Kodal Minerals PLC (AIM:KOD) said it raised a gross £3.0mln via a subscription and placing and will use the funds to continue to develop and prepare for financing and construction of its flagship Bougouni lithium project in Mali.
"This oversubscribed placing demonstrates the ongoing support of our Bougouni lithium project and the opportunity to move into the development and construction phase,” said chief executive Bernard Aylward.
“Our major shareholder Suay Chin International Pte Ltd (Suay Chin) has participated in the subscription along with members of the board and company executives.
“Suay Chin continues to offer technical support in this important phase of project planning and moving to a decision to mine,” he said.
Suay Chin will hold about 14.18% of the company as a result of the placing.
The subscription for 130.1mln new shares and the oversubscribed placing of 941.3mln new shares were priced at 0.28 pence each, a 17.6% discount to yesterday’s closing price of 0.34p.
The shares were down 6.7% at 0.32p in early trade.
The funds raised will be used to complete the engineering programme and Environmental, Social and Community (ESG) engagement programmes.
The AIM-listed company said it will also carry out infill and extension drilling of the defined resource areas to prepare for a minerals resource review and potential increase and upgrade of the current resource. In addition, Kodal will also undertake exploration drilling where its previous work has highlighted major potential to add to the existing resource base.
“Our project continues to attract attention in this strong lithium market and the company is assessing opportunities for the development of the project,” said CEO Aylward, noting that the lithium market has continued to grow strongly over the last 12 months.
Increasing demand for spodumene product has driven the price of spodumene concentrate to above US$3,000 per tonne compared with the US$680 per tonne figure used in a 2020 feasibility study for the project.
“The company is focussed on moving the Bougouni lithium project to production as soon as possible to take advantage of this supply deficit and maximise value of the project,” said Aylward.
Some of the funds from the placing will also be used for the continued exploration of the company's gold assets and for additional working capital.