West Africa-focused lithium and gold exploration and development company Kodal Minerals has completed a transaction with Hainan Group, raising $117.75-million for the development and start of production at the Bougouni lithium project, in Mali.

The funding will also be used for ongoing exploration and development programmes designed to continue the expansion of Bougouni.

The transaction comprises a $17.75-million equity subscription by Hainan Group into Kodal and a $100-million investment by the group into Kodal's UK subsidiary Kodal Mining.

"This is a major milestone in our progress towards the construction of Bougouni and becoming a producer of high-grade lithium spodumene concentrates. Throughout the process of completing the funding transaction, Kodal and the Hainan Group worked closely together to advance key project development activities while completing all necessary conditions precedent to finalise the funding. 

"We have developed a strong relationship with the Hainan Group and we will work together to achieve our shared goal of production within 12 months from now," comments Kodal CEO Bernard Aylward.

Bougouni is an advanced lithium project with a mining permit for an initial 12-year period, renewable in ten-year blocks until all resources are mined. 

The permit covers 97 km² of highly prospective lithium deposits, which, to date, has a Joint Ore Reserve Committee mineral resource estimate of 31.9-million tonnes of lithium oxide.

The project will be developed through a two-stage development strategy. Stage 1 will entail the processing of ore from the Ngoualana deposit through a dense media separation (DMS) plant that is under construction. 

Stage 2 will entail the processing of ore from the Boumou and Sogola-Baoulé deposits through a flotation plant.

Aylward points out that an active work programme has been planned for Bougouni, with Kodal operations director Steve Zaninovich and Hainan's technical representative Jerry Gao working to finalise the design of the DMS operations at the Johannesburg offices of Kodal's engineering consultant DRA Global, as well as starting the procurement of long lead items. 

"In Mali, our development team, led by our GM Yushen Caiy is building our internal capacity for the construction phase and future operations of Bougouni, while continuing with the access road development and site preparations which commenced in October.

"We are also looking to the future with an exploration programme proposed for further drilling at the Boumou prospect as a priority, in addition to further drilling and assessment of the many pegmatite bodies already identified within our mining licence area," he adds.

Following the transaction, Hainan Group holds 14.72% of Kodal's issued share capital.