Oversubscribed Placing to Raise £3.5 million

Certain information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulations. 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

 19 March 2021

Kodal Minerals plc ('Kodal Minerals' or the 'Company')

Placing to Raise £3.5 million to Advance Development and Exploration Activities at Priority Gold Assets and Flagship Bougouni Lithium Project,

and Exercise of Warrants

Kodal Minerals, the mineral exploration and development company focused on gold and its Bougouni Lithium Project in West Africa, is pleased to announce it has raised £3,500,000 million (before expenses) via a placing, which was oversubscribed, of 2,800,000,000 new ordinary shares of 0.03125p each in the capital of the Company ('Placing Shares') at a price of 0.125 pence per Placing Share (the 'Placing').  The funds raised will support Kodal in undertaking exploration, drilling and development activities at its priority gold assets in Mali and Cote d'Ivoire, as well as advancing its flagship Bougouni Lithium Project ('Bougouni') in Mali which is awaiting the grant of a mining licence. The Placing Shares are expected to be admitted to trading on AIM ('Admission') on 25 March 2021.

Use of Proceeds

The net proceeds of the Placing will be used by the Company for additional working capital and to explore priority targets in its suite of gold projects which have been identified for the potential to define JORC compliant mineral resources quickly as well as having potential to host large scale gold mineralisation.  The priority exploration targets for this exploration campaign are:

·    Fatou gold project in Mali - drilling at the Fatou Main prospect where historic exploration defined a NI43-101 mineral resource estimate exceeding 350,000oz gold.  The drilling will aim to confirm and expand the known gold mineralisation and provide data to support completion of a JORC compliant mineral resource estimate. 

·    Nielle gold project in Cote d'Ivoire - now wholly owned by Kodal following the end of the joint venture with Resolute Mining Ltd, where exploration completed previously by the joint venture has defined an extensive zone of gold mineralisation with positive initial drilling results.  The mineralised zone remains open along strike and at depth and Kodal's initial drilling programme is designed to confirm and extend the mineralised zone and provide confidence in the geological interpretation prior to undertaking a maiden mineral resource assessment.

·    Dabakala gold project in Cote d'Ivoire - exploration activity completed by Kodal continues to confirm a major surface geochemical anomaly with assay results up to 6.14g/t gold returned.  This new anomaly has never been previously drill tested and Kodal will focus on infill geochemical sampling to define the key targets for reconnaissance drill testing.

·    Bougouni Lithium Project in Mali - Following the expected grant of a mining licence by the Malian government, funds will be used to advance the Bougouni Project into production.  Proceeds from the Placing will allow the Company to continue the review of engineering, processing and funding requirements for the project.  

Memorandum of Understanding ('MOU') with Sinohydro Corporation Limited ('Sinohydro')

As announced on 1 September 2020, the Company has entered into a MOU with Sinohydro, a specialist engineering and construction contractor, to work together to develop the Bougouni Lithium Project. Progress under the MOU has been affected by travel restrictions due to the Covid pandemic which have prevented site visits from Sinohydro employees and other specialists and also by the political situation in Mali which has delayed the issue of the mining licence. The exclusivity period for Sinohydro under the MOU has now ended, but the parties have expressed a desire to continue working together and Kodal will also consider other potential consultants and partners to deliver the best outcome for the project.

Term sheet for Convertible Loan Note facility

On 5 March 2021, the Company announced that it was continuing discussions for potential funding of its gold projects through a $2.5m convertible loan note facility with Riverfort Global Opportunities plc and Riverfort Global Opportunities PCC and a non-binding term sheet had been signed in this regard, and which was first announced on 17 December 2020 (the 'Term Sheet').  The Board of Kodal has decided to proceed with the Placing instead of the funding proposed by the Term Sheet and therefore discussions on that proposal have ended.  The $300,000 advance to the Company under the Term Sheet will now fall due for repayment by the Company on 31 October 2021, for which existing cash resources will be used.

Bernard Aylward, CEO of Kodal Minerals, commented: "We are delighted with the fantastic support we have received in undertaking this significantly oversubscribed placing for £3.5 million.  The fundraise puts us in a strong position to be able to focus on carrying out further exploration work across our portfolio including drilling campaigns at our priority gold assets, Fatou, Nielle and Dabakala.  Crucially, the Placing funds will be deployed to help bring the Bougouni Lithium Project into production post grant of a mining licence by the appropriate authorities, and I am very much looking forward to being able to announce this development in due course.

"As our shareholders will be aware, as a Company we remain bullish with regards to the lithium market thanks to the vital role it has to play in achieving a greener future.  At Kodal, we are excited to be playing our own part in the global effort that is driving the planet towards a more sustainable and environmentally friendly future.  I firmly believe that Bougouni is ideally positioned to take advantage of the anticipated lithium supply deficit, predicted for 2023/4, caused by too few lithium projects coming on stream to match the growing rate of demand.  I look forward to providing further updates in due course."

Details of the Placing

The Placing will result in the issue of 2,800,000,000 new ordinary shares of 0.03125p each in the capital of the Company, representing approximately 17.9 per cent. of the Company's issued ordinary share capital as enlarged by the Placing. The Placing Shares will be issued at a price of 0.125p each.

Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that their admission to AIM will take place on or around 25 March 2021. The issue of the Placing Shares is conditional upon, inter alia, Admission occurring. 

The Placing Shares, when issued and fully paid, will rank pari passu in all respects with the Company's existing Ordinary Shares, including the right to all dividends or other distributions declared, made or paid after the date of issue of the Placing Shares.

The Placing Shares will be issued utilising the Company's existing share authorities to issue new shares on a non-pre-emptive basis.

Exercise of warrants

Following the receipt of two Warrant Exercise notices, the Company has allotted a total of 80,355,664 new ordinary shares of 0.03125p each in the capital of the Company (the 'Warrant Shares').  Pursuant to the original Warrant Instruments dated 14 July 2020 and 27 October 2020, the warrants have exercise prices of 0.61 pence and 0.90 pence per Warrant Share.  As a result, the amount raised by the exercise of the warrants totals £58,170.99.  The Warrant Shares will rank pari passu in all respects with the existing Ordinary Shares of the Company. Application will be made for the admission to trading on AIM of the Warrant Shares.  Admission of the Warrant Shares is expected on or around 25 March 2021.

Total Voting Rights

Upon Admission of the Placing Shares and the Warrant Shares, the issued share capital of the Company will consist of ordinary Shares of 0.01325p eah. The Company holds no shares in treasury. The total number of voting rights in the Company from Admission will therefore be 15,732,363,511. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in or a change to their interest in the Company under the Disclosure Guidance and Transparency Rules of the UK Financial Conduct Authority.

AIM Rule 17

In accordance with AIM Rule 17, the Company announces that the beneficial interest of Suay Chin International Pte Ltd in the Company remains unchanged at 2,290,471,568 Ordinary Shares but upon Admission will represent 14.56 per cent. of the Company's then issued share capital.

**ENDS**

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