Leo Lithium has executed an equity investment agreement with Ganfeng, China’s largest lithium producer.
The binding agreement implements the investment structure previously announced on September 4.
The structure will involve Ganfeng solely funding $US137 million ($213 million) of the Goulamina project’s capital costs via direct cash injection into the Goulamina holding company, Mali Lithium BV (MLBV). This is in exchange for an additional 5 per cent interest in MLBV.
Once the equity investment has been completed, Leo Lithium’s interest in Goulamina will be 45 per cent and Ganfeng’s interest will be 55 per cent. It was previously a 50/50 joint venture (JV).
Leo Lithium will remain as Goulamina’s operator and manager and will retain customary minority shareholder protections. Ganfeng has agreed to assist with Mali Government relations associated with the project.
Leo Lithium has also commenced a drawdown of its $US40 million ($62 million) Ganfeng debt facility through its joint venture subsidiary Lithium du Mali SA (LMSA), which was announced in July 2022 to fund Goulamina.
Funds from the Ganfeng debt facility and the equity investment agreement will be used for Goulamina’s construction work and operational readiness activities that are progressing.
“We are extremely pleased to have executed the equity investment agreement with Ganfeng, which cements our solid relationship with China’s largest lithium producer, and the direct project investment is set to facilitate regulatory approvals in China,” Leo Lithium managing director Simon Hay said.
“Our cooperation agreement is meant to deliver a range of key strategic benefits, including a commitment to expand the capacity at Goulamina Stage 2, as well as a framework for further cooperation on a downstream conversion facility and other business opportunities.
“Satisfaction of all the conditions precedent to the Ganfeng debt facility is an important milestone with drawdown of funds now underway.”
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.
