Leo Lithium outlines plans to lunge towards spodumene production at Goulamina Project in Mali

Leo Lithium (ASX:LLL) reports development is on track to deliver the first spodumene production in Q2 2024 at its 50% owned Goulamina Joint Venture (JV) Project in Mali. 

As reported in the company’s mid-term review, after declaring a Final Investment Decision (FID) in January 2022, the company began detailed design, procurement, and construction activities at Goulamina in February 2022, and the project is now 20% completed. 

Additionally, Leo reports the project is now more than 50% of the way through the 27-month construction phase. Leo notes it has ‘significantly’ progressed the project since the completion of the DFS in December 2021. 

The company conducted a revised capital cost and reports that given the construction of the project still has a further 12 months to run, an additional contingency of US$25 million has also been included in the capital costs, resulting in an overall increase in capital costs of US$30 million to US$285 million, which is a 12% increase. 

As construction activities at Goulamina increase, the company has costed new plans associated with the operational readiness phase, which is focused on workforce readiness, the ramp up on mining activities, and the beginning of plant commissioning activities to produce the first spodumene. 

Additionally, the company notes this phase is expected to cost an additional US$33 million and is driven by a more comprehensive costed plan for commissioning spodumene production in Mali. 

Commenting on the progression of the project and capital costs, Leo Lithium Managing Director, Simon Hay says: “After conducting a thorough review of the project’s capital costs, expected capital increases were identified due to market conditions and an accelerated mining ramp-up. 

“After conducting a thorough review of the project’s capital costs, expected capital increases were identified due to market conditions and an accelerated mining ramp-up”

These include optimising the stage one plant design to enhance the plant’s performance, making necessary scope changes for stage two, and responding to industry-wide inflationary pressure. 

Despite these cost changes, Leo Lithium remains extremely well-positioned to take advantage of high spodumene prices in the next 3 to 5 years. 

Looking ahead, we are encouraged to see early revenue from the targeted export of direct shipped ore (DSO) by Q4 2023, further demonstrating our commitment to delivering value as a top-tier, low-cost producer.”

The total project capital from FID to the first production in Q2 2024 is expected to be US$318 million. 

Additionally, Leo states there is an early revenue opportunity from DSO, which is confirmed at an expanded 185,000 tonnes, providing ‘significant’ additional early funding. 

Mining activities are set to begin in May 2023 and will supply ore for DSO and the stockpile build ahead of plant commissioning. 

The company adds it is expected that by the end of May 2023, the construction management team will have completed a detailed review of plans based on the productivity of existing contractors and supply vendors. 

In addition, proposed delivery plans will be available for the mechanical and electrical installation contractors. 

The Goulamina Project is a JV project between Leo Lithium and Chinese mining company Ganfeng Lithium Group which holds the remaining 50%. 

The project represents the next lithium project of ‘significant’ scale to enter production and is one of the ‘largest’ and ‘lowest’ capital intensity lithium spodumene projects globally with a stage one capacity of 506,000 dry tonnes per annum. 

Leo Lithium is a pure-play lithium company focused on developing its Goulamina Lithium Project in Mali, West Africa. 

Images: Leo Lithium Ltd
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Written By Aaliyah Rogan
Relocated from the East Coast in New Zealand to Queensland Australia, Aaliyah is a fervent journalist who has a passion for storytelling. When Aaliyah isn’t writing stories, she is either spending time with friends and family or down at the beach.