Kodal Minerals (KOD) H2 2024 earnings summary

Executive summary

• Bougouni Lithium Project in Mali advanced to construction phase, with first production targeted by end of 2024 following a $117.75m financing package with Hainan Mining, which now holds 51% of KMUK, the project vehicle.

• Kodal retains 49% of KMUK and significant operational influence, while also receiving a direct $17.75m equity investment from Hainan, making Hainan the largest shareholder at 14.51%.

• A 40% increase in Bougouni's mineral resource was achieved, now totaling 31.9Mt at 1.06% Li₂O, driven by successful extension drilling at the Boumou prospect.

• Kodal remains fully funded for ongoing gold and lithium exploration, with a strategic focus on advancing the Fatou and Niéllé gold projects.

Financial highlights

• Group reported a profit of £27.2m for the year ended 31 March 2024, compared to a loss of £1.5m in the prior year, driven by a £30.5m non-cash revaluation gain from the partial disposal of Bougouni.

• Operating loss was £3.3m, including £1.6m impairment of gold assets and £0.24m in share-based payments.

• Cash balances increased to £16.3m at year-end, up from £0.5m, reflecting the Hainan investment and option exercises.

• Net assets rose to £57.4m from £14.9m year-over-year.

• Exploration and evaluation expenditure was £3.0m, down from £3.2m in the prior year.

Outlook and guidance

• Bougouni is expected to commence lithium production by the end of 2024, transitioning Kodal from developer to producer.

• Ongoing exploration at Bougouni and gold projects is planned, with sufficient funding in place for at least the next 12 months.

• Kodal aims to become the first London-listed lithium producer in West Africa and anticipates further resource growth and expansion opportunities.