Lithium and gold miner Kodal Minerals has received a $7-million deposit related to the funding package it has in place with Hainan Mining and Hainan’s UK-incorporated subsidiary Xinmao Investment.
The funders have committed to provide full financing for the development and start of production at the Bougouni lithium project, in Mali, and support a major exploration programme.
Since Hainan is an experienced mining group, it will help Kodal to advance the Bougouni project to production.
The remainder of the funding remains subject to regulatory approvals in China, as well as some approvals in Mali, since the deal between the companies involves a restructuring of Kodal’s existing subsidiary in Mali, which is to become a wholly-owned subsidiary of Kodal’s newly incorporated UK subsidiary, Kodal Mining UK.
Hainan and Kodal signed a conditional funding package of just under $118-million on January 19. The terms of the agreement include that Hainan will become a 51% shareholder in Kodal Mining UK.
Additionally, Hainan will subscribe to equity in Kodal for $17-million, which will see it become the largest shareholder of 14.8% in Kodal, particularly as existing shareholder Suay Chin International has not elected to exercise its contractual rights of maintaining its shareholding. Suay Chin’s shareholding will therefore dilute to 12.08%.
Meanwhile, Kodal has reverse circulation and diamond drilling underway at the Bougouni project, with all results pending. The engineering and development programme to fast-track Bougouni’s development is ongoing.