TIDMKOD
RNS Number : 0850Z
Kodal Minerals PLC
10 March 2017
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
10 March 2017
Kodal Minerals plc ('Kodal Minerals' or 'the Company')
Completion of GBP500,000 Placing, Proposed Off-Take Agreement
& Proposed GBP4.3 million Strategic Investment
Kodal Minerals plc, the mineral exploration and development
company focussed on West Africa, is pleased to advise that is has
completed a GBP500,000 share placing (the "Placing") and entered
into an agreement to commence negotiations for an off-take
agreement for the future spodumene concentrate produced from its
Bougouni Lithium Project, in Southern Mali (the "Project") as well
as a potential further investment into the Company of up to GBP4.3
million (the "Agreement").
Highlights
-- Agreement is with Suay Chin International Pte Ltd ("Suay
Chin"), a Singapore registered company formed to take advantage of
its extensive connections to supply the Chinese lithium market with
a range of clients from acid producers to lithium carbonate
producers and to the final lithium-ion battery manufacturer.
-- Suay Chin has strong support from Shandong Mingrui Chemical
Co Ltd, which is a long-term supplier to existing lithium carbonate
producers in Shandong Province.
-- GBP500,000 placing completed with Suay Chin at an issue price
of GBP0.003 per share for the issue of 166,666,667 new ordinary
shares of 0.03125 pence each in the Company (the "Placing Shares")
- representing a 30% premium to the closing share price on the date
prior to this announcement.
-- The Company and Suay Chin have agreed to commence
negotiations immediately for an off-take agreement over 20% of the
spodumene concentrate to be produced from the Project, with
potential for this to increase to 100% at a later date.
-- The Agreement allows Suay Chin a period of 30 days to
undertake due diligence on the Company and the Project, including
conducting site visits, preliminary metallurgical testing and
confirmation of geology.
-- Following the due diligence period and if successful, the
Agreement contemplates Suay Chin completing a second share placing
within a further 15 days (or 30 days with Kodal's consent) to
increase its shareholding in Kodal to 20% at a price of GBP0.0038
per share (expected to result in a further cash investment of
approximately GBP4.3 million) (the "Second Placing"). The price of
the proposed Second Placing represents a 65% premium to the closing
share price on the date prior to this announcement .
Bernard Aylward, CEO of Kodal Minerals, said: "This Placing,
completed at a premium to the current market share price, and the
negotiations for an off-take agreement are a great endorsement of
our Bougouni Lithium Project and emphasises the perceived strategic
and commercial value in its development. Our exploration activity
has confirmed the lithium mineralised pegmatite veins at surface
and the demonstration of high-grade lithium mineralisation from our
drilling has generated a lot of interest in fast-tracking potential
development. 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.
"This investment highlights the emerging lithium mineralised
region in Mali, and Kodal is continuing to progress its strategy of
developing a mining hub at Bougouni based on multiple high-grade
lithium pegmatite veins within the Project area. 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."
Further Information
Application will be made to the London Stock Exchange for the
Placing Shares to be admitted to trading on AIM ("Admission"). It
is expected that Admission will become effective and that dealings
in the Placing Shares will commence on or around 15 March 2017.
The Placing Shares will be issued within the Company's existing
share allotment authorities and represent approximately 3.09% of
the Company's issued share capital as enlarged by the issue of the
Placing Shares. Accordingly, Suay Chin's total shareholding in the
Company is declared as being 1,666,666,667 ordinary shares
representing approximately 3.09% of the Company's issued share
capital.
Following completion of the Placing, the Agreement provides that
the parties commence negotiations to complete an off-take agreement
for the supply of spodumene concentrate from the Project that will
cover 20% of the production. A due diligence period of 30 days will
commence to allow for the review by Suay Chin of all aspects of the
Project. At the completion of the due diligence period, Suay Chin
will have 15 days to notify Kodal of its intentions to continue
with the Second Placing.
If due diligence is satisfactory to Suay Chin, the Second
Placing will be undertaken such that the shareholding in the
Company of Suay Chin reaches 20% of the enlarged issued ordinary
share capital of Kodal. It is anticipated that this will require
the issue of an additional 1,138,227,978 ordinary shares in the
Company ("Second Placing Shares"). An issue price of GBP0.0038 per
share has been agreed for the Second Placing. The Second Placing
Shares will be issued within the Company's existing share allotment
authorities and represent approximately 17.45% of the Company's
issued share capital as enlarged by the issue of the Second Placing
Shares.
Following the completion of the Second Placing, Suay Chin will
have the right to nominate a director to the Board of Kodal. In
addition, Suay Chin will enter into a relationship agreement with
Kodal, its AIM Nominated Adviser and Broker that will govern its
actions whilst it retains its shareholding above 15% of Kodal's
issued ordinary share capital, including agreeing to act at all
times in the best interests of all Kodal shareholders,
acknowledging that all transactions between Suay Chin and Kodal
will be conducted on normal arm's-length terms, and agreeing to a
lock in and orderly market arrangement over its shareholding.
Following the completion of the Second Placing, Suay Chin and
Kodal will negotiate an extended off-take agreement for 100% of the
spodumene product produced at the Project. Shareholders should note
that there can be no guarantee at this stage on the timing of
completion of such agreement or if any such agreement will
ultimately be agreed.
Total Voting Rights
Following the issue of the Placing Shares and with effect from
Admission, the Company's issued share capital will consist of
5,386,254,850 ordinary shares of 0.03125 pence each ("Ordinary
Shares"), with one voting right per share. The Company does not
hold any Ordinary Shares in treasury. Therefore, the total number
of Ordinary Shares and voting rights in the Company will be
5,386,254,850. This figure may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company.
Suay Chin International Pte Ltd
Suay Chin is a Singapore based company that was registered in
January 2017. Suay Chin was formed to take advantage of its
extensive contacts throughout the Chinese chemical industry and to
operate as a trading company for the supply of materials to the
Chinese industry.
Suay Chin will be involved in all levels of the lithium market
from supplying material to acid producers, supplying spodumene
concentrate and lithium hydroxide to the Chinese lithium carbonate
producers, to the final end-user chemical and battery
manufacturers. The company gets strong support from Shandong
Mingrui Chemical Co Ltd, which is a long-term material supplier to
existing lithium carbonate producers in Shandong Province and has
deep understanding about the Chinese lithium market.
Suay Chin has arranged the metallurgical testing of Kodal's
spodumene rich pegmatite samples by existing lithium carbonate
producers in China and is expected to continue to offer strong
technical contribution to the development of the Project.
Prior to publication, certain information contained within this
announcement was deemed to constitute inside information for the
purposes of Article 7 of EU Regulation 596/2014. Upon publication
of this announcement, this information is now considered to be in
the public domain.
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 Tel: 020 3328
Jeremy Porter/Nick Harriss/Liz 5656
Kirchner
SP Angel Corporate Finance LLP,
Financial Adviser & Broker Tel: 020 3470
John Mackay/Laura Harrison 0470
St Brides Partners Ltd, Financial
PR Tel: 020 7236
Lottie Brocklehurst/Megan Dennison 1177
This information is provided by RNS
The company news service from the London Stock Exchange
END
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