Leo Lithium eyeing early cashflows from Mali

21st February 2023 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Lithium developer Leo Lithium is hoping for some early cash generation from its Goulamina lithium project, in Mali, with the mining and sale of direct shipping ore (DSO) ahead of the start of commissioning in the second quarter of 2024.

Leo MD Simon Hay said on Tuesday that the company was targeting two 30 000 t shipments of DSO in the third or fourth quarter of 2023, depending on the availability and appointment of contractors to undertake the mining operations.

The DSO product was likely to go towards joint venture partner Ganfeng, although a sales agreement for the material was not in place yet, Hay said.

He told journalists that in addition to early cash flows, the DSO operation would deliver a number of benefits to Leo Lithium in its development of the Goulamina project.

“There are other benefits of doing a DSO that I really like from a project perspective; you get to test the orebody, you get to do a drill and blast it early, you get to see how it crushes. And most importantly for us, we get to commission our logistics channel as well, which is quite long.”

Construction of the Goulamina is currently on track, with some 45% of the $255-million project capital having been committed, with the majority of the spend to take place this year.

The Stage 1, 2.3-million-tonne-a-year development will produce 506 000 t/y of spodumene concentrate a year, which will go entirely to Ganfeng under an offtake agreement. The Stage 2 development would see an additional 325 000 t/y of spodumene added to the production portfolio, for a further investment of $70-million.

Hay said on Tuesday that studies for the Stage 2 development would be commissioned this year, with commissioning of the Stage 2 project to take place 12 to 18 months after the start of the Stage 1 operations.

Meanwhile, Hay noted that discussions were under way with Ganfeng over the potential downstream processing of the Stage 2 operation, and the potential introduction of a third party in this process.

“They are early-stage discussions, but we aim to progress those discussions this year, to the state that we can talk about something concrete, and potentially jointly converting it.”

To date, Goulamina is tracking on budget, with Hay noting that the tight labour markets experienced in other parts of the world were not as prevalent in Mali. While it was still too early to speculate, Hay noted that operating expenditure might be higher, however, given the increased costs of diesel and explosives prices.

While an export route to the Port of Abidjan, in Côte d’Ivoire, is currently tapped as the likely point of shipments for the Goulamina product, with a ten-year port agreement in place covering a minimum 250 000 t/y of concentrate storage and export, Hay noted that Leo Lithium was also considering securing a second port access agreement, either at San Pedro, also in Côte d’Ivoire, or at Dakar, in Senegal, in order to mitigate geopolitical risks.