Kodal Minerals Secures Bougouni Lithium Project Off-Take Agreement
Why we think this is very good
The off-take agreement for the Bougouni Lithium Project is a significant milestone for Kodal Minerals. It provides a clear revenue stream and pricing mechanism for the company's spodumene concentrate production, which is expected to be substantial relative to the company's market capitalization. The agreement with a reputable partner, Hainan Mining Co. Ltd, further validates the project and reduces execution risk. Overall, the details of the off-take agreement suggest a very positive development for the company's future prospects.
Key Points
- Off-take agreement signed for 100% of spodumene concentrate produced at Bougouni Lithium Project
- Agreement is with Hainan Mining Co. Ltd for a 4-year term
- Pricing mechanism referenced to Shanghai Metals Market published price for 6% spodumene concentrate
- No discount applied to the published price, reflecting favorable negotiated terms
- Minimum of 8,000 wet metric tonnes to be shipped each month
- Company working with Mali Government to finalize export license requirements
Summary
Kodal Minerals has signed an off-take agreement for 100% of the spodumene concentrate produced by the DMS processing plant at its Bougouni Lithium Project in Southern Mali. The agreement is with Hainan Mining Co. Ltd and is for a 4-year term, with an expected minimum of 8,000 wet metric tonnes to be shipped each month. The pricing mechanism is referenced to the Shanghai Metals Market published price for 6% spodumene concentrate, with no discount applied. The agreement also includes a floor price, providing some protection against downside price movements. The company continues to work with the Mali Government to finalize the export license requirements.