JOHANNESBURG (miningweekly.com) – As West Africa-focused mineral exploration and development company Kodal Minerals completes a £500 000 share placing, negotiations have been entered into for a proposed offtake agreement and possible further investment in its Bougouni lithium project, in southern Mali.

The company on Friday said Suay Chin International had subscribed for 166.7-million new ordinary shares at an issue price of £0.003 a share.

“This placing, completed at a premium to the current market share price, and the negotiations for an offtake agreement, are a great endorsement of our Bougouni lithium project and emphasise the perceived strategic and commercial value in its development,” said Kodal CEO Bernard Aylward.

The Singapore-registered company and Kodal also entered into an agreement to start negotiations for an offtake agreement for over 20% of the spodumene concentrate produced at the project, with potential for this to increase to 100% at a later date.

Suay Chin now has 30 days to undertake due diligence on Kodal and Bougouni, including site visits, preliminary metallurgical testing and confirmation of geology.

“Suay Chin is very positive about assisting us through the metallurgical testwork and development phase of the project and, with the additional funding, we will continue to advance the project rapidly,” he pointed out.

The agreement includes a second placing on the successful completion of due diligence that will allow Suay Chin to increase its shareholding on Kodal to 20% at a price of £0.0038 apiece, representing an investment of about £4.3-million and a 65% premium.

“The potential second placing with Suay Chin, if completed, will ensure that Kodal is well funded to produce initial mineral resource estimates at Bougouni and commission further scoping studies,” Aylward explained.

Following the completion of the second placing, Suay Chin and Kodal will negotiate an extended offtake agreement for 100% of the spodumene product produced at the project.