Kodal Minerals Plc

Kodal Minerals Plc is a junior lithium development company headquartered in London, United Kingdom, operating primarily in Africa. The company's portfolio consists of 3 projects, comprising 1 development and 2 advanced exploration projects. Key assets include Bougouni. The organization is transitioning from an exploration-focused entity to a developer and producer of spodumene concentrate. Its business model is centered on a fully funded development project advanced through a strategic partnership with an industrial operating partner. This collaboration provides the necessary capital and operational expertise for construction and commissioning. The operational approach utilizes a dense media separation (DMS) processing plant, with key components manufactured by specialist engineering groups. The company's structure allows it to retain significant influence over the primary asset's development and day-to-day decision-making despite holding a non-controlling interest. This arrangement has also provided the entity with sufficient capital to actively seek and evaluate additional investment opportunities within its sector of focus. The development plan is based on a 2020 feasibility study, with capital expenditure estimates remaining consistent due to a conservative planning approach. The operational design includes a 5MW diesel power plant with built-in capacity to integrate complementary solar power in the future, reflecting a phased approach to energy infrastructure.

The near-term strategy centers on bringing the flagship project into production by the end of 2024, transitioning the business from a developer to a producer. This is being executed via a partnership that secured full funding for construction and development. A core strategic objective is to become a focused explorer and developer participating in the global electric vehicle and battery storage supply chains. Management has undertaken a strategic review of its secondary exploration assets, resulting in a focused approach on advancing the Fatou and Niéllé projects towards mineral resource estimates. This rationalization involved the divestment of several non-core concessions. The organization is now well-funded to execute exploration programs on its priority projects, which will include geological reviews, geochemical sampling, geophysical surveys, and drilling campaigns. The long-term vision involves leveraging the successful development of its initial project to grow its resource base and capitalize on future expansion opportunities within its highly prospective operational area. The offtake strategy involves finalizing an agreement for 100% of the product from the Stage 1 DMS plant, with terms based on market prices.

The board of directors is led by a Non-executive Chairman with extensive experience in corporate finance and capital markets for publicly listed resource companies. Executive leadership includes a Chief Executive Officer, who is a geologist with over 20 years of experience in exploration and management, and an Operations Director with over 25 years of project management and mine development expertise. In March 2024, a representative from the company's largest shareholder was appointed as a Non-executive Director, bringing over 15 years of experience in natural resources investment and management. The board also includes an Independent Non-executive Director, a former audit partner with 32 years of experience in finance, accounting, and corporate governance for international resources groups. Governance is guided by the QCA Code, with oversight provided by an Audit & Risk Committee and a Remuneration & Nomination Committee. The board conducts ongoing performance reviews of its directors, setting individual objectives aligned with the company's overall strategy. The company is actively seeking to appoint an additional independent non-executive director to further strengthen the board.

The organization's sustainability efforts are guided by an updated Environmental, Social Impact Assessment (ESIA) for its Phase 1 DMS processing operations, which received regulatory approval in early 2024. A key focus is on community relations, managed through a formal Community Development Programme and a community consultation committee. Specific social initiatives undertaken include funding a full-time school teacher for a local village, donating tractors to support sustainable agriculture, and providing school supplies. The company has also addressed local infrastructure needs by replacing a broken community water pump, upgrading existing access roads, and installing additional solar power capacity at a local water well. Environmental planning for the project includes designing the power solution to accommodate the future installation of complementary solar power, likely after the first 12 months of operation. Management maintains a commitment to open dialogue and ongoing engagement with community leaders to ensure a strong social license to operate and to support communities through its development programs.

In November 2023, the company finalized a significant funding and partnership agreement with Hainan Mining Co. Limited, a subsidiary of Fosun International Ltd. This transaction involved transferring the primary development asset into a UK-registered vehicle, Kodal Mining UK Limited (KMUK), in which Hainan acquired a 51% stake. Kodal Minerals Plc retains a 49% interest and accounts for KMUK as an associate, maintaining significant influence through board representation. As part of the transaction, Hainan also made a direct equity investment in Kodal Minerals Plc, becoming the largest single shareholder with a 14.51% stake. A new operating subsidiary, Le Mines de Lithium de Bougouni SA (LMLB), was established to operate the mine, with the government entitled to a 10% free carried interest. In March 2024, an agreement was reached to terminate a right of first refusal previously granted to Suay Chin over 80% of the project's spodumene product. The company has also negotiated the sale of the Djelibani Sud, Nangalasso, Sotian, and Tiedougoubougou concessions to their original vendors, with these assets classified as held for resale.