Leo Lithium has released its annual report for 2022, revealing impressive operational results since its listing on the Australian Stock Exchange.
The Goulamina lithium project comprises a land holding of 100 km2 in the Bougouni Region of southern Mali, approximately 150 km by road from Mali’s capital, Bamako. The land holding encompasses the Goulamina mineral deposit and is sparsely populated.
The deposit consists of steeply-dipping sub-parallel spodumene pegmatite dykes all of which intrude the Goulamina Granite. The Pegmatites are dipping to the East and generally trending NNW-SSE. The Deposit is up to 1.8 km in length and still open along strike and at depth. In early 2023, the total Goulamina resource base increased by 31% from 108.5 Mt at 1.45 % Li2O to 142.3 Mt @ 1.38% Li2O.
“Leo Lithium has hit the ground running since listing on the ASX in June 2022, with
our flagship Goulamina lithium project well on track to come online in mid-2024 to supply the booming lithium-ion battery industry and become West Africa’s first spodumene producer.
“An early revenue opportunity has emerged with the export of direct shipped ore (DSO) targeted for the second half of 2023, further reinforcing the Company’s funding strength,” states Rick Crabb Non-Executive Chairman at Leo Lithium.
“Having a robust financial position enabled the Joint Venture to considerably expand Goulamina’s lithium resource to 142 million tonnes in January.
“Significant potential exists for further resource growth, particularly as (last month) the JV acquired highly prospective mineral concessions that will triple the Goulamina lithium project area.
Meanwhile, Leo Lithium’s experienced team have been progressing the construction of the Project on budget and schedule, with the recent successful first concrete pour and installation of key crushing and magnetic separation equipment marking a major step in de-risking Goulamina’s development,” added Crabb.
The Leo Lithium Goulamina project is set to achieve low strip ratios and is not dependent on credits from other minerals to achieve robust financial performance. Subsequently, on a fundamental financial level, it is one of the world’s leading hard rock lithium assets, underpinned by its substantial scale and expected low cost of production relative to other current operations and prospective projects.
It is set to deliver outstanding returns with a post-tax Net Present Value of US$2.94 billion at conservative prices. As manager of the 50/50 Goulamina lithium project JV with Gangfeng, Leo has commenced development activities to bring the Project into production, which is on track and budget to occur in H1-2024.
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In the Year 2022, the Group’s profit after tax amounted to A$66.3 million (compared to a loss of A$0.02 million on 31 December 2021). This figure included several significant items such as a gain of A$77.1 million from the completion of the Goulamina JV, which reflected the increase in the carrying value of Leo Lithium’s interest in the joint venture.
This carrying value was based on a 50% interest in the Goulamina JV, which was determined by Ganfeng’s US$130.0 million equity investment in MLBV, the Goulamina JV company, minus Leo Lithium’s existing cost base for the JV.
Additionally, the Group received Joint Venture management fees of A$0.4 million and paid advisory success fees of A$0.9 million and a Demerger completion fee of A$1.35 million to Macquarie Capital (Australia) Limited.
Other costs included A$1.75 million in costs assigned by Firefinch to Leo Lithium, A$7.1 million in administration expenses, A$1.3 million in share-based payment expenses, A$0.3 million in finance expenses on the loan from Firefinch, and a share in Joint Venture loss of A$0.08 million.
“Leo Lithium has made major strides in building a business platform conducive to sustainable growth. We have enhanced the scale and mineral resource quality of our flagship Goulamina Lithium Project in Mali, made great progress in constructing the Goulamina mine, and unlocked new value-accretive opportunities both in the near-term and long-term,” states Simon Hay CEO Leo Lithium.
“Our key initiative to enhance the scale and mineral resource quality of Goulamina was underpinned by the successful Danaya domain drilling program, which revealed thick zones of high-grade spodumene mineralisation.
“This ultimately led to a substantial upgrade of the Goulamina Mineral Resource, increasing by 31% to 142.3Mt @ 1.38% Li2O. We have made significant progress on the construction phase for Stage 1 of the Project, with the overall engineering works now over two thirds complete, on budget and on schedule,” concludes Hay.
Safety and Security
The Republic of Mali is a country in West Africa with a population of approximately 20 million. While the country has historically operated as a stable democracy, Mali is currently facing a complex political and security crisis which is impacting the centre and northern parts of the country (Goulamina is located in the south).
In August 2020, a coup placed the military in power however the transitional government has previously committed to holding democratic elections. Despite Mali’s recent political instability, all current mines have reported no interruption to normal operations and the country is operating largely as normal This is due to the central role mining plays in the economy.
“We have had a strong focus on building relationships with the Malian government, local businesses and the communities situated near the project, as we solidify our social license to operate. Mali is a high-quality mining jurisdiction, with a well-established Mining Code as evidenced by the numerous international mining companies operating in the country with stability over a long period of time.
“The Malian Minister of Mines as well local businesses and communities around Goulamina have all been very supportive of the Project and recognise the local opportunities it will provide across its mine life, which will span at least 23 years,” the report reads.
“The year ahead will be transformational for the company, and I believe we are in a great
position to deliver shareholder value both in the near and long term,” concluded Hay.
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