Kodal Minerals (KOD.L) announced in November it received the mining license for its Bougouni lithium project in Mali. This was the last outstanding permit required for the project to go ahead as the Environmental and Social Impact Assessment was already approved in 2019.
The mining license is valid for an initial 12 year term and can be extended for periods of 10 years until all resources located on the 97.2 square kilometer land package have been mined. The previous feasibility study which was completed in 2020 (and is now outdated) was anticipating an 8.5 year mine life with an average annual production rate of 220,000 tonnes of spodumene concentrate per year with an average grade of 6% lithium. This should result in a total production of just under 2 million tonnes of concentrate and a total revenue of US$1.4B while the operating costs were estimated at US$431/t while royalties and sustaining capex increase the operating expenses to $466 per tonne.
When the feasibility study was completed, 6% spodumene was trading at a much lower level than the $1000+ prices we currently see. At the current spot price for 6% spodumene, the total cumulative EBITDA of the project would exceed US$1B. Due to the low up-front capex of just US$129M, the project would be highly economical at the current prices and Kodal Minerals is currently working on an updated feasibility study so it will be interesting to see how the updated economics would work.
Disclosure: The author has no position in Kodal Minerals. Please read our disclaimer.
