en.Wedoany.com Reported - Kodal Minerals, listed on London's AIM market, reported that for the second quarter ending June 30, its Bougouni lithium project in Mali experienced maintenance and fault issues in the crushing circuit of the dense media separation (DMS) processing plant, leading to feed delays and spodumene concentrate production falling below management budget.
The quarterly production decline was primarily due to poor performance in May caused by crushing circuit issues. After the site team completed repairs, a significant improvement in operations was observed in June. The team continues to monitor the DMS processing plant and crushing circuit, conducting scheduled maintenance and repairs to ensure stable operations.
Data shows that spodumene concentrate production for the quarter was 26,174 dry metric tonnes (dmt) at a grade of 5.34% lithium oxide; year-to-date cumulative production reached 53,195 dmt of spodumene concentrate. Kodal stated that the third shipment of spodumene concentrate arrived in Hainan, China on June 27, with final confirmation underway, after which payment for the shipment will be completed. The company explained that final payment awaits confirmation of grade adjustments, freight, and insurance costs, and has received an interim payment of $34.4 million, equivalent to 95% of the estimated final value.
After the quarter ended, the fourth export shipment was loaded and departed from the Port of San Pedro on July 11, containing approximately 24,200 tonnes of spodumene concentrate, expected to arrive in Hainan by the end of August. Kodal noted that the operating company, Les Mines de Lithium de Bougouni (LMLB), made its first repayment on loans provided by its major shareholder, Kodal Mining UK (KMUK), transferring $13 million during the quarter. KMUK has used the received funds to repay most of the outstanding amounts under the Hainan loan facility. This Hainan loan facility consists of interest-bearing debt and is KMUK's only external debt.
Kodal stated that the Bougouni operating company continues to generate strong profits from spodumene concentrate production, benefiting from a robust lithium price environment and high demand for spodumene concentrate. The operating company is generating cash flow and is expected to continue repaying loans to KMUK. CEO Bernard Aylward said the Bougouni operating company continues to export spodumene concentrate, with the strong price environment enabling LMLB to generate very positive returns. The operating company plans to continue regular exports of spodumene concentrate on a six-week to two-month schedule, with each shipment ranging between 15,000 and 20,000 dmt. Aylward stated that spodumene concentrate exports are proceeding as planned, with the fourth shipment departing San Pedro shortly after the quarter end, further demonstrating the reliability of the export route from Bougouni to Côte d'Ivoire.
At the Ngoualana mine, Kodal reported that the open-pit operation continued during the quarter, with additional mining equipment mobilized and work commencing in the pit. Operations at the Ngoualana open-pit mine lagged behind the quarterly plan, with mining initially affected by equipment availability and blasting efficiency. The open-pit mining contractor has deployed additional equipment to the site, and operations improved in May and June. The company stated it is actively managing the supply of key input materials and has not encountered issues with fuel or explosives supply. Aylward said the team is focused on achieving operational budgets and maintaining prudent cash control to ensure the continued strong profitability of the Bougouni lithium operation.
Regarding the Bougouni development plan, Kodal noted that work on the proposed second-stage flotation plant continued during the quarter. Updates to the environmental and social impact assessment are underway, with meetings and discussions with relevant communities progressing, along with potential compensation assessments for affected communities within the expanded footprint of the Boumou mine. The development team is working with consulting engineers on the proposed flotation plant design, and the team plans to ship an additional 20 tonnes of samples for metallurgical testing and plant design optimization. Testing work will also complete the Bond Work Index studies required to determine mill sizing for the flotation plant's crushing circuit. The second-stage development plan will continue through the year.
Aylward stated that during the quarter, the Bougouni operating company planned for normal operations and prepared for the upcoming rainy season to ensure stable production. Revenue from the third and fourth shipments is expected to be received during the quarter, and with the continued strong spodumene price environment, the Bougouni operating company is benefiting from high spodumene prices and expects to continue regular repayments to KMUK. Kodal said it maintains its participation and interest in the Bougouni lithium project through a 49% stake in KMUK, held in partnership with Hainan Mining, which holds ultimate control as the 51% shareholder. KMUK holds a 65% stake in subsidiary mining company LMLB, which owns the project in partnership with the Malian government, with KMUK providing management oversight and operational control of Bougouni mining activities.
