3 Further Reasons to add Kodal Minerals #KOD to your Watchlist
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3 Further Reasons to add Kodal Minerals #KOD to your Watchlist

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

KODAL MINERALS #KOD
Share Price: 0.135P
Market Capitalisation: £9.12M

 

Kodal Minerals is a lithium focussed development and exploration company focussed on the development of its Bougouni Lithium Project in Southern Mali.

3 FURTHER REASONS TO ADD KODAL MINERALS #KOD TO YOUR WATCHLIST

 

CORNERSTONE INVESTOR INCREASES THEIR INVESTMENT

On 11th June 2018, Kodal Minerals announced they’d raised, “£1.5 million for Further Development of Bougouni Lithium Project”.

As part of the fundraising, Suay Chin International, Kodal’s cornerstone Chinese investor and overtake partner subscribed for £1.2 million of the £1.5m the raise.

On completion of the subscription, Suay Chin will own 29% of the issued share capital of the Company.

Suay Chin have previously invested £4.8m into Kodal via equity subscription.

Also worth noting is that these shares are subject to the existing lock-in agreement between the Company, Suay Chin and others under which all of Suay Chin’s holding of Ordinary Shares are subject to orderly market restrictions until 12 May 2019.

Bernard Aylward, Chief Executive Officer of Kodal Minerals:

“The Company welcomes the continued financial and strategic support of Suay Chin. Kodal and Suay Chin are continuing to work together on the metallurgical testwork and bulk sampling with the aim of progressing our project as rapidly as possible. As part of the initial investment by Suay Chin, Kodal and Suay Chin have agreed to negotiate a binding off-take agreement as the project advances to development, and this further investment by Suay Chin confirms its confidence in the Bougouni Lithium Project and the interest in securing supply of the spodumene concentrate”

The agreement Kodal and Suay Chin entered into was a binding term sheet in which the parties will negotiate an extended off-take agreement for between 80% and 100% of the spodumene product produced at the Company’s Bougouni Lithium Project in Southern Mali for a period of three years.

CHINESE LITHIUM DEMAND

Ford’s executive chairman is confident that China will lead the electric vehicle revolution, according to Carscoop.

Speaking to The New York Times, Ford executive chairman William C. Ford Jr. said the carmaker’s plan to introduce 15 electric of plug-in hybrid models in China by 2025 is a sign of its confidence in the market.

“When I think of where EVs are going, it’s clearly the case that China will lead the world in EV development,” Ford Jr. said.

By 2040, EVs could account for 51% of all vehicles sold globally and sales of electric and hybrid cars in China more than doubled in April 2018 compared to the same time last year, as the promise of tax rebates and new models lured buyers towards cleaner vehicles.

According to the government-backed China Association of Automobile Manufacturers (CAAM), electric vehicle (EV) sales in China hit 225,310 during the first four months of this year, up 149% compared to the same period a year earlier and accounting for around half of all EV sales worldwidefrom BusinessGreen

 

MULTIPLE HIGH GRADE TARGETS

Since acquiring the project in mid-2016, Kodal has implemented an accelerated exploration programme at the Bougouni Lithium Project.

Kodal Minerals have multiple high grade intersections in multiple prospects. Some of the assays results can be seen below.

Their latest RNS entitled, “High Grade Lithium Intersections Extend Sogola-Baoule Prospect to over 1.4km, Bougouni Project, Southern Mali”, revealed more decent grades.

Highlights

· High grade lithium mineralisation from an additional 19 drill holes from follow-up and extension drilling at Sogola-Baoule. Intersections include:

  • 22m at 1.58% Li2O from 110m in drill hole MDRC083
  • 20m at 1.43% Li2O from 34m in drill hole MDRC084
  • 15m at 1.19% Li2O from 70m &
  • 13m at 1.76% Li2O from 117m in drill hole MDRC066;
  • 13m at 1.76% Li2O from 123m in drill hole MDRC073;

John Meyer, Mining Analyst with SP Angel reckons they “rank in the world top ten”.

You can hear John’s take on Kodal, on the podcast below, by scrolling into 11 mins 7 seconds:

Only high grade lithium carbonate with low impurities are suitable for use in lithium battery production.

On 9th October 2017, Shandong Ruifu Lithium, one of the largest lithium carbonate producers in China produced a high quality, low impurity battery grade lithium carbonate using spodumene concentrate from the Company’s Bougouni lithium project in Southern Mali.

Highlights

·    Battery Grade Lithium Carbonate: Shandong Ruifu successfully processed Bougouni spodumene concentrate to produce high grade lithium carbonate suitable for use in lithium battery production;

·    Low Impurities: Chemical analysis of the final lithium carbonate product reports low levels of impurities supporting its positioning as a premium product compared to many other products in the market;

·    Full Processing Path: This processing testwork confirms the Bougouni spodumene concentrate’s amenability for downstream processing into a final lithium carbonate product with excellent conversion and recovery of lithium mineralisation at all stages of processing;

Shandong Ruifu has a close relationship with Kodal’s major shareholder Suay Chin International and operates a lithium carbonate and lithium hydroxide production plant in the Shandong province of China.

Bernard Aylward, CEO of Kodal Minerals:
“Our programme includes the extraction of a 5,000 tonne bulk sample to be shipped to China for further testing and review of potential plant design parameters.”

 

 

2 MILESTONES APPROACHING

1. A MAIDEN RESOURCE ESTIMATE

Of all their multiple high grade targets, the Ngoulana prospect is their most advanced.

Reverse circulation drilling is continuing on site with two drill rigs operating on a “double shift” basis.

Drilling is planned to continue through to the beginning of the rainy season in June/July 2018 following which the Company expects to be in a position to commission a JORC Compliant Mineral Resource Estimate.

Bernard Aylward, Chief Executive Officer:
“We will be working towards the development of a maiden resource estimate over the summer months once we receive the assay results from the most recent drill programme”.

2. METALLURGICAL TESTING

On 21st May, within the RNS entitled, “Sogola-Baoule Prospect extended to over 1,000m High Grade Lithium Mineralisation Intersected in Drilling, Bougouni Project, Southern Mali”

Bernard Aylward, CEO of Kodal Minerals:
“Our parallel development activities are continuing with the bulk sample mining now underway with the transport of the first 1,000 tonnes to port expected shortly. The metallurgical testwork is continuing at an independent metallurgical laboratory in Australia to provide verification analysis as well as additional testwork ongoing in China.”

This 1000 tonne bulk same is the first part of a 5,000t bulk sample. is continuing with mining on site and the transport of the first 1,000 tonnes of material to the port of Dakar is expected to commence shortly.

 

How does it fit in with my research model, C.C.A.S.S.H which you can read more about by clicking here

GREEN = POSITIVE

BLACK = NEUTRAL

RED = NEGATIVE

CAPITALISATION

Kodal is just below £10m mcap and so is considered a micro cap stock. Their maiden JORC resource should generate a decent amount of value.

CHART

The share price closed at 0.1376p, close to a 12 month low of 0.1306. There’s no knowing where the bottom could be but a major fundraise at 0.13p could provide some decent support.

ASSETS

In their Interim Results they stated that they had net assets of £6.3m which included, “cash balances as at 30 September 2017 were £4,093,000. Current cash as at 15 December 2017 is £3,793,000”.

They also raised £1.5m (before expenses) on 11th June 2018 which Bernard Aylward commented:

“In the meantime, these new funds from Suay Chin and other investors will allow us to plan with confidence for the next drilling season later this year.”

SHAREHOLDERS

Up until the recent fundraise on 11th June, Suay Chin held 19.32% 0f the entire issued share capital of Kodal Minerals.

Bernard Aylward, CEO, owned 1.4%.

Robert Ian Wooldridge, Non-Executive Chairman owned 1.14%

Luke Bryan, Technical Director owned 0.72%.

Post fundraise Suay Chin own 32.3% of the entire issued share capital of Kodal Minerals.

 

SIGNIFICANT MILESTONE

As mentioned above, a maiden JORC resource and results from metallurgical work should be announced over the next few months.

HEAD HONCHOS

I’ve had no personal dealings with Bernard Aylward but he seems to be progressing the project along at a decent pace.

You can check out the biographies of the directors by clicking here

Lithium is going to play a mjor role in the electric vehicle revolution and the Chinese, being the biggest and earliest adopters, realise they need to secure the lithium supply chain in order to enable this advance.

Nowhere is this more in evidence than with Kodal Minerals. Kodal’s Chinese cornestone investor has just re-iterated their confidence in their project by subscribing to 80% of the recent £1.5m fundraise.

Kodal is still at the exploration stage so it’s still high risk. However, their assay results look promising and Shandong Ruifu Lithium (one of the largest lithium carbonate producers in China) has produced a high quality, low impurity battery grade lithium carbonate using spodumene concentrate from the Company’s project, so this mitigates the risk somewhat.

This risk will be further reduced following the summer when Kodal will produce a maiden JORC resource from their lithium project in conjunction with the release of further metallurgy results from bulk samples sent to their Chinese investors.

Investing in exploration companies, in Africa, is never going to be low risk but Kodal’s project is advancing at a decent pace, results look good and they have the backing of a large Chinese investor. Therefore, on the spectrum of high risk this can be nudged towards the lower end of the high risk scale but still possesses plenty of potential upside.

To add Kodal Minerals #KOD to your Vox Markets Watchlist, click here and tap the, “Follow”, button

To read my previous blog on Kodal Minerals click here

THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

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THE CONTENT OF THIS BLOG / WEBSITE (OR CONTENT ASSOCIATED WITH IT) IS NOT INTENDED AS INVESTMENT ADVICE, IT IS FOR INFORMATION PURPOSES ONLY. YOU SHOULD TAKE PROFESSIONAL FINANCIAL ADVICE IN CONNECTION WITH, OR INDEPENDENTLY RESEARCH AND VERIFY, ANY INFORMATION THAT YOU FIND ON THIS BLOG / WEBSITE AND WISH TO RELY UPON, WHETHER FOR THE PURPOSE OF MAKING AN INVESTMENT DECISION OR OTHERWISE. WE ARE NOT REGULATED UNDER UK FINANCIAL SERVICES LAW. THE AUTHOR OF THIS BLOG MAY HOLD AN INTEREST IN THE STOCK FEATURED.

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Mentioned in this post

KOD
Kodal Minerals