Kodal Minerals provided details of an updated Project Feasibility Study and the development status for its Bougouni Lithium Project in southern Mali. This update is based on a review of the engineering, process recovery and capital cost for the proposed Project operation and improved financial metrics based primarily on an improved market outlook for the sale of lithium spodumene concentrates. The current buoyant market conditions for lithium spodumene concentrate reflect current high and future demand for battery minerals and recognise a supply deficit.

Further Information: Bougouni Lithium Project Status: Kodal Minerals was granted an Environmental Permit over the Project in November 2019. The original Feasibility Study was completed by Kodal Minerals in January 2020, culminating in the granting of a large-scale Mining Licence in November 2021 to the Company's Mali subsidiary company, Future Minerals SARL. The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are mined.

The Mining Licence is granted under the 2019 Mining Code and extends over 97.2 square kilometres covering the proposed open-pit mining and processing operation at Bougouni. The FS for the Bougouni Lithium Project proposes a contract mining operation and conventional "milling and flotation" processing facility, capable of treating 2Mtpa (million tonnes per annum) of ore, complete with associated infrastructure, to mine and process approximately 16Mt of pegmatite ore over an initial 8.5-year life of mine for the production of a 6% lithium concentrate. Feasibility Study Costs and Project Economics Update: In response to rising SC6 prices, Kodal provided an update on Project Economics at Bougouni.

Kodal has conducted a Feasibility Study update to assess variations in key cost input parameters, optimisation of metallurgical recovery, and to reflect increased SC6 sale prices since the original FS was conducted. The rising SC6 price remains the foremost positive impact on project economics at Bougouni. However, a number of key capital and operating costs inputs have increased over the past 2.5 years that have a direct, albeit moderate, impact on the Project's financial outcomes.

Of significance are rising iron ore prices (which directly impacts steel prices, a major component of the process plant) and rising fuel prices (which directly impacts shipping costs and mining operating costs) which have been incorporated into this study update. Overall, this has resulted in an approximate 20% increase in the expected capital cost to USD 154.3 million and a 15% increase in mining cost to USD 3.03 per tonne. Further advancement of spodumene concentrate flotation technology has had a positive impact on metallurgical recoveries which has also been addressed in the SU.

Metallurgical testwork conducted for the FS concluded that the laboratory flowsheet predicts "a recovery of 75% of Li2O to a concentrate grade of 6%." Average recovery for life of mine of 74% was adopted for the SU. The Feasibility study update incorporated a review of capital and operating costs of the proposed operation and the outcomes are presented in the table below, including a comparison to the estimates current at the time of the original FS. Project Development Activities: The SU has highlighted the development of the Project as a robust, economically viable proposition.

Since publishing the first FS, the Company has continued its activities to optimise and advance the Project, including various strategic advances in support of the SU and associated costs. Kodal engaged an experienced Chinese engineering consultancy based in Shandong, Yantai Jinpeng Mining Machinery Co. Ltd, who boast direct experience in the design of hard rock milling and flotation plants.

Jinpeng were engaged to conduct study update engineering services for the complete range of plant area design necessary to provide a technically compliant processing plant facility for Bougouni. This included all processing plant equipment and services including crushing, milling, flotation, filtration, tailings handling and product load out facilities. The Jinpeng study update was completed in first quarter 2022 and was based on equipment suppliers from China for the same flowsheet as defined in the FS.

The original FS contemplated major equipment suppliers in Europe and South Africa. The Jinpeng SU capital cost estimate realised a circa 20% capital cost saving for the process plant and associated facilities and services when compared with the original FS. Engaging with Jinpeng provides Kodal with an opportunity to decrease capital costs (particularly given the forecast increased capital costs), and this will be pursued in more detail in the future as the Company advances the Project to development stage.

Other areas that have the potential to enhance the Bougouni Lithium Project include: Resource growth and increase of head grade from further exploration in the highly prospective areas contained within existing exploration leases; Reduction in capital cost through further optimisation of the flowsheet and engaging with experienced Chinese manufacturers; Investigate more favourable power supply solutions to reduce operating costs, which is currently under way on the basis of connecting to the future high-voltage grid approximately 15km from the site (the new Bougouni substation is being constructed presently under the 225 kV Sikasso-Bougouni-Sanankoroba-Bamako Transmission line project by the Mali power authority - Energies de Mali); Optimisation of mine scheduling and drill and blast strategy; and Cost savings relating to the construction of the tailings storage facility. Currently the design of Stage 1 is based on 24 months of capacity to combat potential for adverse climatic conditions. Potentially this could be reduced to about 18 months' capacity if the sequencing of construction is favourable with respect to maximising construction in the dry season.