Firefinch Ltd (ASX:FFX) will seek to raise A$25 million via a Share Purchase Plan (SPP) to eligible shareholders of up to A$30,000 per shareholder.
Under the SPP, shares will be offered at A$0.58 per share, a 10.8% discount to the last closing price of A$0.65 and a 10.8% discount to the 5-day VWAP.
The money raised will enable FFX to ramp up operations at its gold and lithium projects in Mali.
FFX has an 80% interest in the Morila Gold Mine and owns 100% of the Goulamina Lithium Project – one of the world’s largest undeveloped high quality spodumene deposits.
Funds to fast-track development
Firefinch has grand plans for the A$25 million across both projects.
Funds raised will be used for:
- Ongoing ramp-up and development activities at the Morila Gold Project, including further dewatering and tailings repatriation from the Morila Super Pit, pre-strip and mining of the satellite pits at Viper and N’Tiola, and pre-stripping at Morila to allow commencement of open pit mining;
- Continuation of exploration, resource development and expansion drilling at Morila Super Pit (including investigation of the underground potential), to build on Firefinch’s recent drilling success, and to further test the potential of, not only the known deposits, but also the 685 square kilometres of regional tenure;
- The recommencement of drilling at the Goulamina Lithium Project aimed at both converting inferred resources to indicated, and further expanding the resource base to provide for mine life extensions; and
- General working capital to meet overheads across both the gold and lithium businesses, including supporting the planned demerger of Leo Lithium, and costs of the SPP.
Shareholders to receive Leo shares
In a bonus for Firefinch shareholders, they also have the opportunity (if they remain on the books at the relevant record date), to an entitlement to the planned in-specie distribution of Leo Lithium Limited shares when Leo is demerged in early 2022.
FFX is in the process of demerging Goulamina into a new ASX listed entity, Leo Lithium.
Only eligible Firefinch shareholders will receive the planned in-specie distribution of Leo shares at no cost as part of the demerger.
FFX reserves the right to accept oversubscriptions or to scale back applications in its absolute discretion.
The record date for the SPP is 5:00pm (WST) on October 22, 2021.
In addition to the SPP, FFX continues to target debt funding of approximately US$50 million and remains in advanced discussions with potential financiers.
The closing date for the SPP will be November 19 at 5.pm WST, with the announcement and issue of new shares to come on November 26.
Trading of the news shares will start on November 29.
About FFX’s projects
Goulamina
In partnership with Ganfeng, Firefinch will bring Goulamina into production. This is a 50/50 incorporated joint venture, with Ganfeng contributing US$194 million in development funding, comprising US$130 million in equity funding and US$40-64 million in debt funding.
All permits are in place and a definitive feasibility study confirmed Goulamina as a long life, large scale and low-cost open pit project expected to produce 436,000 tonnes per annum of spodumene concentrate at an average cash cost of US$281/tonne.
An initial mine life of 23 years is underpinned by a high grade, low impurity ore reserve of 52 million tonnes at 1.51% Li₂O for 790,000 tonnes contained Li₂O comprising 8.1 million tonnes of proven ore reserves at 1.55% Li₂O and 44.0 million tonnes of probable ore reserves at 1.50% Li₂O.
Goulamina has a mineral resource of 109 million tonnes at 1.45% Li₂O for 1.57 million tonnes of contained Li₂O comprising 8.4 million tonnes at 1.57% Li₂O in the measured category, 56.2 million tonnes at 1.48% in the indicated category and 43.9 million tonnes at 1.45% in the inferred category.
Morila
The Morila Gold Mine is one of the world’s great open pit gold mines, having produced more than 7.5 million ounces of gold since 2000 at grades that were among the highest in the world, earning it the moniker 'Morila the Gorilla'.
Firefinch acquired Morila for just US$28.9 million in late 2020 with the strategic intent to rapidly increase production; initially targeting 70,000-90,000 ounces per annum of gold from a combination of satellite pits, stocks and tailings, and thereafter growing production to 150-200 ounces by mining the Morila Superpit.
Morila’s current global resource is 2.43 million ounces of gold (measured 1.73 million tonnes at 0.5 g/t gold for 30,000 ounces, indicated 26.7 million tonnes at 1.49 g/t for 1.28 million ounces and inferred 22.1 million tonnes at 1.58 g/t for 1.12 million ounces). However, Morila’s geological limits have not been tested.
Exploration is therefore a major focus at the existing deposits and multiple targets on the 685 square kilometres of surrounding tenure.