Mineral exploration and development company Kodal Minerals says Hong Kong Xinmao Investment (HKXI), a wholly owned subsidiary of Hainan Mining Co, has entered into a loan agreement with Kodal Mining UK (KMUK) for a $15-million loan to be drawn down by KMUK.

During the 2024 financial year, the Bougouni lithium project was transferred to KMUK, with Hainan taking a 51% stake in KMUK for $100-million. Kodal retains a 49% interest in KMUK.

Kodal says an initial $7.5-million advance under the loan facility has been received by its subsidiary KMUK and used to satisfy the final payment relating to the binding memorandum of understanding (MoU) between KMUK and the State of Mali.

At the company’s flagship Bougouni lithium project in southern Mali, the ramp-up of the dense media separation (DMS) processing plant is continuing.

The DMS processing plant has produced over 20 000 t of spodumene concentrate to date and the processing team are continuing to make adjustments to operations to improve performance and reach nameplate capacity.

Openpit mining activity is continuing ahead of schedule, ensuring that the run-of-mine (RoM) stockpile is built up ahead of the wet season and in advance of the plant reaching steady-state production.

Kodal says its team is progressing discussions with the Mali government in order to finalise the necessary permitting for export, allowing the sale of ore to China to start.

Kodal CEO Bernard Aylward describes the agreed loan facility as a “prudent measure” for KMUK to ensure that ramp-up and site operations are secured ahead of the start of exports.

The loan facility is expected to be repaid out of the sales of product once exports begin and the amount of product on site is anticipated to generate revenue in excess of the amount available under the loan facility, he points out.

“With the completion of the MoU payment and the recently announced mining licence transfer, the Bougouni project team are now working to secure the necessary export permit as the final item required to commence spodumene concentrate sales.

“As the ramp-up of the DMS processing plant continues, we see regular improvements in the operation and the production of spodumene concentrate. We anticipate reaching nameplate capacity in the next quarter and entering steady state production,” Aylward notes.