Leo Lithium has provided an update regarding the Goulamina Lithium Project and the sale of the company’s interests in Mali Lithium, the holding company of Goulamina, to GFL International Co.
As announced on 8 May 2024, Leo Lithium has agreed to sell its remaining 40% stake in MLBV to Ganfeng. With Ganfeng eventually moving to full ownership of MLBV, the joint venture partners decided that Ganfeng would assume management responsibilities of the project prior to the completion of the sale.
As Ganfeng is still building its operational team, the partners also agreed that Ganfeng would engage Leo to provide management services to Ganfeng for up to six months, ending on 13 November 2024 at the latest.
Leo has also executed the Goulamina Services Agreement with immediate effect. The key terms of the Services Agreement are as follows:
Leo Lithium will deliver:
- day-to-day administration, supervision and management of the project, including in connection with procurement, construction, commissioning, and ramp-up of operational activities, reporting and in-country financial management activities; and
- those transitional services reasonably required to facilitate a smooth transition of management to Ganfeng;
Leo Lithium will perform on a best endeavours basis;
- Leo Lithium will be paid all its direct project-related costs plus a monthly fee and profit margin in line with standard market contracting rates; and
- The term runs until 13 November 2024, unless terminated earlier by mutual agreement or by Ganfeng with 20 business days’ notice after completion of the MLBV sale. The term is independent of the timing of the MLBV share sale process.
The last outstanding document with respect to the MLBV sale is the Trailing Product Sales Fee. Leo Lithium and Ganfeng are making solid progress on this and expect to finalise related documentation in July 2024, with the TPSF being conditional upon completion of the MLBV share sale.
Leo Lithium MD, Simon Hay, commented: “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. 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.”
