Firefinch Ltd (ASX:FFX) has formalised its joint venture (JV) agreement with Jiangxi Ganfeng Lithium Co Ltd, satisfying all conditions for Ganfeng’s US$170 million investment in the Goulamina Lithium Project in Mali, with both companies now holding a 50% interest in the JV.
The final step was the transfer of Goulamina’s exploitation licence to a subsidiary of the JV company, Lithium du Mali SA.
Some US$130 million in cash will now flow to the JV company, US$39 million from escrow and US$91 million to be transferred from Ganfeng in the coming days.
Ganfeng will also provide a further US$40 million in Ganfeng debt or source US$64 million in third-party debt.
Poised to launch Leo Lithium
“This is a long-awaited and significant milestone,” Firefinch managing director Dr Michael Anderson said.
“We have been working tirelessly to progress the joint venture and demerger process to deliver value for shareholders and are delighted to be on the brink of achieving the intended result.”
Firefinch will now move to demerge the Firefinch group entity that holds its interest in the JV, spinning out Leo Lithium as a separate entity that can better focus resources on the Goulamina Project.
In the coming weeks, Firefinch will produce a definitive timeline for release of the notice of meeting and accompanying short-form prospectus.
If the demerger is approved by shareholders, Leo expects to undertake a pro-rata entitlement offer and seek admission to the official list of ASX.
Leo looks to “hit the ground running”
“This is a tremendous step along the path to listing Leo Lithium and developing Goulamina as one of the world’s largest lithium producers,” Leo Lithium managing director Simon Hay said.
“The combined debt and equity funding package of at least US$170 million from Ganfeng means Leo can now accelerate work on the Goulamina Project.
“Behind the scenes, we have been working with our partner Ganfeng, who will provide funding, offtake and operational support to significantly de-risk development.
“Assuming the approval of Firefinch shareholders, the demerger will bring Leo Lithium to life. I’m incredibly excited about the opportunity ahead and look forward to hitting the ground running come listing.”
Long-lead items for the project are already being procured and tendered, accelerating the beginning of construction at Goulamina.
Tenders for the ball mill and crushing equipment are expected to be released to providers in early April, well ahead of Leo Lithium’s likely listing date to the ASX. Ganfeng is assisting with tenders to be sent to their supplier network in China.
“We are very pleased to have cemented our partnership with Firefinch and soon Leo Lithium, at Goulamina,” Ganfeng vice-chair Xiaoshen Wang said.
“We believe this project is of significant global importance to the lithium supply chain and look forward to supporting the development of the project as we jointly bring Goulamina into production.”
About Firefinch
Firefinch is a Mali-focused gold miner and lithium developer with an 80% interest in the operating Morila Gold Mine which has produced 7.5 million ounces of gold since 2000.
Morila’s current global resource is 2.51 million ounces of gold. However, Morila’s geological limits have not been tested.
Exploration is therefore a major focus at the existing deposits and multiple targets on the 620 square kilometres of surrounding tenure.
Goulamina is one of the world’s largest undeveloped high-quality spodumene deposits. In partnership with Ganfeng, Firefinch will bring the project into production.
All permits are in place and the Definitive Feasibility Study Update confirmed Goulamina as a long life, large-scale and low-cost open pit project expected to produce 726,000 tonnes of spodumene concentrate at an average cash cost of US$312 per tonne.
Goulamina has a mineral resource of 109 million tonnes at 1.45% lithium oxide (Li2O) for 1.57 million tonnes contained Li2O.