Leo Lithium will sell its remaining 40 per cent stake in the Goulamina lithium project in southern Mali to joint venture partner Ganfeng for $US342.7 million.
As per the binding sale and purchase agreement, Ganfeng – China’s largest lithium producer – will solely fund all the remaining capital of Goulamina until the first revenue.
Leo Lithium will also novate its management rights of the project to Ganfeng. Until the end of the fourth quarter of 2024 (Q4 2024), Leo Lithium will act as a contractor to Ganfeng at the operation to ensure a smooth transition.
Leo Lithium and Ganfeng signed a co-operation agreement in May 2023, which was set to provide Leo Lithium with benefits such as a commitment to expand the capacity at Goulamina to one million tonnes per annum.
Ganfeng will now compensate Leo Lithium for the co-operation agreement’s termination by paying a 1.5 per cent gross revenue fee over a 20-year period in exchange for the offtake and other rights given up with the termination.
Leo Lithium managing director Simon Hay said following discussions with Ganfeng and the Mali Government, all outstanding issues concerning Goulamina have now been resolved.
“Despite our best efforts to reach a viable agreement with the Mali Government and considering the increasing risks associated with operating in Mali, the impact of the new 2023 (Malian) Mining Code and the company’s financial position for future funding, the board of Leo Lithium has determined that a sale of the company’s remaining interest in Goulamina is in the best interests of Leo Lithium shareholders,” Hay said.
“The board believes the executed sale and purchase agreement with Ganfeng provides our shareholders with certain value under highly challenging circumstances. Our relationship with Ganfeng remains strong, and we look forward to the next phase of our partnership.”
As Leo Lithium farewells Goulamina, the project remains on track to produce its first spodumene in Q3 2024.
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