Mali has long been a gold mining hotspot, but two companies are looking to establish the country’s critical minerals credentials with the Goulamina lithium mine.
Leo Lithium and Ganfeng Lithium Group – China’s largest lithium chemicals producer – are joint venture (JV) partners in the Goulamina lithium project, which is set to begin spodumene concentrate production in the second quarter of 2024 ramping up to a Stage 1 production capacity of 506,000 tonnes per annum (tpa).
Goulamina has a mineral resource of 142.3 million tonnes (Mt) at 1.38 per cent lithium oxide and an ore reserve of 52Mt at 1.51 per cent lithium oxide. By comparison, Liontown Resources’ Kathleen Valley lithium project in WA has a mineral resource of 156Mt at 1.4 per cent lithium oxide and an ore reserve of 68.5Mt at 1.34 lithium oxide.
“Liontown is on a very similar scale and schedule to us – first production (in) mid next year and a 150–160 million tonne resource, which is where we’ll be shortly,” Leo Lithium managing director Simon Hay said at the 2023 RIU Sydney Resources Round-up.
“Just one difference – their (Liontown’s) market cap is $6.2 billion, ours is $700 million, so even if you discount the 50 per cent asset ownership, you can really see on a resource level that Leo Lithium is very undervalued.”
Leo Lithium received a boost this week through a $106.1 million investment by JV partner, Ganfeng, involving the placement of 131 million shares. Ganfeng – a new major shareholder – now owns 9.9 per cent of Leo’s shares on issue.
The placement offer price was $0.81 per share – a 6.5 per cent premium to Leo Lithium’s five-day volume-weighted average price (VWAP).
Ganfeng’s investment also involves a cooperation agreement with Leo Lithium to support Goulamina’s development.
“The strategic placement and terms of the proposed cooperation agreement with Ganfeng represent a transformational opportunity for Leo Lithium and provide further validation of the Tier-1 quality of Goulamina, including the significant potential upside of our development pathway,” Hay said in a statement.
“Upon settlement, the company will be fully-funded for its share of Goulamina Stage 1 development costs and operational ramp-up, and well-positioned to progress its various co-commitment activities with Ganfeng.”
The cooperation agreement will see the two companies conduct a study exploring the potential to raise Goulamina’s production capacity from 506,000tpa to 1Mtpa. Ganfeng and Leo Lithium will also consider the possibilities of establishing a downstream conversion facility in Europe as well as establishing and joint funding exploration in Australia.
Leo Lithium surged from $0.73 per share at close on Friday to as high as $0.86 per share on Monday following news of Ganfeng’s investment.
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