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

29 August 2025

Kodal Minerals plc

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

Annual Results & Notice of AGM 

Kodal Minerals, the mineral exploration and development company, is pleased to provide its final results for the year ended 31 March 2025.

The Company's Annual Report and Accounts will be made available on the Company's website www.kodalminerals.com shortly. The Company's annual general meeting ("AGM") will be held at 2:30pm on 30 September 2025 at Fieldfisher LLP, 9th Floor, Riverbank House, 2 Swan Lane, London EC4R 3TT.

Operational Highlights:

Bougouni Lithium Project, Mali ("Bougouni" or the "Project") operated by Kodal Mining UK Limited ("KMUK") in which Kodal has a 49% interest

·    Completion of construction of Stage 1 Dense Media Separation ('DMS') processing plant at Bougouni on time and within the US$65 million budget

o  'Power on' milestone achieve at Bougouni's power generation plant in January 2025

o  Construction of a new road to provide improved access for local communities to Ngoualana village approximately 3km west of Bougouni completed and received overwhelming support locally

o  Limited level of further construction activity continued onsite with remaining site works and development of site camp and facilities completed since year end

·    First spodumene concentrate product was achieved at Bougouni in February 2025.

o  By the end of July 2025 post period end, over 40,000 tonnes of spodumene concentrate was produced

·    The KMUK team continued to negotiate the finalisation of the Mining Licence transfer to Les Mines de Lithium de Bougouni ("LMLB"), which completed in April 2025 post period end together with the signing of a binding Memorandum of Understanding ("MoU") with the Mali Government confirming the migration of the Project to the 2023 Mining Code

·    Kodal and KMUK advanced negotiations with our operating partner Hainan Mining Co. Limited ("Hainan") to finalise an offtake agreement with Hainan for 100% of the spodumene product from Bougouni, which was completed on 30 June 2025 post-year end

·    Further exploration and resource extension drilling was completed and continues to highlight the significant potential for expansion of the Bougouni resource

Gold portfolio:

·    Kodal's exploration geologists visited the Fatou sites during the year and developed an exploration targeting assessment to finalise planning of exploration programmes

·    Following the US$17.75 million investment by Hainan in Kodal in November 2023, Kodal remains well funded to undertake the necessary exploration at the Fatou prospect to advance towards a maiden mineral resource estimate

·    The licences in Côte d'Ivoire remain in good order, however delays in permitting from the Forestry Commission prevented further exploration progress

Financial and Corporate Highlights:

·    Group operating loss of £2,446,000 after impairments and share based payments (2024: £3,344,000)

·    Group invested £133,000 in exploration and evaluation expenditure on its gold projects (2024: £2,971,000) whilst the focus of the Group's efforts were concentrated on completion of construction and first production at Bougouni

·    The value of the Group's investment into Kodal Mining UK Limited ('KMUK') was £21.4 million (2024: £31.2 million) as its share of KMUK's loss for the period was £9.0 million (2024: £84,000), including the one-off payment of US$15 million to the State of Mali under the MoU

·    25% decrease in the value of gold projects in Mali and Cote D'Ivoire to £1,623,000 (2024: £2,162,000)

·    21% decrease in Group net assets to £45,584,000 (2024: £57,430,000)

·    Cash balance of £16,888,000, an increase from the previous year's level (2024: £16,327,000)

Commenting on the results, Kodal's CEO Bernard Aylward said:

"I am extremely proud of our significant achievements at KMUK's flagship Bougouni Lithium Project over the past 12 months, from the commencement of construction of the Stage 1 DMS processing plant in June 2024, to delivering first production of lithium spodumene concentrate in February 2025.

"This is no small feat for a modest mineral development company, which only acquired this asset in 2016 and has successfully advanced to production in under ten years. I would like to thank the efforts and dedication of the Project team on the ground at Bougouni for our wonderful success and I look forward to witnessing our evolution into a fully-fledged lithium producer in the coming year once we have been granted an export licence from the Mali government and ramping up to nameplate capacity and production by the end of 2025.

"Lithium prices have had begun to show signs of stabilisation following the depressed commodity price performance in 2024, and with the continued government support for electric vehicles in the Chinese market through government subsidiaries, we look forward to shortly confirming first shipments of spodumene concentrate to supply Hainan's lithium hydroxide plant in China once the export permit has been granted. 

"I wish to thank all our loyal shareholders who have stuck by us during the highs and lows of our development phase, and I look forward to delivering the fruits of our hard labour to them in the months ahead."

**ENDS**

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

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.

CHAIRMAN'S STATEMENT

I am delighted to present the Annual Report of Kodal Minerals plc ("Kodal" or the "Company" and together with its subsidiaries and associate, the "Group") for the year ended 31 March 2025.

This financial year saw the Group deliver on the construction of the Bougouni Lithium Project ("Bougouni" or "the Project") and commence its strategy of transitioning project developer to critical metals producer. 

As detailed more in the Operational Review, significant progress on the construction and development of the plant was made in the financial year by the team at Kodal Mining UK Limited ("KMUK"), which owns the Bougouni asset and in which Kodal has a 49% interest.  Construction of the stage 1 Dense Media Separation ("DMS") plant was successfully completed within the US$65m capex budget and first lithium spodumene concentrate product was achieved within forecast timescales in February 2025.

The relationship with our operating partner Hainan Mining Co. Limited ("Hainan"), a subsidiary of Fosun International Ltd ("Fosun"), has been critical to the successful construction of the plant at Bougouni.  The US$100m funding from Hainan in the prior financial year has enabled the successful completion of the stage 1 DMS plant on time and on budget and has facilitated an expansion of the resource base at the mine.  During the year, we have finalised the terms of an offtake agreement between Kodal and Hainan covering 100% of production of the Bougouni stage 1 DMS plant, which we finalised post-period end.  The agreement provides for Bougouni to supply feedstock to Hainan's lithium hydroxide plant in China, a processing plant commissioned in 2024 which produces 20kt of battery-grade lithium hydroxide annually.

The successful completion of the stage 1 DMS plant at Bougouni is a key stepping stone in our stated broader strategy of becoming a focused lithium explorer and developer participating in the rapidly expanding global electric vehicle and battery storage industries.  Global electric vehicle sales are expected to continue to grow, forecast to reach over 70 million vehicles globally by 2040.  We are excited to be part of this transition to cleaner energy.

During the year we continued to assist KMUK in its liaison with the Mali Government for the transfer of the mining licence to KMUK's local subsidiary, Les Mines de Lithium de Bougouni SA ("LMLB"). We were delighted to receive sign-off from the President of Mali in April 2025, marking the successful completion of the transfer.  Discussions continue with the Mali Government to finalise the necessary permitting for the export of product from Bougouni.  We expect to be able to announce the granting of this permit very shortly.

Our positive engagement with the local community in Bougouni is crucial to the ongoing success of the Project, and I am delighted with our team's continued work over the past twelve months.  Kodal continues to support key local infrastructure requirements and during the year we have collaborated on a number of initiatives, including the replacement of the local solar-powered water pump, which supplies water to Ngoualana Village (near the Bougouni Project) and our ongoing sponsorship of the teacher at the Kola-Sokoura primary school.  Further information on our community engagement activities is given in our ESG report on page 22.

Outlook

Following successful production of the first spodumene concentrate at a grade of over 5.3% Li₂O earlier this year, the immediate target for the Bougouni team is to undertake further refinements and modifications to the DMS plant, achieve commercial production and consistently deliver 10,000 tonnes per month of spodumene concentrate in line with the offtake agreement with Hainan.

Over the next year, the team will continue to focus on expanding the growing resource at Bougouni towards our target of 50Mt of Li₂O and, in particular, testing the potential within the Boumou prospect to increase the stage 1 DMS feedstock.  At the same time, studies for a stage 2 flotation plant at Bougouni are being updated, with the aim of advancing the next stage of the Project in 2026.  This work will seek to underpin a development strategy which will maximise future production from Bougouni over an extended mine life.

While maintaining our current focus on Bougouni, as part of our broader strategy we are also actively seeking new opportunities in the lithium market, both within West Africa and wider afield. We have enjoyed enormous support from our shareholders over the years, and I want to extend my thanks and gratitude for their continued interest in Kodal.  We look forward to providing regular updates for this exciting year ahead as Bougouni enters commercial production.

Robert Wooldridge

Non-executive Chairman

28 August 2025

OPERATIONAL REVIEW

The year ended 31 March 2025 was a significant year in our journey towards becoming Africa's next lithium producer as a 49% shareholder in the Bougouni Lithium Project.  By the year end, construction had been substantially completed at Bougouni and the Project had achieved first lithium spodumene concentrate production.

As the Bougouni Lithium Project continues to be the most important asset for the Group, both in terms of management attention and impact on the financial position, the main focus of this Operational Review is on the Bougouni Project's progress.

Following completion of the Hainan investment in November 2023, the team in Bougouni was able to progress the construction of stage 1 DMS processing plant at a rapid rate.  Commencing in June 2024, construction of the stage 1 DMS plant was successfully completed within the US$65m budget and first lithium spodumene concentrate product was achieved within forecast timescales in February 2025.  In addition, further exploration and resource extension drilling was completed and continued to highlight significant potential for expansion of the Bougouni resource. A summary of progress is provided below.

Bougouni Operations

Construction and Plant Optimisation

Commissioning of the Project was substantially complete by the year end with the DMS processing plant operating at steady state with consistent throughput and ongoing minor optimisation work remaining. Importantly, plant availability and forecast mining rates were achieved by the year end, and at times are exceeding expectations.  Improvements and modifications to the plant made during the commissioning phase resulted in improved production; by the end of July 2025, over 40,000 tonnes of spodumene concentrate had been produced, representing approximately four months of production.  The stockpile continues to grow as we await the imminent export permit approval.   

A small amount of construction activity continues at the Project with remaining site works and construction of the site camp and associated facilities having been completed since the year end. Construction of a new road to provide improved access for the local communities to the village of Ngoualana (located approximately 3km west of the Bougouni Lithium Project) has been completed, which has received overwhelming support locally.

Mining Activity

The open-pit mining activities have continued to progress smoothly and are running continuously with day and night shifts deployed.  The building of the ore stockpile has continued with over 220,000 tonnes of ore at the year end grading on average 1.17% Li₂O at the run-of-mine pad ready for crushing and processing. This represents approximately 2.5 months of ore processing and provides the advantage that production ramp up will not be hampered by insufficient mined ore.

Mineral Resources

The current Joint Ore Reserves Committee ("JORC") compliant Mineral Resource Estimate ("MRE") at Bougouni is 31.9Mt at 1.06% Li₂O following the addition of 10.6Mt in 2023.  The JORC (refer notes below) compliant Mineral Resource estimate for the Bougouni Lithium project, including the Sogola-Baoulé, Ngoualana and Boumou prospects is tabulated below:

Notes: 

These mineral resources are reported in accordance with the Australasian Joint Ore Reserves Committee Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (the "JORC Code" or "the Code").  The Code sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves.

Sogola-Baoulé resource estimate unchanged from 2019.  A 0.5% Li₂O lower cut-off applied, and resource wireframe defined by a 0.3% Li₂O selected boundary.  Estimate completed utilising Surpac software.

Ngoualana resource estimate reported utilising a 0.5% Li₂O lower cut-off.  All pegmatite mineralisation modelled including zones of waste material for a fully diluted model. Estimate completed using Leapfrog modelling software.

Boumou resource reported using a 0.75% Li₂O lower cut-off. All pegmatite mineralisation modelled including zones of waste material for a fully diluted model. Estimate completed using Leapfrog modelling software.

Figures in table may not sum due to rounding.  The contained metal is determined by the estimate tonnage and grade.

The JORC code Table 1 with details of the resource estimate parameters is available to view on the Company's website at www.kodalminerals.com.

Initial work indicates there is significant upside potential from Sogola-Baoulé, Boumou and unexplored Kola-Sokouro and Bougouni South deposits. 

In September 2024, further RC drilling results were received for the Boumou prospect drilling campaign completed in April and May.  The programme consisted of 18 RC drill holes for a total of 3,234m.  The drilling targeted further westward extensions of the wide pegmatite bodies intersected in the March 2023 drilling campaign.

Assay results received from four RC holes targeting the western extension of the ore body highlighted a zone of strong alteration and faulting that has resulted in the thinning of the pegmatite bodies and loss of lithium mineralisation.  This is consistent with the geological interpretation that highlighted wide continuous pegmatite bodies up to a marked north-south oriented creek, that was interpreted to be associated with a fault structure. 

Exploration and development diamond drilling continued at the Boumou prospect during the year with two diamond drill rigs completing 19 drill holes for 4,297m targeting infill and definition of the pegmatite bodies. Geological review of the diamond core indicates continuity of wide zones of spodumene rich pegmatite intrusions confirming the geological interpretation and previous drilling information. Assay results were received post-year end with further results remaining pending. Wide, high-grade extensions returned at Boumou included 52m at 1.51% Li2O from 175m in drill hole KLRC210 and 32m at 1.11% Li2O from 93m in drill hole KLRC212. An update of the Boumou prospect JORC mineral resource estimate will be undertaken following receipt of remaining assay results and geological interpretation.

The Boumou prospect, centrally located within the Bougouni mining licence area, is expected to be key to the future development strategy to maximise future production from the stage 2 flotation plant at Bougouni. Samples have been selected for a Boumou specific metallurgical testwork programme, and both the DMS and flotation process routes will be explored. The potential for some parts of the Boumou deposit to feed the existing DMS facility could provide additional life for this stage 1 installation. By the end of 2025, we are targeting an increase in the global MRE to 50Mt Li2O.

Processing

Bougouni will be developed through a two-stage development strategy: Stage 1 through processing ore from the Ngoualana deposit at the DMS process plant currently ramping up; and stage 2 through processing ore from the Boumou and Sogola-Baoulé deposits (and possibly part of the Boumou deposits) through a flotation plant.

Further work will be undertaken in the year ahead to update the studies for a stage 2 flotation plant at Bougouni.  In order to maximise future production, the development strategy is being staged with stage 1 DMS running from 2025 to 2028, while the stage 2 flotation plant commences operations thereafter, running until 2036.  The capital expenditure requirement for the stage 2 flotation plant is forecast to be in the region of US$175m - US$200m, to be funded from the cash flows generated from the stage 1 DMS operations.

Mining Licence Transfer

In 2022, the State of Mali (the "State") initiated an audit of the mining sector, including a review of existing mining conventions for existing mines. In August 2023, the State issued a new Mining Code (the "2023 Mining Code") and later in that year established a commission comprised of Malian Government advisors and representatives (the "Commission") which was tasked with negotiating certain aspects of existing mining conventions and clarifying the application of the 2023 Mining Code to both existing and new mining projects. In July 2024, the State finalised and issued the Implementation Decree for the 2023 Mining Code, which included certain details relating to economic parameters not previously included in the 2023 Mining Code.

The KMUK team has conducted meetings with the Commission to finalise the transfer of the Bougouni mining licence and confirm the Hainan Transaction that is supporting the development of the Bougouni Lithium Project.  KMUK and the State entered into a binding memorandum of understanding (the "MoU") to finalise the transfer of the Project mining licence to the established mining company Les Mines de Lithium de Bougouni ("LMLB"). The MoU agreed between the parties confirms the migration of the Project to the 2023 Mining Code whilst confirming rights relating to various customs and tax exemptions for the Project.

The material terms of the MoU are:

·    Migration of the mining licence to the 2023 Mining Code, with the State confirming the transfer of the licence to LMLB (a subsidiary of KMUK) with an initial validity period of 10 years, and upon expiry the State undertakes to renew the licence according to the conditions of the mining code in force on the date of renewal.

·    The State has confirmed the customs exemptions for the construction of the operation:

a)   Temporary admission, on a pro rata temporis basis, free of charge, of vehicles, machinery and plant, heavy machinery, and other property placed under this regime and included in the mining list;

b)   Exemption from all import duties and taxes payable on tools, oils and greases for machines necessary for their activities, petroleum products, spare parts (except those intended for passenger vehicles and all vehicles for private use), materials and equipment, machinery and appliances intended to be permanently incorporated into works and included in the mining list, covering only the needs of the construction phase; and

c)   The goods and products referred to in points (a) and (b) shall be valued, by common agreement by the parties, to determine the remaining needs.

·    The State and national investors will have an equity interest in LMLB of 35% through the issue of new shares, the acquisition of which has been calculated in accordance with the provisions of the 2023 Mining Code. The State always had an initial 10% free participation right in the Project and the agreed acquisition price for the additional 25% of new equity is approximately US$4.3 million. The 35% equity interest holds priority rights, including preventing the State and national investors' interest from being diluted below 35% in the event of any capital increases in LMLB.  It is noted that the KMUK partners retain the right to recover all capital investment and intercompany loans from the operation as a priority.

·    Implementation of a shareholders' agreement to ensure that the board of LMLB will have at least four directors on behalf of the State, including two independent directors.

·    The MoU confirms the approval of all agreements relating to the Hainan Transaction and an associated payment by KMUK to the State of US$15 million (now fully settled) payable in cash as follows:

-  US$7.5 million within five days of the signing of the MoU; and

-  US$7.5 million by 31 March 2025.

The KMUK team continued to negotiate the finalisation of the Mining Licence transfer to LMLB. All formalities required by the administrative process and all payments required under the MoU have been signed off by the Ministers of Mining and Finance. We were delighted to announce on 17 April 2025 that the application for transfer had received the signature of the President of Mali, Assimi Goïta, and the transfer of the Mining Licence to LMLB had been completed. 

Discussions continued to finalise the necessary permitting for the export of the spodumene concentrate produced at Bougouni to enable the export of spodumene content to the Ports of Abidjan and San-Pedro in Côte d'Ivoire and then to China. 

Offtake Agreement

During the year, Kodal and KMUK continued negotiations with Hainan to finalise an offtake agreement with Hainan for 100% of the spodumene product produced at the Bougouni Lithium Project.  On 30 June 2025 we announced that the offtake agreement had been signed.  The key terms of the agreement are as outlined below:

·    The offtake agreement finalised for 100% of spodumene concentrate produced by the DMS processing plant at Bougouni to be purchased by Hainan.

·    The initial offtake agreement is for a four-year term with the commencement date set at the receipt of the Mali Government export permit.

·    Spodumene concentrate price to be referenced to the Shanghai Metals Market published price for 6% spodumene concentrate, which is a cost, insurance and freight ("CIF") price for delivery in China.

·    The final price received by LMLB takes into consideration price adjustments based on grade and quality of material delivered and a calculated conversion of the free-on-board price to CIF price at the loading port in West Africa.

·    The offtake agreement pricing will be subject to a floor price.  The floor price for the initial period of export is suspended and the parties are negotiating an agreed floor price to take effect from 1 January 2026.

·    Parties to agree an annual quantity and schedule with an expected minimum of 8,000 wet metric tonnes to be shipped each month.

·    LMLB will receive an initial payment upon loading of a shipping vessel with spodumene concentrate at the export port in West Africa equivalent to 95% of the value of the shipment, with the remaining 5% due on delivery and confirmation in China.

·    The offtake agreement is a "take or pay" agreement where LMLB must supply the spodumene exclusively to Hainan, and Hainan must purchase and take delivery of, or pay for, an agreed annual quantity.

·    A procedure for sampling, assay and weighing of the spodumene concentrate will be completed at the mine site upon departure from Bougouni, at the loading port prior to loading and final confirmation at the destination port in Hainan. 

·    The product quality required has been specified for Li₂O content, levels of iron impurity and moisture content and these items will be measured in the sampling procedures.

·    The offtake agreement provides for dispute resolution should variations in the assay grade and weight arise.

Bougouni Community Relations

Strong relations with the Malian government are key to our success at Bougouni. KMUK's management team in Bougouni hosted a delegation from the Department of Mines on 3 April 2025, who were accompanied by two special advisers of the President of Mali. The delegation requested and were provided with a tour of the site, along with a presentation advising the status of the Project, and a demonstration of KMUK's commitment to prioritising local Malian suppliers and personnel.

KMUK was able to highlight the local content achievements and demonstrated the high percentage of local contractors and labour engaged at the Project site. At the year end, out of a total workforce of 608 at the Bougouni Lithium Project (including contractors), 573 were Malian (94%).   Amongst that number, we are pleased to report that a total of 292 were recruited from the local community.

Our positive engagement with the local community in Bougouni is crucial to the ongoing success of the Project, and I am delighted with our team's continued work over the past twelve months.  Kodal continues to support key local infrastructure requirements and during the year we have collaborated on a number of initiatives, including the replacement of the local solar-powered water pump, which supplies water to Ngoualana Village (near the Bougouni Project) and our ongoing sponsorship of the teacher at the Kola-Sokoura primary school.  Further information on our community engagement activities is given in our ESG report on page 22.

Market Outlook

Lithium prices are anticipated to stabilise in 2025/26 following a significant downturn over the past two years. Lithium spodumene concentrate 6% ("SC6") pricing began to show signs of stabilising in early 2025 to ranges ot $850-900/Mt following a relatively depressed performance during 2024.

China's electric vehicle market, bolstered by government subsidies, is expected to drive demand through 2025 and analysts predict a supply deficit by 2026, which could exert upward pressure on prices.  Canaccord Genuity, the Group's joint broker, is forecasting a lithium SC6 price of US$1,000 per tonne for Q1 2026. 

Kodal Minerals Gold Assets

Kodal retains a portfolio of gold focussed exploration assets in Mali and Côte d'Ivoire. Kodal's management has continued to review the projects with a particular focus on the legal ownership, the age of concessions and prospectivity and ensures that all government compliance, reporting and fees are kept up to date and that future expenditure on the projects is in line with the Company targets.

Exploration Concession Review

The Company's gold projects have been reviewed, and the table below contains the assets on which the Company will focus future exploration activity in Mali and Côte d'Ivoire.

Table of Concessions - Kodal Gold Concessions in West Africa:

The licences in Côte d'Ivoire remain in good order, however they have been extended beyond their usual term and there is therefore a risk that further renewals will not be granted.  As a result of delays in permitting from the Forestry Commission we have been unable to progress exploration in our Ivorian projects.  As a result, we have assessed that we should make a provision against those licences and an impairment of £641,000 (2024:  £1,572,000) has been recognised in the year. 

Gold Exploration Strategy

Following the US$17.75 million investment by Hainan in Kodal in November 2023, Kodal remains well funded to undertake the necessary exploration at the Fatou prospect to advance this project towards maiden minerals resource estimates.  Kodal's exploration geologists have visited the Fatou sites during the year and developed an exploration targeting assessment to finalise planning of the exploration programmes.

Previous exploration at the Fatou project completed between 2009 and 2014 targeted limited areas of artisanal workings and concluded an historical resource estimate of approximately 350,000 ounces of gold.  Kodal geologists have outlined additional extensions to the historic exploration drilling as well as identifying new priority areas.  The Group has completed one exploration drilling programme that returned drill intercepts of 23m @ 1.63 g/t Au from 82m, and 6m @ 1.49 g/t Au from 40m. 

Conclusion

The year to 31 March 2025 saw Kodal's transition from explorer to producer of high quality spodumene concentrates and I look forward to reporting on commercial operations at Bougouni.

Finally, I would like to recognise the important contributions of all our stakeholders and partners this year and thank them for their support. Along with them, I look forward to our continued progress and success.

Bernard Aylward

Chief Executive Officer

28 August 2025

FINANCE REVIEW

Results of operations

For the year ended 31 March 2025, the Group reported an operating loss of £2,446,000, including share-based payment costs of £217,000 (2024: £242,000) and impairment of exploration and evaluation assets of £641,000 (2024:  £1,572,000), compared to a loss of £3,344,000 in the previous year. 

During the year, the Group invested £133,000 (2024: £2,971,000) in exploration and evaluation expenditure on its Gold projects.   Following the impairment review and after taking account of the effects of foreign exchange , the carrying value of the gold projects in Mali and Côte d'Ivoire decreased from £2,162,000 to £1,623,000. 

Kodal continues to hold significant influence over Kodal Mining UK Limited ("KMUK") and is able to participate in the financial and operating decisions of KMUK through its two appointed board members.  As a result, KMUK is recognised as an associate by Kodal and Kodal's share of the profit or loss of KMUK is shown in the consolidated statement of comprehensive income. The value of Kodal's investment in KMUK as at 31 March 2025 was £21.4 million (2024: £31.2 million) and its share of KMUK's loss for the period was £9.0 million (2024: £84,000).  KMUK's loss for the year included the one-off payment of US$15m to the State of Mali under the MoU.

For the year ended 31 March 2025, the Group reported a currency translation loss of £1,075,000 (2024: £3,000 gain). This arose primarily on the carrying value of the Group's 49% share of the net assets of KMUK which are denominated in US Dollars.

During the year, the Group reported interest income of £247,000 on its cash deposits (2024: £28,000), in addition to accrued interest of £166,000 on its loan balance with KMUK (2024: £65,000).

Cash balances as at 31 March 2025 were £16,888,000, an increase of £561,000 on the previous year's level of £16,327,000.  Net assets of the Group at the year end were £45,584,000 (2024: £57,430,000).

Financing

During the year, the Company has raised £24,000 from the exercise of warrants in May 2024 and the repayment of loans.

Going concern and funding

The Group is still in the exploration and development phase of its business and the operation of the Group are currently being financed by funds which the Company has raised from the issue of new ordinary shares and the  repayment of loans.

The Directors have prepared cash flow forecasts for the period ending 31 March 2027.  The forecasts include additional exploration expenditure for the Group's gold assets, as well as covering ongoing overheads and the potential requirements for shareholder funding of KMUK.  The forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further financing.  As at 28 August 2025, the Group had cash at bank amounting to £15,929,000.  Accordingly, the financial statements have been prepared on a going concern basis.

Utilising key performance indicators ("KPIs")

The following KPIs are used by the Group to assist it in monitoring its cash position and assessing costs and exploration and development activities:

The directors have provided more information on the state of the Group's financing and operational activity above.

a.   'Cash and cash equivalents' is used to measure the Group's financial liquidity.  Cash and cash equivalents have increased by £561,000 in the year as a result of the partial repayment of loans by KMUK, offset by administrative expenses and exploration and evaluation expenditure.

b.   'Administrative expenses' is used to measure the Group's administrative costs and operating results.  In 2024, 'Administrative expenses' monitored as a KPI above excluded one-off legal fees relating to the Hainan funding transaction. 'Administrative expenses' for the year were £1,588,000, an increase of £199,000 on the comparable figure from previous year.   Group corporate activity in the UK has remained similar to last year and the Group has continued to run the offices in Mali and Côte d'Ivoire.

c.   'Exploration and evaluation expenditure' is used to measure expenditure on the Group's gold projects.  Exploration and evaluation expenditure in the year was £2,838,000 lower than prior year.  In prior year, investment in the Bougouni Lithium Project continued until November 2023 when ownership of the Project was transferred to KMUK.  Expenditure after that date focussed on the Group's gold assets which has continued at a lower level.

As the Bougouni Lithium Project entered the development phase, KPIs were used by the Board to assist in tracking progress in the development of the plant, including monitoring performance against the production timetable and forecast construction spend.  Construction of the stage 1 DMS plant was successfully completed within the US$65m budget and first lithium spodumene concentrate product was achieved within forecast timescales in February 2025.

Going forward, as Bougouni enters commercial production, additional KPIs will be adopted by the Board to assist in tracking KMUK's operational performance, including:

·    Mining and Production targets in line with nameplate capacity of plant and achieving 10,000t of spodumene concentrate per month

·    Targeting cost of production to be in lowest quartile compared to a range of producing mines and operations

·    Health, Safety and Environmental management with a focus on ensuring best management practice of the operation and ensuring safety of all workers involved in our operations

·    Future Development of the Bougouni Lithium project through the expansion of the Mineral Resource and Reserves. A key target is the review and development of a stage 2 flotation plan feasibility assessment.

Financial risk management objectives and policies

The Group's principal financial instruments comprise cash and trade and other payables.  It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's exploration and operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures that the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches as required to provide sufficient cash resources to manage the activities through to revenue generation.

Price risk

The Group is exposed to fluctuating prices of commodities, including lithium and gold, and the existence and quality of these commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as development of the projects continues and will consider how this risk can be mitigated as development of the projects continues.  In particular, for the Bougouni Lithium Project, the Company and KMUK remain exposed to fluctuations in the price of spodumene for which there is little opportunity to mitigate price risk through forward sales or other financial instruments.

Foreign exchange risk

The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling, CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to keep this under review.  The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.

Principal risks and uncertainties

The Group is exposed to a number of risks which it seeks to mitigate as set out in the table below:

S172 Statement

The Directors of the Company have a duty to promote the success of the Company and confirm that in discharging that responsibility they have regard to the matters as set out in Section 172(1) (a) to (f) ("s172") of the Companies Act 2006. As outlines in s172, a director of the Company must act in the way they consider, in good faith, to promote the success of the Company for the benefit of its members, and in doing so have regard (amongst other matters) to:

•        the likely consequences of any decision in the long term;

•        the interests of the Company's employees;

•        the need to foster the Company's business relationships with suppliers, customers and others;

•        the impact of the Company's operations on the community and the environment;

•        the desirability of the Company to maintain a reputation for high standards of business conduct; and

•        the need to act fairly between members of the Company.

The Directors are committed to developing and maintaining a governance framework that is appropriate to the business and supports effective decision making coupled with robust oversight of risks and internal controls.  The Board is committed to high standards of social responsibility and to managing the Company's affairs in an honest and ethical manner, as further discussed in the Corporate Governance Report. We strive to apply ethical business practices and to conduct business in a responsible and transparent manner.

The Board believes that long-term success requires good relations with a range of different stakeholder groups, both internal and external, and recognises the importance of open and transparent communication with each of our stakeholder groups to enable an understanding of their individual interests and needs.  In evaluating strategic opportunities, the likely consequences of any decision for each stakeholder group in the long-term are always considered, together with the potential impact on long-term shareholder value.

The board has identified Kodal's stakeholders to include employees and consultants working for the Company, the local communities and governments in Mali and Côte d'Ivoire in which it operates, suppliers and contractors, as well as shareholders.  With the Bougouni Lithium Project now fully funded in KMUK and in construction, the relationships with our capital equipment suppliers, local contractors and workforce and our operating partner Hainan are of particular importance.

In the UK, the Group is managed by its Directors and a small number of employees, with the input of a limited number of consultants, and therefore the views and interests of the UK workforce are always considered in all decision-making.

In the Corporate Governance Report, we explain the regular engagement with employees, communities and local governments in West Africa where we operate; and the impact assessment we have performed on the environment and local society as part of our permitting process. We also comment on the decision-making for the long-term success of the Company, its governance and culture; as well as the nature and methods of communication with all shareholders.  

The local stakeholder voice is brought to the attention of the Board through the Operations Director who spends much of his time in Mali, in addition to the Chief Executive Officer visiting on a frequent basis.  Together with the Malian Country Manager and HSE Manager, we meet regularly with local workforce and contractors, mining officials and ministers, as well as local leaders from the communities.  All local views and concerns are fed back to Board meetings, which enables the Directors to understand the impact of our strategic decisions and how we might best address local needs. As a mining company, the Board understands that recognising the potential impact our operations may have on the community and the local environment is essential to underpinning our social licence to operate. In making decisions about both Bougouni and our other West African projects, we seek to maximise the benefits to the local community, while minimising negative impacts.

The Group relies heavily on having suppliers and contractors with appropriate levels of experience and expertise of working successfully with junior miners in West Africa, as well as professional advice for AIM quoted companies in London. Accordingly, Kodal is committed to maintaining constructive relationships with all its suppliers and advisers and operating in line with its Corporate Code of Conduct.

Signed on behalf of the Board

Bernard Aylward

Chief Executive Officer

28 August 2025