Leo Lithium has divested its stake in the Mali project to Ganfeng for $342 million.

Leo Lithium announced on Wednesday that it has finalized an agreement with China’s Ganfeng Lithium to offload its remaining 40% ownership in a Mali-based mine for a sum of $342.7 million. Additionally, the West Perth-headquartered company disclosed the signing of a memorandum of understanding (MOU) to resolve all outstanding matters with Mali for $60 million, which includes the government’s stake in the Goulamina lithium project.

The decision to sell the stake stemmed from Leo Lithium’s efforts to secure a workable agreement with the Mali government. They cited concerns about operating risks in Mali and the ramifications of a new mining code, asserting that divesting the stake was in the best interest of their shareholders.

The implementation of Mali’s new mining regulations is expected to elevate the government’s potential stake in the Goulamina project to 30%, up from the previous 20%, with an additional 5% likely allocated to a local entity.

Leo Lithium emphasized that the executed sale and purchase agreement with Ganfeng ensures value for its shareholders amidst challenging circumstances. The company reaffirmed that the Goulamina project remains on schedule to commence spodumene production in the third quarter of 2024.

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