Shares of Kodal Minerals PLC (LON: KOD) surged 70% higher despite not making any significant announcements today amid speculation about its Boughuni Lithium Project.
The spike could be related to a research report released yesterday indicating that global demand for lithium was rising, while the supply side remains primarily constrained.
The high demand for lithium sets the stage for rising prices as suppliers struggle to meet demand from manufacturers driven by the rollout of 5G devices powered by Lithium batteries.
Today’s rally can adobe attributed to speculation that the mining company’s application for a mining license in Mali is finally being approved.
Kodal Minerals had applied for a mining license for its flagship Bougouni Lithium Project located in Southern Mali in Q1 2020, which is yet to be approved; hence, the company cannot start mining operations onsite.
The Boughuni project has significant lithium resources, as confirmed by the JORC Mineral Resource data, which positioned the project among the top 15 projects in the world.
The company’s management team seems confident that its license applications will be approved. Still, investors have been growing impatient, given that it’s been a year since the application was submitted to the Mali government.
Kodal Minerals has raised funds from its leading financier Riverfort Global Opportunities PCC Ltd to the tune of close to £4 million, having raised an initial £1.5 million followed by the recent agreement for up to $2.5 million in funding from the same source.
We are still waiting for the company to confirm the speculation, but this has not happened yet. The shares could fall drastically if Kodal affirms that it is yet to receive the long-awaited mining license.
Kodal Minerals share price.
Kodal Minerals share price soared 70% to trade at 0.17p, having rallied from Monday’s closing price of 0.1p.
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