The Kodal Minerals PLC (LON: KOD) share price surged 23.4% after announcing it received a $3.5 million prepayment from Hainan Mining Co. Limited as part of the funding package agreed between the two firms and announced on 19 January 2023.
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The funding package signed by Kodal Minerals, Hainan Mining Co. Limited, and its wholly-owned UK-incorporated subsidiary Xinmao Investment Co. Limited allows for the prepayment as the two parties work towards finalising the full funding package.
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Kodal Minerals will have full discretion regarding how to allocate the funds, including further development of the Bougouni Lithium project and for working capital purposes. The Company is also issued an update on restructuring Kodal's subsidiary companies in Mali and advancing the conditions precedent for closing the Funding Package.
Kodal is registering a new company in Mali, Les Mines de Lithium de Bougouni SA (LMLB), and the company will own the Bougouni mining licence. Kodal has also commenced transferring the mining licence from Future Minerals SARL to LMLB as a critical condition precedent for completing the Funding Package.
The prepayment made by Hainan Mining Co. can be converted into new Kodal ordinary shares if the funding package is not completed. However, the firms are confident that the deal will be finalised.
The funding package being provided by Hainan Group includes a US$100 million investment to acquire 51% of the Bougouni project company and a further US$17.75 million subscription for new ordinary shares in Kodal Minerals at 0.5p each.
Bernard Aylward, the CEO of Kodal Minerals, remarked: “We are very pleased to have received the support of the Hainan Group with the Prepayment for some of the subscription agreement, allowing us to continue to advance the Bougouni Lithium project while we work towards completion of the Funding Package. This Prepayment does not add further dilution to our shareholders and confirms the confidence of both parties in being able to finalise the Funding Package. Kodal and our partners, the Hainan Group, continue to work together to progress plans for the development of the Bougouni Lithium Project and are working hard to finalise this transaction to allow construction to commence…”
Kodal Minerals share price.
The Kodal Minerals share price surged 23.37% to trade at 0.586p, from Wednesday’s closing price of 0.475p.
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