Lindian Resources Ltd (ASX:LIN, OTC:LINIF) has signed binding agreements with Guinea-based Enterprise Generale d’Entretien & Construction and Lancinet Dabo, granting a 10-year lease and operational rights over the Woula Bauxite Project in Guinea, West Africa, providing a passive annual royalty stream.
The lessees are well-established in Guinea with strong relationships with government and the mining ministry and aim to bring Woula to construction within eight months, with an initial production target of 2 million tonnes annually.
“We are delighted to have secured this binding agreement with Lindian for the Woula Bauxite Project which is a unique low-cost, fast start-up opportunity," Generale d’Entretien & Construction’s Lancinet Dabo said.
"We have commenced some initial works which should be seen by Lindian’s shareholders as a clear indication of our ability to secure the Exploitation Licence for Woula very soon. We look forward to rapidly advancing the project into production.”
Locations of Lindian’s bauxite projects.
First production in 12 months
Lindian will receive a royalty of between US$1 and US$2 per tonne of bauxite produced, dependent on the producing entity’s ownership structure, extending for the life of the production.
The company will transfer the Woula leases to the lessees after 10 million tonnes of bauxite is produced or after five years, whichever comes first.
The lessees are actively working to secure the necessary exploitation licence for Woula and have started preliminary project activities, including mine planning and site access preparations.
First production is expected within 12 months.
Lindian holds a right to terminate the current agreement if the required Exploitation Permit is not issued within 90 days. This permit is essential for resource development under Guinea’s mining legislation.
Preferential port access
Furthermore, if the lessees secure port access for Woula or related projects, they have agreed to give Lindian priority access to any extra port capacity. This could support the progress of Lindian’s Gaoual and Lelouma bauxite projects, which are in funding discussions.
Through the agreement, Lindian has obtained preferential access to port facilities in northern Guinea, where available capacity supports its export operations. These facilities are associated with a consortium, including the lessees, which recently completed favourable feasibility studies and secured a government protocol to develop an independent export terminal in the Boké region.
The proposed port project, led by SIG Infrastructure, the lessees and STS Group, addresses logistical challenges in mineral exportation, particularly bauxite.
A feasibility study, aligned with international standards, confirmed that the site could accommodate a multi-user terminal with a capacity of handling 20 million tonnes of bauxite annually. Planned infrastructure includes barge piers, loading systems and storage facilities to support this capacity.
Additionally, Lindian is exploring development options for its other Guinea-based bauxite assets, Lelouma and Gaoual. Discussions with existing Memorandum of Understanding partners and new interested parties are in progress.
“This binding lease and royalty agreement with a well-established Guinean company and executive will deliver a meaningful passive annual royalty stream to Lindian,” executive chairman Asimwe Kabunga said.
“It marks the first step in the company monetising its bauxite assets and importantly, does not require us to make any capital contribution.
"The parties have already commenced some work streams in anticipation of the Exploitation Licence being granted, and we will provide updates on the project’s development through to first production being achieved.”
“Lindian is making good progress on multiple fronts, particularly with respect to financing Kangankunde with a number of negotiations ongoing and some at an advanced stage.
"This reinforces our commitment to the asset as a top priority. Lindian’s leadership is united in this commitment to deliver optimal results for all investors and stakeholders.”
Further benefits
Lindian holds a 61% ownership in Woula Natural Resources SARL. If minerals other than bauxite are discovered on the tenement, Lindian and the lessee will negotiate a separate royalty agreement specific to those minerals, with royalty rates reflecting standard industry practices and a fair comparison to bauxite royalties.
The lease agreement provides the lessees with an option to buy out Lindian’s interest in Woula. If exercised within the first year, the buy-out price is set at US$15 million.
From the second year onwards, this price decreases by US$1 million annually until it reaches US$6 million in Year 10. For Year 11 and subsequent years, the price stabilises at US$5 million.
Upon Lindian’s receipt of the buy-out price, the Woula Royalty Deed and Lindian’s ownership interest will be transferred to the lessee. Additionally, the lessee will gain exclusive management and operational control over Woula, and the existing Investment Deed will be terminated.
Progress at Kangankunde
Separately, Lindian reports significant progress in financing its Kangankunde rare earths asset in Malawi, with advanced negotiations underway with multiple potential funding partners.
The Kangankunde Rare Earths Project is the company’s flagship asset, representing one of the world’s largest rare earth deposits. Known for its high-grade rare earth oxide (REO) content and minimal impurities or radioactive minerals, Kangankunde is regarded as a top-tier project.
With robust development potential and significant scope for future expansion, the project is set to play a pivotal role in Lindian’s growth strategy.
A feasibility study on the Stage 1 development, released on July 1, 2024, highlighted exceptional technical and economic metrics, positioning Kangankunde as one of the rare earth sector's most cost-efficient projects globally in both capital and operational terms.
The project is well-supported by local infrastructure and enjoys strong community and government backing, with all necessary licences and approvals secured to initiate construction.
After completing the feasibility study, Lindian is now advancing towards securing project financing, targeting the commencement of Stage 1 construction by late 2024.