Leo Lithium (ASX:LLL) has secured the first funds from an equity investment with GFL International (Ganfeng), which has committed to sole funding US$137.2 million for the Goulamina Lithium Project in Mali.
This funding comes despite Leo Lithium’s ongoing ASX suspension, with company shares having been in limbo for all but two weeks since 18 July 2023.
In any case, Leo notes that project construction is underway, and first production is still targeted for H1 2024.
The lithium hopeful says its agreement with Ganfeng — and the fact that it has now received its first funds — ‘cements Leo Lithium’s relationship with China’s largest lithium producer and demonstrates Ganfeng’s solid commitment to the project’.
Leo first requested a suspension of its shares back in July, citing the need for correspondence with the Mali government.
After more than a month, shares finally began to trade again in early September as the company confirmed that the Mali government’s suspension on direct shipping ore (DSO) from Goulamina would not delay ‘any aspect’ of the spodumene project.
However, 2 weeks later, trading was halted again.
On 19 September, Leo Lithium requested to suspend trading again under ASX Listing Rule 17.2 due to a pending announcement in relation to correspondence from the Mali government and the application of the 2023 Mining Code to the Goulamina project.
Then, on 3 October 2023, Leo Lithium’s suspension was extended under Listing Rule 17.3 due to ‘failing to respond to ASX queries adequately’.
The ASX stated that the company would remain suspended until a response was made to the queries.
As previously reported by Leo on 4 September, Ganfeng will fund the project’s capital costs via staged direct cash injections into the Goulamina holding company Mali Lithium BV (MLBV) in exchange for an additional 5% interest in MLBV.
Upon completing the equity investment, Leo Lithium’s interest in Goulamina via MLBV will be 45% and Ganfeng’s interest will be 55%.
Leo will remain the operator/manager of the joint venture and will remain responsible for ordinary course business decisions.
The structure of the equity investment agreement into MLBV is the same structure as the initial equity investment of US$130 million by Ganfeng into MLBV when Ganfeng received all regulatory approvals and the joint venture began in 2022.
Leo Lithium is an ASX-listed company focused on developing the Goulamina project in Mali.
As of 30 September 2023, the company had $66.853 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Leo Lithium