Mali Lithium rises A$70m to acquire Morila Gold

Mali Lithium Limited (MLL) has announced that it has obtained binding commitments from institutional and sophisticated investors for a capital raising of A$64 million. In addition, the Company will offer existing eligible shareholders an opportunity to participate in the fund raising under an A$6 million Share Purchase Plan (SPP).

The Company received strong support from existing major shareholders and a range of new institutional investors, including a strategic investment from leading West African gold miner, Resolute Mining Limited.

Mali Lithium Executive Chairman, Dr Alistair Cowden, commented: “We are delighted with the support from institutional and sophisticated investors and in turn the strong endorsement of the Morila Gold Mine acquisition. We welcome our new shareholders and are very appreciative of the support that our existing shareholders continue to provide.

“We are particularly pleased to welcome Resolute Mining Limited as a shareholder. Resolute are a leading West African focused gold miner who have successfully operated the nearby Syama gold mine in Mali for more than a decade. The opportunity to develop a strategic partnership with Resolute in Mali will be investigated in the coming months.

The acquisition of Morila represents a watershed moment for the Company. In becoming a gold producer with a significant Mineral Resource base, Mali Lithium intends to build shareholder value through near term production growth and increasing mine life. This fund raising is an important step in the process as it enables the completion of the acquisition of Morila.”

Use of Funds Funds raised via the Placement and SPP will be applied to the acquisition of an 80% interest in the Morila Gold Mine (Morila) announced on 31 August 2020, amounting to US$22-27 million subject to adjustments at closing (MorilaTransaction).

Funds raised in excess of the Morila Transaction purchase price will be applied to the following growth activities:

• completion of a new mine plan (Resources, Ore Reserves, schedules and costs);
• drilling to infill and extend resources;
• the re-start of open pit mining, initially at the N’Tiola and Domba satellite pits;
• plant and infrastructure works, principally tailings dam and power station;
• preparation for a re-start of mining at the Morila pit (dewatering and earthworks);
• preparation of a mining permit for the Company’s Koting discovery; and
• general working capital.

After completion of the Morila Transaction, the Company will apply cash flow from the existing tailings operation and satellite pit mining to fund its growth activities.

Mali Lithium has been an active gold explorer in Mali, Africa’s third largest gold producer, since 2011. In August 2020 it agreed to acquire, subject to conditions, an 80% interest in the Morila Gold Mine. The State of Mali owns 20%.

The acquisition is expected to close by the end of October2020. Morila is an operating gold mine and has a 4.5 million tonnes per annum processing plant and all infrastructure required for a remote mine site.

The hard rock open pit Inferred Mineral Resource at Morila is 1.3 million ounces of gold and there is standout potential to materially increase those resources. Morila has produced over 7.4 million ounces of gold from open pit mining and processing of stockpiles and tailings over 20 years of Barrick/AngloGold ownership.

Hydraulic mining and processing of tailings is providing immediate modest cashflow and the company is investigating supplementing gold production from tailings with open pit mining in 2021 from Morila, its satellite pits and the Company’s Koting discovery on its adjacent Massigui Project.

The tailings Mineral Resource is 4.8million tonnes at 0.5g/t goldfor 76,000 ounces of contained gold. Exploration will focus on growing the Morila resource, defining resources at the Morila satellite pits and the Koting discovery and testing multiple high value targets on the 685km2 of combined tenure.

In 2016 the Company acquired the Goulamina Lithium deposit and subsequently defined resources and reserves to support a 2018 Pre-Feasibility Study. The study described a 16 year operation that can produce 362,000 tonnes per annum of 6% LiO2 spodumene concentrate.

All permits for development have been secured. A resource update was recently announced in August 2020 with 109 million tonnes at 1.45% Li2O with 1.57million tonnes of contained LiO2 making Goulamina one of the world’s largest ready to develop lithium deposits.

A Definitive Feasibility Study (DFS) is targeted to be completed this month. The Company will explore options to realise value for this exceptional asset upon completion of the DFS.