Leo Lithium (ASX:LLL) has released significant updates regarding its flagship and only project, the Goulamina Lithium Project in Southern Mali. Recognised as one of the largest undeveloped hard rock lithium deposits globally, Goulamina is predicted to become a major player in the lithium-ion battery industry.
Initially aiming to be West Africa’s first spodumene producer, Leo Lithium is now divesting all of its assets in the project.
A major influence on this decision could be the current fluctuating lithium prices and market uncertainties.
“Leo Lithium has now transferred management responsibility of Goulamina to Ganfeng, which is a step closer to the Company’s eventual exit from the Project,” Leo Lithium’s Managing Director Simon Hay said.
“While we would have preferred to remain involved in Goulamina, in the absence of a viable agreement with the Mali Government, we believe Ganfeng assuming management and funding responsibility for the Project is the best course of action and in the best interest of all stakeholders under the current circumstances.”
As part of the transition, Leo Lithium is progressing with the sale of its interests in Mali Lithium BV (MLBV), the holding company of Goulamina, to Chinese giant GFL International Co. (Ganfeng).
Ganfeng will assume full management responsibilities for the project during a six-month handover period ending no later than 13 November 2024.
Despite the divestment, Leo Lithium also announced a substantial upgrade to the Mineral Resource Estimate (MRE) at Goulamina this morning.
This follows an extensive exploration drilling campaign completed in the second half of 2023, with the MRE now increased by 27% from 211 Mt at 1.37% Li2O to 267.2 Mt at 1.38% Li2O, including 723,000 tonnes of material mined between June 2023 and April 2024 from the stage 1 starter pit and stockpiled.
Regardless, these developments raise questions about the company’s future direction now that its prime project is soon to be no longer under its control. Investor reactions at the next AGM will be a crucial indicator in determining Leo Lithium’s next steps.
LLL last traded at 50.5 cents, at 12pm AEST.