Kodal Minerals has announced a conditional prepayment of US$3.5 million from Hainan Mining Co. Limited and its subsidiary Xinmao Investment Co. Limited. The prepayment forms part of the funding package for Kodal’s Bougouni Lithium Project in Mali which was announced in January 2023.
Kodal Minerals shares were 22% higher at the time of writing as investors cheered progress in the deal after weeks of inaction.
The prepayment provides Kodal with immediate funds to advance the Bougouni Lithium Project and for general working capital. Investors should note the prepayment is repayable or convertible into Kodal shares if the full funding package does not proceed.
To meet conditions for the funding package, Kodal is establishing a new company in Mali called Les Mines de Lithium de Bougouni SA which will own the Bougouni mining licence. Kodal has started the process of transferring the mining licence to this new entity but progress has been slow and Kodal Mineral’s share price has suffered as a result.
Completing the mining licence transfer to the new Mali company is a key condition for the full funding package to proceed. Kodal investors will hope the company can satisfy these conditions to avoid the messy situation other AIM-listed lithium companies are experiencing after accepting prepayment amounts.
Bernard Aylward, CEO of Kodal Minerals, commented:
“We are very pleased to have received the support of the Hainan Group with the Prepayment for some of the subscription agreement, allowing us to continue to advance the Bougouni Lithium project while we work towards completion of the Funding Package.
“This Prepayment does not add further dilution to our shareholders and confirms the confidence of both parties in being able to finalise the Funding Package. Kodal and our partners the Hainan Group continue to work together to progress plans for the development of the Bougouni Lithium Project and are working hard to finalise this transaction to allow construction to commence and the mine to rapidly move to production.”