TIDMKOD
RNS Number : 1966I
Kodal Minerals PLC
03 August 2023
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")
Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining
3 August 2023
Kodal Minerals plc
("Kodal Minerals", "Kodal" or the "Company")
Bougouni Lithium Project Funding Package - Kodal receives
Prepayment of US$3,500,000
and
Update on Conditions Precedent for Funding Package
Completion
Kodal Minerals, the mineral exploration and development company
focused on lithium and gold assets in West Africa, announces a
conditional prepayment of US$3,500,000 (the "Prepayment") as part
of the funding package for the Bougouni Lithium Project announced
on 19 January 2023 (the "Funding Package") agreed between the
Company and Hainan Mining Co. Limited ("Hainan") and its wholly
owned UK-incorporated subsidiary Xinmao Investment Co. Limited
("Xinmao" and together, the "Hainan Group").
The Company is also pleased to provide an update on the
restructuring of Kodal's subsidiary companies in Mali and advancing
of the conditions precedent for closing the Funding Package.
Highlights:
-- Kodal to receive a US$3,500,000 Prepayment of the
subscription agreement entered into as part of the Funding
Package.
-- Kodal will apply the funds to the continued advancement of
the Bougouni Lithium project and has sole discretion over use of
funds including for general working capital.
-- The Prepayment is repayable or convertible into new ordinary
shares of the Company should the Funding Package not proceed.
-- Kodal is completing the registration of a new company in
Mali, Les Mines de Lithium de Bougouni SA ("LMLB"), and this
company will be the owner of the Bougouni mining licence.
-- Kodal is also commencing the process of transferring the
mining licence from Future Minerals SARL to LMLB as a key condition
precedent for completion of the Funding Package.
Bernard Aylward, CEO of Kodal Minerals, remarked: "We are very
pleased to have received the support of the Hainan Group with the
Prepayment for some of the subscription agreement, allowing us to
continue to advance the Bougouni Lithium project while we work
towards completion of the Funding Package. This Prepayment does not
add further dilution to our shareholders and confirms the
confidence of both parties in being able to finalise the Funding
Package. Kodal and our partners the Hainan Group continue to work
together to progress plans for the development of the Bougouni
Lithium Project and are working hard to finalise this transaction
to allow construction to commence and the mine to rapidly move to
production.
"Kodal continues to work with the Government of Mali in the
finalisation of the new mining company, LMLB, and the transfer of
the mining licence to it. Kodal has maintained strong relationships
with the local Bougouni communities as well as the Government and
we and the Hainan Group are looking forward to working with the
Government as a partner in the Bougouni Project - under the Mali
mining code, the Government will have an initial free-carried
interest of 10% of the project and the right to purchase an
additional 10% of the project."
Further details of the Prepayment
As announced on 19 January 2023, the Funding Package being
provided by the Hainan Group comprises a US$100 million investment
to acquire 51% of the Bougouni project company, Kodal Mining UK
Limited, and a further US$17.75 million subscription for new
ordinary shares in Kodal Minerals PLC at 0.5p per share. On 1
February 2023, the Company announced receipt of the deposit of US$7
million from the Hainan Group pursuant to the terms of the Funding
Package, held in escrow pending completion of the Funding Package
(the "Deposit"). As announced on 31 June 2023, the long stop date
for the completion of the Funding Package has been extended to 31
August 2023 or such later date as may be agreed by the parties (the
"Longstop Date").
Kodal and the Hainan Group have now entered into a prepayment
agreement ("Prepayment Agreement") to provide Kodal with
US$3,500,000 from the Deposit to allow Kodal to continue to advance
the Bougouni Lithium project and for general working capital
purposes. A summary of the key items of the Prepayment Agreement is
provided below:
Under the Prepayment Agreement dated 2 August 2023, the Hainan
Group has agreed to make a prepayment of US$3,500,000 (the
"Prepayment Amount"), to be released from the Deposit, in respect
of the US$17,750,000 subscription amount (the "Subscription
Amount") payable under the subscription agreement entered into
between Xinmao and the Company dated 19 January 2023 (the
"Subscription Agreement") as part of the Funding Package.
Accordingly, on completion of the Subscription Agreement
("Completion"), the Subscription Amount due from the Hainan Group
shall be reduced to reflect receipt of the Prepayment Amount. No
new ordinary shares in Kodal will be issued to Hainan Group in
respect of the Prepayment prior to Completion and no interest is
charged on the Prepayment save as set out below. The Company is
entitled to apply the proceeds of the Prepayment Amount at its sole
discretion, including for general working capital purposes.
In the event that Completion does not occur by the Longstop Date
or the Subscription Agreement is otherwise terminated, the Company
shall repay the Prepayment Amount plus accrued interest (calculated
at a 10% annual interest rate applied from the date when the
Prepayment is received) on or before the date falling 90 days after
the termination of the Subscription Agreement (the "Repayment
Date"). If the Company is unable to repay the Prepayment Amount on
the Repayment Date, an additional 2% annual interest rate shall
apply and Xinmao shall have the right but not the obligation by
serving notice to the Company (the "Conversion Notice") to elect to
convert part or all of the outstanding Prepayment Amount plus
accrued interest into new ordinary shares in Kodal at a price per
share which is the lower of: (i) 85% of the mid-market closing
price of the Kodal's ordinary shares on the business day
immediately prior to the date on which the Conversion Notice is
received by the Company; and (ii) 85% of the VWAP for the 20
consecutive business days immediately prior to the date on which
the Conversion Notice is issued by Hainan.
Kodal has agreed that any funds received from the proposed sale
of the Bougouni West licences to Leo Lithium Limited (or its
subsidiaries) (as announced on 19 April 2023) will be placed into a
dedicated account and Kodal will not use these funds unless it is
to repay the Prepayment and any accrued interest should Completion
not occur by the Longstop Date or the Subscription Agreement is
otherwise terminated. Kodal expects to receive GBP1,600,000 upon
completion of the Bougouni West sale. Following Completion, the
funds received for the Bougouni West sale will remain exclusively
for Kodal to use at its sole discretion.
**ENDS**
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/Vivek Bhardwaj/Nick Harriss Tel: 020 3328
5656
SP Angel Corporate Finance LLP, Financial
Adviser & Joint Broker Tel: 020 3470
John Mackay/Adam Cowl 0470
Canaccord Genuity Limited, Joint Broker
James Asensio/Gordon Hamilton Tel: 0207 523
4680
St Brides Partners Ltd, Financial PR
Susie Geliher/Ana Ribeiro Tel: 020 7236
1177
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END
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