Kodal Minerals PLC (LON:KOD) has lined up a collaboration agreement with Chinese engineering firm Sinohydro to work on the company’s Bougouni lithium project in southern Mali.
The two parties have signed a memorandum of understanding (MoU) to work together to develop the project.
Sinohydro is a subsidiary of state-owned PowerChina. It has undertaken a number of large and high-profile engineering and construction projects in Mali and continues to be active in large government infrastructure projects and private commercial developments.
Sinohydro will conduct at its own expense a review of the development proposed for the Bougouni Project and provide input in particular on procurement and civil engineering aspects of the feasibility study.
The Chinese firm will also review the financing requirements for the project and, subject to satisfactory review, assist in sourcing financing for it.
Following the completion of the feasibility review and development plan and demonstration of project financing, Kodal Minerals and Sinohydro will use reasonable endeavours to negotiate a mutually acceptable engineering, procurement and construction (EPC) contract, Kodal told investors.
“We have had ongoing discussions with Sinohydro for a period of time during which we have been pleased to host their technical team at the project site. We look forward to a strong and productive collaboration between our respective technical teams to maximise the benefit of the MoU which we see as delivering a third-party assessment of our feasibility study, a review of our development schedule and most importantly a review and advancement of the financing opportunities for the Bougouni Project,” Bernard Aylward, the chief executive officer of Kodal said in a statement.
"Sinohydro has a strong track record of developing and working on engineering projects in Mali and elsewhere in Africa which gives us great confidence that we have teamed up with a group that will bring many positive benefits to the Bougouni Project and will help Kodal Minerals to finalise the design, financing and construction process efficiently and cost-effectively,” he added.
Shares in Kodal shot up 28% to 0.06p on the announcement.