate. Over the life-of-mine the project is expected to produce 1.94-million tonnes of concentrate.

In September 2022, Kodal proposed the development of Bougouni based on the installation of a modular dense-media separation (DMS) plant to process material from the Ngoualana deposit that, owing to its coarse grain properties, delivers high DMS recoveries. Processing material from the Ngoualana deposit will feed one-million tonnes a year of lithium ore to a DMS processing plant using a conventional circuit to maximise spodumene recovery. The DMS option has a mine life of four years.

Future expansion of the project is expected to continue with the construction and commissioning of a down-stream flotation plant expected to be supported by using the DMS plant cash flows to exploit the resources at Sogola-Baoulé and Boumou, as well as longer-term exploration prospects.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated after-tax internal rate of return (IRR) of 91.2%, with a payback of 0.8 years.

The DMS option estimates a net present value, at a 7% discount rate, of $557.83-million and an IRR of 274%, with a payback of two months.

Capital Expenditure
The feasibility study reports capital expenditure (capex) at $154-million, plus contingency.

The DMS option has estimated capital costs of $64.8-million.

Planned Start/End Date
Not stated.

Latest Developments
Kodal Minerals has reported that its Bougouni lithium project is on track to start production in the fourth quarter of 2024, following the achievement of several key milestones in the first quarter.

In addition, the company has said that the Bougouni Stage 1 DMS circuit is fully financed with all permitting in place, including environmental and social permits, with Kodal’s community development plan also recently approved by Mali’s Environment Ministry.

On November 15, 2023, Kodal announced that it had received all funds pertaining to the funding transaction for $117.75-million agreed to between the company and Hainan Mining, comprising a $100-million investment from Hainan to acquire 51% of the Bougouni project company, KMUK, and a further $17.75-million received for the subscription for new ordinary shares in Kodal Minerals at 0.5p a share.

So far, the KMUK management team has established and completed the review of the project development plan, confirming the $65-million capex estimate for Bougouni lithium project Stage 1 using a DMS approach.

As such, the long-lead items of the DMS units and dual stream crushing modules have been ordered and work has started on the build.

Kodal has also signed contracts for the supply of the crushing circuit and DMS modules from experienced suppliers in China and expects these long-lead items to be available on site in time to maintain its expectation of first production in quarter four.

In addition, a mining contract has been finalised with a consortium comprising Malian mining contractor EGTF Mining and Auxin Mining Services Mali, with costs consistent with the feasibility study.

The mining contractor will mobilise to site in March and will start with site clearing and civil engineering works in early April along with other key site establishment activities.

The Mali Minister for Environment Professor Tiémoko Sangaré has endorsed the company’s development programme and development of the DMS processing site, after approving the updated environmental- and social-impact assessment for Bougouni project Phase 1 DMS in February.

The all-weather access roads to the Ngoualana openpit and DMS processing site are now complete, while negotiations with local community groups on land compensation are progressing.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Kodal Minerals, tel +44 20 3463 2260.

Edited by Creamer Media Reporter

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