Mali Lithium

Owner of the world’s largest uncommitted hard rock lithium reserve

 


 

Despite its name suggesting a focus on just one commodity, Mali Lithium is pursuing a dual strategy in lithium and gold within Mali in West Africa. The ASX-listed firm originally owned gold assets under the name Birimian Gold, but in 2016 – when the lithium boom was just beginning to ramp up – Mali Lithium discovered outcropping lithium pegmatites in the Bougouni region of Southern Mali. The company soon established the Goulamina Lithium Project and has spent the last two and a half years focusing on the prospective area, completing a pre-feasibility study (PFS) in mid-2018. A year later, the company accordingly changed its name to Mali Lithium. That being said, Mali Lithium maintains several exciting gold tenements in Mali, which is Africa’s third largest gold producer. 

 

The senior management team has had a reasonable turnover in the last couple of years,” says managing director Chris Evans. In fact, we now have a team of specialists who have had significant previous experience in the lithium market. 

 

Prior to joining Mali Lithium, Evans was COO of Altura Mining and helped build its Pilgangoora Mine in Western Australia alongside Marc Rowley, who now also works for Mali Lithium as project director. Mali Lithium’s process manager Walter Madel is another team member that has joined in the last 18 months with history in WA’s lithium sector. 

 

Pre-feasibility study 

 

Mali Lithium’s 100%-owned Goulamina project comprises of a land holding of 100 km in the region of Bougouni, approximately 150 km by road from Mali’s capital, Bamako. After RC and diamond drilling identified several spodumene-bearing pegmatites, the company published a PFS for the project in July 2018. 

 

The PFS revealed Goulamina to be the world’s largest uncommitted hard rock lithium reserve, with 31.2 million tonnes (Mt) of ore in reserve at a grade of 1.56% lithium oxide. Other metrics included a 16-year life of mine (LoM) with 362,000 tonnes per annum average production at 6% spodumene concentrate.  

 

The LoM annual average EBITDA was estimated at US$128 million per annum against an AISC of US$319 per tonne of concentrate, although Mali Lithium has been working on ways to optimise the project’s financial and operational metrics ahead of a definitive feasibility study (DFS) due out in May 2020. 

 

“We already have a fantastic resource and reserve and I believe we can further optimise them to create more certainty. We have some of our JORC resource in the indicated and inferred category, and we want to drag some of that into the measured. 

 

Mali Lithium is also planning to make infrastructural optimisations in the critical areas of power, water and the nearby road networks. Any savings made in these areas will reduce the company’s operational costs in the DFS, which will be delivered by international engineering and project delivery group Lycopodium. 

 

Final project approval 

 

The Goulamina project obtained a full mining permit – and thus final approval – from the Malian government in August last year, just three months after Mali Lithium was awarded an environmental permit. This quick turnaround reflects the relative ease of doing business in Mali’s mining sector. 

 

“Working with the Malian government has been an absolute pleasure because they have a very clear mining code that is very easy to understand with and has short permitting times. We received our environmental permit four months after submitting it and later received our mining permit soon after submission” 

 

A long-established gold industry in Mali means that the Ministry of Mines is staffed with mining professionals who operate at a high standard. This puts the country in strong stead as the mining sector looks to diversify away from gold and into next-gen metals like lithium. 

 

Notably, Mali Lithium is set to be at the vanguard of Mali’s expanding mining industry, as the Goulamina project is the first major development to be granted a full permit outside of the gold sphere in recent times, according to Evans.  

 

“Having a full mining permit is probably the most significant milestone we’ve had to date on the project. Now we are fully permitted, with the right funding and partner in place we could start building our mine tomorrow. 

 

Chinese partners 

 

Back in December 2018, Mali Lithium signed a letter of intent with CRIMMa division of China Minmetals Corporation, relating to the potential EPC construction of the Goulamina project. State-owned China Minmetals is the largest Chinese-owned mining company and has a long history of expertise in lithium processing and product marketing. 

 

China Minmetals expressed interest in our project at that point because of its size and China’s need for lithium projects in the futureThey signed the letter of intent to investigate EPC construction of our project, but on the back of that they want to look at offtake and potential funding options. 

 

China Minmetals has spent the last 12 months reviewing and analysing the PFS and conducting specialist testwork on the Goulamina ore at its laboratory in Changsha, Hunan province.  

 

In the last quarter of 2019, Mali Lithium announced positive results from its recent metallurgical testwork in cooperation with CRIMM, in that the Goulamina ore had achieved its target of 6% spodumene concentrate grade, along with an improved lithium recovery rate of 87%. 

 

In addition, Mali Lithium has previously had a small sample of its 6% concentrate converted into lithium carbonate for the downstream battery market. 

 

We made 99.9% concentrate on a one-off unoptimised run, which is quite remarkable and shows that our product is amenable to battery grade chemical conversion. It also showed our product is low in key deleterious elements iron and mica.” 

 

Mali Lithium has since commenced a scoping study with global engineering firm Hatch for the downstream processing of its spodumene concentrate from Goulamina. The standalone study will assess the prospect of producing intermediary products lithium sulphate and lithium oxide ahead of final conversion to battery grade lithium chemicals. The study should be completed by May. 

 

More recently, Mali Lithium signed a deal with Chinese civil contractor CHICO for early contractor involvement (ECI) at the Goulamina project. The agreement, signed in October last year, will see CHICO price the project’s operational and capital costs to compare against the DFS. 

 

“CHICO is an experienced contractor who is currently constructing and operating in a number of West African countries. The mutual benefit that this relationship will bring to each of our organisations will be significant, said Evans following the announcement. 

 

The gold portfolio 

 

Turning to the other half of the portfolio, Mali Lithium had in place a joint venture with Barrick Gold covering two highly prospective gold-producing tenements in the Massigui area of Southern Mali. Barrick mined the tenements during 2018-19 and subsequently paid AUS$4.5 million in royalties to Mali Lithium until June last year. 

 

It was fantastic having those royalties come in last year. Now we want to create some more value out of those gold tenements and we have since done lots of drilling near the Viper and N’tiola tenements and therefore also near Barrick’s Morila mine. 

 

One specific area of interest for Mali Lithium within the Massigui project is the Koting deposit. London-listed Capital Drilling were deployed to conduct 12 RC drill holes for a total of 1,600 metres at the deposit in October 2019.  

 

The subsequent assay results were deemed highly encouraging, with significant intersections including four metres @ 11.1 g/t gold from 100 metres, 12 metres @ 8.92 g/t gold from 63 metres and one metre @ 13.80 g/t gold from 140 metres. 

 

Evans also reveals that the company is currently having ongoing discussions with Barrick about a continuing arrangement with the Morila mine and processing facility. 

 

Pole position in the lithium race 

 

After Mali Lithium raised AUS$4.23 million in a renounceable rights issue in October 2019, the company is well-cashed up to continue its exploration activities at its gold tenements, along with resource drilling at the Goulamina project. 

 

“We think we are going to be extremely wellpositioned over the next 12 months in terms of our flagship Goulamina project. We are the largest uncommitted hard rock lithium project in the world, and we will soon have completed our DFS. 

 

“We also have a team with major experience in developing lithium projects and on the flip side, we have some gold tenements that can potentially create value for shareholders.