Australian explorer Leo Lithium is set to sell five per cent of its West African Goulamina lithium project to GFL International (Ganfeng) in a $98 million deal.
The agreement is subject to a settlement with the Mali Government, where the project is located.
The company confirmed it has been progressing towards a potential negotiated settlement, which if reached, would likely require a settlement payment being made to the Mali Government.
Under the sale agreement, Ganfeng will receive an additional five per cent interest in the Goulamina holding company Mali Lithium BV (MLBV).
Post completion of the transaction, Leo Lithium’s interest in Goulamina via MLBV will be 40 per cent and Ganfeng’s interest will be 60 per cent.
An initial $52.7 million will be paid to Leo with the rest of the $98 million to be paid 60 days later, subject to the execution of settlement documentation with the Mali Government.
Leo will remain the operator and manager of Goulamina at the completion of the agreement.
The company said the agreement is further evidence of the strong relationship Leo Lithium has built with Ganfeng, China’s largest lithium producer.
“We are proud to be partnering with Ganfeng, a cornerstone partner of Leo Lithium, and the transaction reiterates their continued endorsement and commitment to Goulamina,” Leo managing director Simon Hay said.
“The project has the potential to become a world class operation, and construction is advancing steadily.”
The deal is a progression of Ganfeng’s equity investment agreement signed last September which saw the company cover $213 million of the Goulamina project’s capital costs.
The Goulamina lithium project comprises a land holding of 100 square kilometres in the Bougouni region of southern Mali.
Its construction remains on schedule for first spodumene concentrate in the second quarter of 2024.
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