Leo Lithium Limited
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How Has Leo Lithium Progressed at the Goulamina Lithium Project in Q4 2023?
Leo Lithium Limited: Progress and Challenges in Q4 2023
Leo Lithium Limited, a key player in the lithium mining industry, has released a comprehensive report for the quarter ending 31 December 2023. Despite being in suspension, as previously announced, the company has shown notable progress in its Goulamina Lithium Project, along with significant corporate developments and strategic partnerships.
Goulamina Lithium Project: A Global Contender
World-Class Deposit: Leo Lithium’s Goulamina is recognized as the world’s fifth-largest spodumene deposit, marking its significance in the global lithium market.
Safety Milestones: The project team achieved over 3 million hours of work without a lost time injury, showcasing the company’s commitment to safety standards.
Mining and Construction: The quarter saw the mining of 549,000 bulk cubic meters of material, driven by a workforce of 1,800. The construction and mining activities have reached about 60% completion, a 15% increase from the previous quarter.
Operational Readiness
Commissioning and Planning: The initial commissioning team was mobilized, and operational readiness planning commenced, indicating the project’s transition to the next stage of development.
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Corporate Developments: Strategic Partnerships
Ganfeng Collaboration: The partnership with Ganfeng, China’s largest lithium producer, strengthened with the execution of a US$137. 2 million Equity Investment Deed (EID), and the first funds of US$12. 4 million were received. This collaboration positions Leo Lithium for significant growth in the lithium market.
Financial Health
Cash Reserves: Leo Lithium held A$33. 6 million, and the Goulamina JV held US$9. 2 million as of 31 December. The final US$30 million debt was drawn down under the Ganfeng US$40 million debt facility.
Managing Director’s Insights
Simon Hay, the Managing Director, expressed continued engagement with the Mali Government to reach a constructive resolution. He emphasized the company's relationship with Ganfeng and the operational progress made in the quarter, aiming to become West Africa’s first spodumene producer.
Project Operations in Detail: Mining and Construction Highlights
Mining Contractor: Corica Mali continued mining at the Starter Pit, contributing to the project's progress in line with pre-production estimates.
Construction Update: Significant advances in civil, mechanical, and electrical installation were reported, with critical path activities like steel fabrication being closely monitored.
Environmental, Social, and Governance Commitments
Leo Lithium showcased its dedication to responsible mining practices, focusing on community development and environmental stewardship in Mali. The company has completed a water supply project in Goulamina village and is actively engaged in other community-supportive initiatives.
Financial Overview: Equity Investment and Funding
Equity Investment Deed: The US$137. 2 million funding from Ganfeng will significantly bolster the Goulamina JV, with Leo Lithium’s stake adjusted to 49. 5%.
Debt Facility Utilization: The completion of the US$40 million debt facility drawdown from Ganfeng indicates robust financial management.
Cash Movement and Expenditure
JV Expenditures: The Goulamina JV saw major cash outflows for project development, including payments for government import duties and taxes.
Company Expenditures: Leo Lithium incurred exploration and development costs, with reimbursements from the Goulamina JV expected in the following quarter.
Leo Lithium Limited’s quarterly report for Q4 2023 illustrates a company making strides in project development, securing strategic partnerships, and maintaining a strong commitment to safety and community development. Despite facing challenges, the company is poised for significant growth and contributions to the global lithium market.
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