Leo Lithium Ltd (ASX: LLL) shares have now been out of action for over a week after the lithium developer requested a suspension.
But get the popcorn ready, because this lithium stock is scheduled to return to trade on Thursday.
Will Leo Lithium shares return to trade tomorrow?
As things stand, Leo Lithium shares are due to start trading again on 27 July.
However, as we have seen with fellow Africa-based lithium developer, AVZ Minerals Ltd (ASX: AVZ), suspensions can be extended indefinitely.
AVZ Minerals shares have been suspended from trade for over a year due to a dispute over the ownership of its Manono Lithium Project.
What's going on?
At present, it remains unclear what is causing the hold-up with Leo Lithium's shares. However, a lengthy suspension like this rarely brings good news.
What we do know, is the reason for the request. It stated:
The Company seeks the trading halt pending an announcement in relation to correspondence from the government of Mali relating to plans to produce Direct Shipped Ore.
Another thing we know is that around the same time, there has been speculation that the military-led Malian government is considering a change to regulations that could see it take stakes in mines. Reuters recently reported:
[T]hree sources close to the talks, shows the government aims to take a direct 10% stake in mining projects once a permit has been issued, entitling it to 10% of dividend payments. It would give the state the option to buy an additional 20% within the first two years of commercial production, possibly through a newly created state mining entity.
The company's recent announcement of plans to start producing direct shipped ore would likely be classed as the commencement of commercial production. Could this mean the Malian government is looking to take a 20% stake in Leo Lithium? Or perhaps even as much as 30%? This would of course have significant consequences for the company's valuation.
What else?
Alternatively, the government may simply be looking to get a slice of any revenue raised from direct shipped ore. It's possible the two parties are negotiating a fair royalty that makes the process worthwhile for both parties.
A third possibility is that the Mali government could follow the lead of other African nations by banning direct shipped ore exports. This would be a blow to Leo Lithium, which likely saw the direct shipped ore as a way to bridge its funding gap.
All should be answered tomorrow, so stay tuned for that.
