Leo Lithium's Strategic Shift: Project Sale and Operational Milestones

Project and Operational Developments

Leo Lithium has maintained an exceptional safety record, with no lost time injuries reported since the commencement of the Goulamina Project. The project has reached an impressive 86% completion by the end of the quarter, with mining activities progressing as planned. A total of 1.07 million BCM of material was mined during the quarter.

The company has also made significant strides in the construction of both the dry and wet plants. The dry plant has seen the completion of critical commissioning activities, while the wet plant is nearing the final stages of mechanical and electrical installation.

Proposed Transaction to Dispose of Shareholding in MLBV

Leo Lithium has reached a settlement with the Mali Government on all matters in dispute. The company plans to sell its shareholding in Mali Lithium B.V. (MLBV) for $342.7 million, pending shareholder approval. The sale proceeds will be distributed to shareholders in two tranches, the first in January 2025 and the second in July 2025.

Non-Executive Chairman Rick Crabb stated, 'Though the preferable outcome would have been for Leo Lithium to remain involved in Goulamina, considering the increasingly challenging sovereign and security risks in Mali and the expected economic impact from adopting the 2023 Malian Mining Code, the Board believes it is in the best interests of shareholders to sell the Company’s remaining interest in MLBV and the Project.'

Health and Safety

The company has maintained an exceptional health and safety record throughout the quarter, with no lost-time injuries reported. This achievement reflects the meticulous focus of the company’s employees and contractors on-site towards safety, alongside the implementation of rigorous systems and processes, training, and effective site supervision.

Construction Progress

Progress continued at Goulamina and remains on plan with completion exceeding 86%. Electrical installation continues to be a critical path activity, and this has faced additional challenges with the wet season impacting contractor productivity. Any further delays have the potential to impact the overall project timeline.

Commissioning activities commenced throughout the dry plant using temporary power. All major equipment, including primary, secondary, and tertiary crushers, dry screen, conveyors, pumps, and electrical motors, have now been operated. With the imminent completion of final platework in the wet plant, piping and electrical activities have become the principal focus and will remain so through to completion.

Corporate Update

Leo Lithium has signed a Memorandum of Understanding (MoU) with the Mali Government, including a $60 million settlement to resolve all outstanding issues. The company has also entered into a binding agreement to sell a 5% interest in MLBV to Ganfeng for $65 million. Following the completion of this transaction, Leo Lithium’s interest in MLBV is now 40%, and Ganfeng’s interest is 60%.

As part of the proposed sale of its remaining 40% shareholding in MLBV to Ganfeng, Leo Lithium will receive cash consideration of $342.7 million, payable in three installments. The first installment of $10.5 million has already been received, with the next installment of $161.0 million due upon completion of the transaction, and the final installment of $171.2 million plus interest due by 30 June 2025.