Kodal Minerals PLC Update on Gold Assets and Funding Agreement (4588N)

TIDMKOD

RNS Number : 4588N

Kodal Minerals PLC

01 February 2021

Certain information contained within this announcement is deemed by the Company to constitute inside information as defined in Article 11 of the Market Abuse (amendment) (EU exit) Regulations (SI 2019/310 ). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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

1 February 2021

Kodal Minerals plc ("Kodal Minerals", "Kodal" or the "Company")

Update on Gold Assets and Funding Agreement

Kodal Minerals, the mineral exploration and development company with operations in Mali and Cote d'Ivoire, is pleased to provide this update on its gold assets which it is progressing in conjunction with its flagship Bougouni lithium project in Southern Mali.

The Company's gold assets comprise projects in Mali, including the recent option to acquire up to 90 per cent of the Fatou project, as well as licences in Cote d'Ivoire currently held in a joint venture with Resolute Mining Limited ("Resolute") (the "Resolute JV").

In addition, and further to the Company's announcement on 15 January 2021, Kodal provides an update on the term sheet signed for a proposed funding agreement with AIM quoted Riverfort Global Opportunities Plc and Riverfort Global Opportunities PCC (together, the "Investors") to provide up to US$2,500,000 ("Funding Agreement"), to be used to further the exploration of the Company's gold assets.

HIGHLIGHTS

Resolute JV

-- Kodal Minerals has received a request from Resolute for an additional extension of the Resolute JV term, as Resolute's expenditure in the joint venture of approximately US$2 million falls short of its commitment under the agreement. However, after consideration, Kodal has refused the extension request and will now retain 100% ownership of the concessions when the Resolute JV expires on 25 February 2021.

-- The Resolute JV covers three concessions - Nielle, Tiebissou and M'Bahiakro (application) and Kodal will continue exploration on all concessions.

-- Exploration drilling of over 7,400m by Resolute has defined a gold anomaly at the Nielle project extending for over 1,000m and open along strike and at depth which will be the priority for future Kodal drilling in Cote d'Ivoire.

-- Kodal has received all data for the Nielle Project which includes previously reported drill results with intersections including:

   --    26m at 1.95g/t gold in drill hole NLRC012 
   --    16m at 1.96g/t gold & 10m at 3.62g/t gold in drill hole NLRC014 
   --    26m at 1.79g/t gold in drill hole NLRC018 

Funding Agreement

-- Kodal has been informed that the Investors have satisfactorily completed their due diligence in connection with the Funding Agreement and have confirmed their intention to continue with the USD$2,500,000 funding arrangement subject to agreement on final terms.

-- Kodal and the Investors are continuing negotiations over the final structure and terms of the Funding Agreement and will provide a further update as soon as possible as to whether final terms are agreed.

FURTHER INFORMATION

Resolute JV

Resolute has undertaken exploration on the Nielle and Tiebissou concessions as part of its commitment under the Resolute JV. Kodal has received an expenditure summary from Resolute demonstrating expenditure of approximately US$2 million, with expenditure on the Nielle concession exceeding US$1 million. The initial exploration activity on the Tiebissou concession consisted of geochemical sampling and reconnaissance aircore drilling that returned low-level gold anomalous results. The work is at an early stage and Kodal will complete a review to determine the potential for further exploration. Resolute has focussed exploration on the Nielle concession resulting in definition of an extensive gold anomaly at the Nielle concession with initial drilling demonstrating gold mineralisation that remains open at depth and along strike over a 1,000m strike length.

A request for an extension of the Resolute JV term has been received by Kodal and after consideration the extension request has been refused by Kodal. Kodal expects that the Resolute JV will be terminated either on the expiry date of the Resolute JV on 25 February 2021 or earlier, if agreed by Resolute.

Nielle Concession

The Nielle concession is located in the north of Cote d'Ivoire, approximately 60km to the north of the Tongon Gold mine operated by Barrick Gold Corporation. The project has been explored by Resolute with exploration consisting of:

-- Surface geochemistry of 92 stream sediment samples, 38 rock samples, and 474 soil samples collected. The results of this work resulted in the identification of two anomalies each over 3km long.

-- Auger geochemical drilling was then conducted with 542 holes drilled with a peak assay of 8.3g/t Au.

-- A follow-up programme of 7,000m of aircore drilling was conducted and initial results were encouraging, with a best intercept of 12m @ 2.39g/t Au from surface.

-- In the 2018 field season, Resolute drilled another 3,117m in 27 reverse circulation holes with mineralised intersections including:

-- 26m at 1.95g/t gold in drill hole NLRC012;

-- 16m at 1.96g/t gold & 10m at 3.62g/t gold in drill hole NLRC014; and

-- 26m at 1.79g/t gold in drill hole NLRC018.

High grade gold mineralisation up to 2m @ 13.9g/t Au is associated with pyrite, quartz veining and shearing as common in the Birimian sequence.

Kodal intends to continue drilling of the defined gold anomalous trend as well as complete the early-stage exploration drilling of the gold anomalous zones defined by the surface geochemical sampling.

Funding Agreement

Kodal has continued to advance discussions with the Investors to finalise the Funding Agreement to advance Kodal's gold assets in West Africa. Kodal has received notification that the due diligence has been completed to the full satisfaction of the Investor. Notwithstanding the signed term sheet (which is non-binding save for exclusivity and confidentiality), Kodal Minerals and the Investors are continuing negotiations over the final structure and terms of the $2,500,000 Funding Agreement and are looking to finalise the transaction as soon as possible. However, there can be no guarantee on the outcome of these negotiations and whether the final structure and terms will ultimately be agreed. Further updates will be provided as soon as appropriate.

**ENDS**

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

 
 Kodal Minerals plc                            Tel: [phone] 
  Bernard Aylward, CEO                          345 
 Allenby Capital Limited, Nominated Adviser    Tel: [phone] 
  Jeremy Porter/Nick Harriss                    5656 
 SP Angel Corporate Finance LLP, Financial     Tel: [phone] 
  Adviser & Broker                              0470 
  John Mackay, Adam Cowl 
 St Brides Partners Ltd, Financial PR          Tel: [phone] 
  Susie Geliher/Cosima Akerman                  1177 
 

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.

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February 01, 2021 02:00 ET (07:00 GMT)