Kodal Minerals PLC (AIM:KOD) is in talks to finance its Bougouni lithium project in Mali based on a capital cost of accelerating the development through a dense media separation (DMS) processing plant option estimated to be US$65mln, with a payback of two months once operations start if fully funded by equity.
With this capital development cost covering all associated infrastructure and commencement of mining, the company estimated this would generate an estimated NPV7% of approximately US$557mln, or US$420mln post-tax, with revenue forecast to exceed US$1.05bn in less than four years, based a price averaging US$2,080 per tonne of lithium, well below the recent spot prices above US$5,000.
The expected construction timeline would be around 12 months.
The DMS would see processing material from the Ngoualana deposit feeding 1Mtpa of lithium ore to a processing plant, where a conventional circuit would be used to maximise spodumene recovery of over 130,000 tonnes per annum of spodumene concentrate, Kodal said.
Bougouni would have an initial 4 year mine life based on these estimates, with future expansion expected to continue with the construction and commissioning of a down-stream flotation plant to exploit the resources at Sogola-Baoulé and Boumou, as well as longer term exploration prospects.
Bernard Aylward, chief executive, said: "The DMS plant scenario provides Kodal with a fast-track option towards achieving our goal of becoming the first operational lithium mine in Mali."
He said the mine life of nearly four years is based on mining all resources at the Ngoualana pit which boasts the highest grade ore of all deposits, with potential to supply additional DMS ore feed from adjacent exploration prospects where previous drilling has intersected with high grade pegmatite veins at Bougouni South, Marigo and Orchard.
"Importantly, the existing upside from the Sogola-Baoulé and Boumou deposits would be retained and processed in a future flotation plant which can be funded from the DMS operation project cash flows."
Aylward added: "The lithium market continues to be very strong and our Bougouni project continues to attract strong interest. The DMS development option has attracted interest from the wider market, and Kodal is progressing discussions with market operators and potential financing partners. The company will provide further updates as discussions progress."