Leo Lithium announced on Wednesday that it has reached an agreement with China’s Ganfeng Lithium to sell its remaining 40% stake in a mine located in Mali for $342.7 million.
In addition to the stake sale, the West Perth-based company has signed a memorandum of understanding with Mali to settle all outstanding issues for $60 million, which includes the government’s free carry stake in the Goulamina lithium project.
Leo Lithium stated that it opted to sell the stake after attempting to negotiate a viable agreement with the Mali government.
It cited the risks associated with operating in Mali, along with the impact of the new mining code, as factors influencing its decision, emphasizing that selling the stake was in the best interests of its shareholders.
The implementation of the new mining code in Mali is expected to increase the government’s potential stake in the Goulamina project from 20% to 30%, with an additional 5% stake likely to be allocated to a local entity.
Leo Lithium expressed confidence in the executed sale and purchase agreement with Ganfeng, stating that it provides shareholders with assured value despite challenging circumstances.
The company reiterated that the Goulamina project remains on track to produce its first spodumene in the third quarter of 2024.
