KODAL MINERALS PLC

Earnings Release • Aug 22, 2018

National Storage Mechanism | Additional information

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RNS Number : 4938Y

Kodal Minerals PLC

22 August 2018

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.  

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

Kodal Minerals plc ('Kodal Minerals' or the 'Company')

32m at 1.61% Li2O returned for the Sogola-Baoule Prospects -

Bougouni Project, Southern Mali

Kodal Minerals, the mineral exploration and development company focussed on the exploration and development of its Bougouni Lithium Project in Southern Mali, West Africa ("Bougouni" or the "Project"), is pleased to announce all assay results have now been received for the drilling campaign completed at Bougouni in June 2018.  High-grade mineralisation has been returned for the Sogola-Baoule prospect ("Sogola-Baoule") where mineralisation remains open along strike.  Also, the Company is pleased to provide an update on exploration drilling at the Boumou, South Bougouni and Ngoualana prospects at which new lithium mineralised zones have been identified.

Highlights

·   Sogola-Baoule mineralisation continues to extend to north-east and has increased in thickness. Intersections include:

o 32m at 1.61% Li2O from 112m in drill hole MDRC106;

o 26m at 1.37% Li2O from 85m in drill hole MDRC109; and

o 21m at 1.64% Li2O from 157m in drill hole MDRC107

(Note all depths are downhole depth, and true vertical depth will be shallower or closer to surface)

·   Mineralised intersections are within broader mineralised zones up to 53m in downhole width

·   Exploration drilling at the Boumou, South Bougouni and Ngoualana prospects has identified new zones of lithium mineralisation within the project area. Intersections include:

o 15m at 1.05% Li2O from 88m in drill hole MDRC094 - South Bougouni Prospect;

o 6m at 1.35% Li2O from 77m in drill hole KLRC108 - Boumou Prospect; and

o 5m at 1.59% Li2O from 80m in drill hole KLRC165 - Ngoualana South Prospect;

(Note all depths are downhole depth, and true vertical depth will be shallower or closer to surface)

·   All final assay results have been incorporated into the Company database and are being incorporated in the mineral resource estimate work that is progressing ahead of expected finalisation and release in September

Bernard Aylward, CEO of Kodal Minerals, said: "The continued wide, high-grade intersections at the Sogola-Baoule prospect are very encouraging and highlight the potential of this prospect to be our main target area within the Bougouni project. We will be returning to this prospect in August to undertake diamond drilling to target geological information from infill drilling and further advance the prospect with extensional drilling.

"We are also very pleased that our exploration drill testing of new target areas continues to return encouraging mineralised intersections.  Our focus during this drilling campaign has been on the Ngoualana, Sogola-Baoule and Boumou prospects to underpin a maiden resource estimate which we are targeting to release in September. However, we are also continuing to demonstrate further potential across our licence area and as a result there is significant scope to build on the initial resource estimate going forward."

Further Information

Bougouni Lithium Project - Drilling Update

Final assay results have been received for the drilling campaign completed in June 2018.  This announcement covers 42 drill holes (three at South Bougouni, 10 at Boumou, 14 at Ngoualana and 15 at Sogola-Baoule).  The drilling has returned numerous mineralised pegmatite intersections and the significant intersections based on a minimum 5m width, and calculated using a 1% Li2O lower cut-off and maximum 2m internal dilution, are tabled below:

Prospect	Hole ID	Northing	Easting	Hole Depth m	From m	To m	Thickness m	Li2O %
Boumou	KLRC140	1256250	655450	97	77	83	6	1.35
Ngoualana	KLRC165	1255014	664490	115	80	85	5	1.59
South Bougouni	MDRC094	1258900	664250	163	88	103	15	1.05
Sogola-Baoule	MDRC100	1253710	653400	106	82	87	5	1.02
Sogola-Baoule	MDRC102	1253735	653450	133	94	101	7	1.38
	MDRC102				109	121	12	1.12
Sogola-Baoule	MDRC104	1253760	653500	138	80	106	26	1.31
	MDRC104				131	136	5	1.28
Sogola-Baoule	MDRC106	1253790	653550	169	112	144	32	1.61
	MDRC106				147	156	9	1.06
Sogola-Baoule	MDRC107	1253825	653600	187	146	153	7	1.27
	MDRC107				157	178	21	1.64
Sogola-Baoule	MDRC109	1253770	653550	145	85	111	26	1.37
	MDRC109				118	126	8	1.05

Notes:  Drill holes are reverse circulation drill holes completed by specialist contractor Geodrill Limited. Drill holes have been sampled on a 1m basis, with samples collected via a cyclone and riffle splitter. Drill hole collars are surveyed using a differential GPS with sub 1-metre accuracy, coordinate system WGS84 - Zone 29N, and all holes are survey down-hole for dip and azimuth on approximately 30m intervals. All drill holes are geologically logged, and sampling for analysis in based on geological boundaries.  1m samples of pegmatite rock have been collected via riffle splitter, and 3 metre composite samples of metasediment host rock.  Samples were analysed by ALS Global. Assay results are reported as Li% and converted to Li2O% by a factor of 2.153.  Intersections are reported using a 1%Li2O lower-cut-off, and allowing for a maximum of 2m internal dilution.

Sogola-Baoule Prospect

These final drill holes for the Sogola-Baoule prospect are located on the north-eastern extension of the prospect.  The geological interpretation is indicating a thickening of the pegmatite zone to the east, possibly associated with the intersection of two structural zones.  The mineralised intersections reported are associated with wider zones, such as in MDRC106 where a zone of 53m at 1.36% Li2O is identified, however, it has areas of dilution that fall outside the reporting standards.  This wider zone will be included in the Mineral Resource estimate which is targeted for release in September.  In addition, wider zones of mineralisation are reported for MDRC107 with 32m at 1.45% Li2O and MDRC109 with 33m at 1.27 Li2O% noted.  The eastern extension of the prospect remains open along strike and will be a primary target for additional drilling, especially given the width and grade of the pegmatite mineralisation in this area.

Geological modelling and interpretation is underway for the Sogola-Baoule prospect and will include all assay information.  The prospect will be included in the maiden Mineral Resource estimate for the Bougouni project, however additional exploration and extension drilling is expected to expand this prospect.

Exploration Drilling

The additional drill holes reported here relate to exploration drilling completed at the Boumou, South Bougouni and Ngoualana prospects.

The Boumou prospect drilling has intersected multiple lithium mineralised pegmatite veins (refer RNS announcement 16 July 2018).  This drilling reported here is the final holes from the northern portion of the prospect where a consistent pegmatite vein extending for over 400m with downhole mineralisation up to 15m width has been confirmed by drilling.   These holes are located to the north and east of the mineralised drilling and were planned to test for additional pegmatite bodies.  The mineralised intersection reported in KLRC140 is of 6m at 1.35% Li2O.  Follow-up drilling will target the western extension of the zone where the structure remains open along strike and also indicates a convergence of structures.

The Boumou prospect is the third advanced prospect for the Company at the Bougouni project and is undergoing Mineral Resource assessment as the Company looks to complete the maiden resource estimate.

The South Bougouni prospect is located approximately 3km to the south of the township of Bougouni.  Exploration drilling was planned in this area to follow-up previous reconnaissance drilling that had returned mineralised intersections on very wide spaced drilling.  The Company was only able to complete three additional holes due to access constraints for local farming, however, the significant mineralisation intersected in MDRC094 of 15m at 1.05% Li2O highlight the potential for further discoveries in this prospect area.  This prospect will be targeted for additional drill testing when the new drill season commences after the rainy season.

The final exploration prospect targeted in the 2018 field campaign was the Ngoualana South prospect.  The drilling completed here was on a very wide spacing and was planned as a reconnaissance test to follow up an earlier intersection of 7m at 1.63% Li2O located approximately 200m south of the main Ngoualana prospect.  The drilling has intersected mineralised pegmatite bodies, however, given the wide spaced drilling the geological interpretation is not able to link specific pegmatite veins.  This area will be reviewed and further drilling will be planned to target these off-set and parallel positions to attempt to define additional mineralisation at the Ngoualana prospect.

Lithium

The pegmatite veins intersected by drilling at Bougouni are spodumene rich (20-30% spodumene content) low mica pegmatite bodies with spodumene being the main lithium bearing mineral in most hard rock lithium deposits.  The high-grade lithium mineralisation returned in the assays compares favourably with other hard rock spodumene mineralised pegmatite veins under development around the world where grades range from 1.1% Li2O through to 1.4% Li2O.  The intersections reported in this announcement have been estimated using a 1.0% Li2O lower-cut and have consistently high mineralisation throughout the pegmatite bodies.

An initial review of the development process for the Bougouni lithium pegmatite bodies was completed as part of the World Bank sponsored SYSMIN study completed by CSA Global in 2008.  This report indicated that a process of mine site crushing, screening and dense media separation techniques was able to produce a good quality spodumene concentrate, with grade over 6% Li2O. Further tests completed by Shandong Ruifu Lithium Co Ltd, one of the largest lithium carbonate producers in China, and reported by the Company on 9 October 2017, produced a high quality, low impurity battery grade lithium carbonate using spodumene concentrate from Bougouni.

Recent lithium concentrate (grade 6%) prices range between US$800/t and US$950/t.

The exploration results and activity reported in this announcement have been reviewed by Mr Bernard Aylward who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Aylward has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Qualified Person as defined in the AIM Note for Mining and Oil & Gas Companies dated June 2009. Mr Aylward consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

**ENDS**

For further information, please visit www.kodalminerals.com or contact the following:

Kodal Minerals plc Bernard Aylward, CEO	Tel: +61 418 943 345
Allenby Capital Limited, AIM Nominated Adviser Jeremy Porter/Nick Harriss	Tel: 020 3328 5656
SP Angel Corporate Finance LLP, Financial Adviser & Broker John Mackay	Tel: 020 3470 0470
St Brides Partners Ltd, Financial PR Susie Geliher/Lottie Brocklehurst	Tel: 020 7236 1177

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

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