TIDMKOD
RNS Number : 8121Z
Kodal Minerals PLC
05 September 2018
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
5 September 2018
Kodal Minerals plc ('Kodal Minerals' or the 'Company')
Maiden Mineral Resource Estimate at Bougouni
Kodal Minerals, the mineral exploration and development company
focussed on the exploration and development of its Bougouni Lithium
Project in Southern Mali, West Africa ("Bougouni" or the
"Project"), is pleased to announce the maiden Mineral Resource
estimate, preliminary open pit optimisation studies and mineral
processing review for the development of the Bougouni Project. To
view this announcement with the illustrative diagrams please use
the following link:
http://www.rns-pdf.londonstockexchange.com/rns/8121Z_1-2018-9-5.pdf
Highlights
-- Maiden Mineral Resource of 17.3Mt at 1.20% Li(2) O in the Inferred category.
-- The Maiden Mineral Resource is made up of Kodal's three most advanced prospects:
o Sogola-Baoule: 10.4Mt at 1.18% Li(2) O;
o Ngoualana: 4.7Mt at 1.34% Li(2) O;
o Boumou: 2.2Mt at 1.01% Li(2) O
(Mineral Resource reported using a 0.5% Li(2) O lower cut-off,
no top cut-off and is based on the wireframe interpretation of
mineralised pegmatites)
-- Preliminary open pit optimisations have been undertaken to
identify key areas for further drill testing and definition of the
pegmatite hosted mineralisation.
-- Mineralisation captured within these conceptual open pits
totals 13.2Mt at 1.2% Li(2) O. This is not an Ore Reserve estimate,
however it highlights areas where the optimised shells are resource
constrained and these areas will be the focus for future drilling
campaigns.
-- Separately from the Mineral Resource and optimisation study,
Kodal has commissioned a Processing Review by independent
engineering consultants, Wave International, based on the ongoing
metallurgical testwork for the Bougouni mineralisation. This is
considered an order of magnitude study.
-- This review indicates a capital cost of AUD$14M for a 1Mtpa
dense media separation plant component. A full plant will require a
crushing circuit and additional materials handling components.
-- The processing review further indicates a potential
production cost of US$400 per tonne of spodumene concentrate which
compares to a current market selling price of between US$800 and
US$900 per tonne.
-- Exploration and definition drilling for resource expansion
and continued testing of new target areas is underway.
Bernard Aylward, CEO of Kodal Minerals, said: "This maiden
Mineral Resource estimate is a major milestone in the advancement
of the Bougouni Lithium Project as it confirms the potential for
future mining development. The fact that the estimate is supported
by initial engineering studies showing potential for a minimum ten
year mine life with low capital costs and robust economics is very
encouraging. Importantly, this maiden resource estimate is based on
our three most advanced prospects, which remain open along strike
and at depth, and we still have a very large project area to
explore. Should these exploration efforts be successful, the
potential to increase the annual production of the Project is
significant. We have already identified a pipeline of prospects for
additional drill testing that have the potential to significantly
expand the Bougouni Project.
"This Mineral Resource estimate places the Bougouni Project in
the top 15 hard rock lithium projects worldwide. We are in a very
fortunate position of already having secured an off-take partner
and we have strong commitments of support within Mali for the
future mining development. The order of magnitude study undertaken
by our engineering consultants Wave International has highlighted a
potential low capital cost and an indicative operating cost which
is approximately half of the current prices being reported for
spodumene concentrate.
"This is a very exciting phase for the Project. Our preliminary
mining and processing studies highlight a potential long-life mine
producing a high grade, low impurity spodumene concentrate demanded
by the market. The next stages of work at Bougouni will be the
continued exploration and definition drilling, upgrade of the
Mineral Resource estimate to Indicated status, continued study on
the open pit optimisation with a focus on reducing mining costs and
finally continued metallurgy studies to optimise the processing
plant."
Further Information
Mineral Resource Estimate
The maiden Mineral Resource estimate has been completed by
independent geological consultants CSA Global. Kodal supplied a
geological database and verified the geological interpretation that
was used to define the lithium mineralised pegmatite bodies.
Resource estimation was completed for the Ngoualana,
Sogola-Baoule and Boumou prospects. All of the Mineral Resource is
classified as Inferred. The level of data for the Ngoualana and
Sogola-Baoule prospects could support an upgrade to Indicated
status following completion of a field visit by the CSA Global
resource geologist who is the Competent Person for the resource
estimation. The resource is reported using a lower cut-off grade of
0.5% Li(2) O, no upper cut-off has been used. The geological model
for the resource estimate was developed with a focus on geological
logging of pegmatites as the primary method for building the 3-D
model, with assay grade a secondary vector utilising a nominal 0.3%
Li(2) O lower cut-off as a guide for economic significance (note
the guide for building the 3-D model of 0.3% Li(2) O is different
from the reporting lower cut-off of 0.5% Li(2) O that is applied
following the completion of the block modelling).
The Mineral Resource estimate for the Ngoualana, Sogola-Baoule
and Boumou prospects are tabulated below. These mineral resources
are reported in accordance with the JORC Code(1) :
Contained Li(2)
Tonnes Li(2) O% O
(Mt) Grade (kt)
Sogola_Baoule 10.4 1.18 122.2
------- --------- ----------------
Ngoualana 4.7 1.34 62.8
------- --------- ----------------
Boumou 2.2 1.04 22.9
------- --------- ----------------
Total 17.3 1.20 207.9
------- --------- ----------------
Notes: Mineral resources are reported using a 0.5%Li(2) O
cut-off. Figures may not sum due to rounding. The contained metal
is determined by the estimated tonnage and grade.
The JORC code Table 1 will be available to view via the
Company's website at www.kodalminerals.com
Preliminary Mining Assessment
A preliminary open pit mining optimisation study was undertaken
to assist in the planning of future infill and extension drilling.
This optimisation study was completed using conservative inputs to
ensure a robust project and demonstrate potential future mining.
This study is undertaken early in the assessment of the Bougouni
project and is not attempting to define an Ore Reserve
estimate.
The table below summarises the total mineralisation captured
within the optimised open pit shells. This is based on the full
resource estimate (no-cut off, full model) and as the Mineral
Resource is at an Inferred category this does not represent any
attempt to define an Ore Reserve estimate. To advance this
preliminary optimisation study, additional work will involve a
detailed analysis of input costs (mining and processing as well as
transport), processing recoveries, hydrology and geotechnical
investigations which will lead to the commencement of open pit
design production scheduling work.
Tonnes Li(2) O% Li(2) O - Contained
Open Pit (Mt) Grade Metal (kT)
Ngoualana 3.6 1.27 46.1
--------------- --------- --------------------
Sogola-Baoule 8.9 1.13 100.5
--------------- --------- --------------------
Boumou 1.2 1.10 13.1
--------------- --------- --------------------
13.7 1.16 159.7
--------------- --------- --------------------
Note: Reporting figures using a 0.0% Li(2) O cut-off within
preliminary pit shells. This is not an Ore Reserve estimate.
Further work is required to assess all the modifying factors as
well as demonstration of the economic viability of the project.
From this initial optimisation it is clear that the
Sogola-Baoule has potential to provide the most tonnage to any
potential processing plant, while the Ngoualana prospect has
significant potential to add higher-grade material into the
processing blend.
The optimisation of the Sogola-Baoule prospect has captured the
majority of the defined Mineral Resource estimate and is model
constrained in numerous areas providing immediate drilling targets
for follow-up to potentially expand the Mineral Resource. The
north-eastern portion of the resource has intersected wide, high
grade material and this is a priority area for exploration drilling
to target extensions to the current mineral resource estimate and
positive results here may have a significant impact on the
Sogola-Baoule prospect.
The optimisation of the Ngoualana prospect again has captured
the majority of the mineralisation. Additional drilling in this
area will focus on the western and eastern extensions, as well as
continuing to target parallel and off-set positions.
The Boumou prospect is at an earlier stage of exploration
assessment. The drilling completed has identified several
mineralised pegmatite veins, and this optimisation study is
highlighting key areas for additional exploration drilling to
define this target area.
Metallurgy and Preliminary Processing Plant studies
Kodal has commissioned the engineering consultant group Wave
International to undertake a review of Kodal's continuing
metallurgical testwork programme and to provide a high level
overview of potential processing flow sheet, processing plants and
capital expenditure. Wave International has been very active in the
Lithium development and processing area and has relevant expertise
to help Kodal with the potential development of the Bougouni
project.
The review completed by Wave International has highlighted the
fact that the metallurgical trends exhibited from the initial
testwork on the Bougouni mineralisation are consistent with other
spodumene deposits currently under study, development or operation.
On this basis, a conceptual flow sheet utilising a single stage DMS
circuit has been recommended. This is a well understood processing
circuit and in use in many lithium mining and processing
operations. Further recommendations for ongoing metallurgical
testwork and scoping level study parameters have been recommended
by Wave International and these have been incorporated into the
ongoing metallurgical testwork programme.
In addition to the review of the metallurgical testwork, Wave
International has also undertaken an "Order of Magnitude" review of
potential capital costs (Capex) (note for the development of a
1Mtpa DMS plant only) and operating costs for an open pit mining
operation and processing plant. This study has indicated Capex of
AUD$14M to build the dense media separation component of the
processing plant. Additional capital will be required for a
crushing circuit as well as the tailings storage facility and other
requirements. The Capex required for the open pit operations and
associated infrastructure is not part of this review and will be
undertaken in the ongoing optimisation studies.
A preliminary review of the operating costs for the potential
open pit mining and processing at Bougouni has been undertaken by
Wave International and indicate costs in the order of US$400 per
tonne of spodumene concentrate produced. The costs estimates have
initially been compared to actual operating mines of similar size
in Australia and will be modified following review and adjustment
for local Mali factors. This compares favourably with the current
market price of approximately US$800 - 900 per tonne of
concentrate.
Future Activities
Kodal has a very busy schedule planned to continue with the
exploration and development studies of the Bougouni Lithium
project. The activities will consist of:
Exploration:
-- Exploration drilling is continuing at the Sogola-Baoule
prospect to continue targeting extensions of the prospect and
increases in the resource;
-- Exploration reverse circulation drilling will recommence
following the rainy season, with a first priority being additional
drilling at the Boumou prospect, the Sogola-Baoule extensions and
offsets and testing of new targets.
Metallurgical testing
-- Metallurgical testwork is continuing and is focussed on
optimising the processes need for the Bougouni mineralisation;
-- Additional testwork will incorporate samples from the
Sogola-Baoule prospect and will be looking to optimise a
"processing blend".
Mining studies and Optimisation
-- Kodal will continue with the review of input mining and
processing costs into the study models to improve potential mining
operations;
-- A review of potential open pit designs and capital requirements will be undertaken;
-- An update of the Mineral Resource estimate is expected in the
fourth quarter of 2018 following a site visit by the independent
geologist and additional drill testing.
In addition to this work, Kodal is continuing with the
Environmental and Social Impact Assessment with the aim of
completing the study in the first quarter of 2019.
The results of this work programme are designed to allow Kodal
to lodge a mining licence application with the Mining Department in
Mali in the second quarter of 2019.
Lithium
The pegmatite veins intersected by drilling at Bougouni are
spodumene rich (20-30% spodumene content) low mica pegmatite bodies
with spodumene being the main lithium bearing mineral in most hard
rock lithium deposits. The high-grade lithium mineralisation
returned in the assays compares favourably with other hard rock
spodumene mineralised pegmatite veins under development around the
world where grades range from 1.1% Li(2) O through to 1.4% Li(2) O.
The intersections reported in this announcement have been estimated
using a 1.0% Li(2) O lower-cut and have consistently high
mineralisation throughout the pegmatite bodies.
An initial review of the development process for the Bougouni
lithium pegmatite bodies was completed as part of the World Bank
sponsored SYSMIN study completed by CSA Global in 2008. This report
indicated that a process of mine site crushing, screening and dense
media separation techniques was able to produce a good quality
spodumene concentrate, with grade over 6% Li(2) O. Further tests
completed by Shandong Ruifu Lithium Co Ltd, one of the largest
lithium carbonate producers in China, and reported by the Company
on 9 October 2017, produced a high quality, low impurity battery
grade lithium carbonate using spodumene concentrate from
Bougouni.
Recent lithium concentrate (grade 6%) prices range between
US$800/t and US$950/t.
The exploration results and activity reported in this
announcement have been reviewed by Mr Bernard Aylward who is a
Member of the Australasian Institute of Mining and Metallurgy. Mr
Aylward has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Qualified Person as
defined in the AIM Note for Mining and Oil & Gas Companies
dated June 2009. Mr Aylward consents to the inclusion in this
announcement of the matters based on his information in the form
and context in which it appears.
The Mineral Resource estimates have been prepared by Dr Matthew
Cobb who is a Member of the Australian Institute of Geoscientists.
Dr Cobb is a Principal Resource Consultant with CSA Global and has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the
activity being undertaken to qualify as a Qualified Person as
defined in the AIM Note for Mining and Oil & Gas Companies
dated June 2009. Dr Cobb consents to the inclusion in this
announcement of the matters based on his information in the form
and context in which it appears.
**S**
For further information, please visit www.kodalminerals.com or
contact the following:
Kodal Minerals plc
Bernard Aylward, CEO Tel: +61 418 943
345
Allenby Capital Limited, Nominated Adviser
Jeremy Porter/Nick Harriss Tel: 020 3328
5656
SP Angel Corporate Finance LLP, Financial
Adviser & Broker Tel: 020 3470
John Mackay 0470
St Brides Partners Ltd, Financial PR
Susie Geliher/Lottie Wadham Tel: 020 7236
1177
Glossary of Technical Terms
"Indicated that part of a Mineral Resource for
Resource" which tonnage, densities, shape, physical
characteristics, grade and mineral content
can be estimated with a reasonable level
of confidence. It is based on exploration,
sampling and testing information gathered
through appropriate techniques from
locations such as outcrops, trenches,
pits, workings and drill holes. The
locations are too widely or inappropriately
spaced to confirm geological and/or
grade continuity but are spaced closely
enough for continuity to be assumed
"Inferred that part of a Mineral Resource for
Resource" which tonnage, grade and mineral content
can be estimated with a low level of
confidence. It is inferred from geological
evidence and assumed but not verified
geological and/or grade continuity.
It is based on information gathered
through appropriate techniques from
locations such as outcrops, trenches,
pits, workings and drill holes which
may be limited or of uncertain quality
and reliability
"JORC" The Australasian Joint Ore Reserves
Committee Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves
2012 (the "JORC Code" or "the Code").
The Code sets out minimum standards,
recommendations and guidelines for Public
Reporting in Australasia of Exploration
Results, Mineral Resources and Ore Reserves
"Measured that part of a Mineral Resource for
Resource" which tonnage, densities, shape, physical
characteristics, grade and mineral content
can be estimated with a high level of
confidence. It is based on detailed
and reliable exploration, sampling and
testing information gathered through
appropriate techniques from locations
such as outcrops, trenches, pits, workings
and drill holes. The locations are spaced
closely enough to confirm geological
and grade continuity
"Mineral a concentration or occurrence of material
Resource" of intrinsic economic interest in or
on the Earth's crust in such form, quality
and quantity that there are reasonable
prospects for eventual economic extraction.
The location, quantity, grade, geological
characteristics and continuity of a
Mineral Resource are known, estimated
or interpreted from specific geological
evidence and knowledge. Mineral Resources
are sub-divided, in order of increasing
geological confidence, into Inferred,
Indicated and Measured categories when
reporting under JORC
"Mt" million tonnes
"t" tonne (= 1 million grammes)
"cut off" the lowest grade value that is included
in a resource statement. It must comply
with JORC requirement 19: "reasonable
prospects for eventual economic extraction"
the lowest grade, or quality, of mineralised
material that qualifies as economically
mineable and available in a given deposit.
It may be defined on the basis of economic
evaluation, or on physical or chemical
attributes that define an acceptable
product specification
"Kt" Thousand tonnes
"Ore Reserve" The econominically mineable part of
a Measured or Indicated Mineral Resource
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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