Leo Lithium sell last share of Goulamina amid Mali concerns

China’s largest lithium producer, Ganfeng, will take sole responsibility for the Goulamina Lithium Project in Mali after reaching a $342.7 million agreement for Leo Lithium’s final 40 per cent stake.

Announced early Wednesday, the sale of the Leo Lithium’s remaining 40 per cent of Goulamina was spurred by board concerns over security and sovereignty in the country, as well as the expected economic impact of new regulations.

It came as Leo Lithium also signed a memorandum of understanding with the Mali Government, resolving all outstanding issues concerning the Goulamina project.

On September 4 last year, Leo’s share price tumbled by 50 per cent on the back of news the Mali Ministry of Mines had imposed a suspension on direct shipping ore from Goulamina to review aspects of the product.

As part of the deal, Ganfeng will pay a 1.5 per cent gross revenue fee over 20 years to Leo Lithium.

It followed the January announcement in which Leo Lithium revealed it had sold a 5 per cent stake of the project to Ganfeng for $98 million.

Leo Lithium managing director Simon Hay said the sale to Ganfeng provided shareholders with certain value under highly challenging circumstances.

“Despite our best efforts to reach a viable agreement with the Mali Government and considering the increasing risks associated with operating in Mali, the impact of the new 2023 Mining Code and the company’s financial position for future funding, the board of Leo Lithium has determined that a sale of the company’s remaining interest in Goulamina is in the best interests of shareholders,” he said.

“Our relationship with Ganfeng remains strong, and we look forward to the next phase of our partnership.”

As part of the MOU, the Mali Government agreed to attend to all outstanding permits and approval, with the project on track for first spodumene production in Q3, 2024.