Firefinch Ltd To Seek Investors Up To $ 47 Million To Accelerate Development Of Morila Gold Mine

The cash injection will support Firefinch as it accelerates exploration, resource and reserve development and expansion drilling at “Morila the Gorilla” and prepares to de-merge its lithium business, creating a new listed entity. the ASX.

Firefinch Ltd (ASX: FFX) is set to raise nearly $ 47 million to boost ramp-up activities at its Morila gold mine in West Africa and cover the overhead costs of its operations. ‘gold and lithium.

The gold miner and lithium developer halted trading earlier today as it prepared to announce details of its latest capital increase before the market closes.

To provide the funding, Firefinch intends to issue approximately 117 million new FFX shares to institutional investors at 40 cents each.

The cost represents a discount of 11.1% from the last closing price of the Firefinch share and a markdown of 13.7% from the five-day volume weighted average price.

Placement to maintain momentum

Firefinch Managing Director Dr. Michael Anderson said: “The successful completion of the placement will allow Firefinch to build on significant momentum in our gold and lithium business as we progress to become a 200,000 ounce gold producer. per year by 2024 in Morila, and finalize the completion of the JV transaction with Ganfeng to develop Goulamina.

“Since taking on the role of Managing Director in early April 2021, my enthusiasm for the opportunity presented to Morila has grown steadily.

“Firefinch has systematically moved Morila from a tailings reprocessing operation to a large-scale West African gold mining operation with proven production credentials and significant upside potential. “

Rise in gold mining activity

Firefinch’s primary goal is to become a 200,000 ounce gold producer at the Morila gold mine in Mali, West Africa by 2024.

To do this, the gold miner has identified two short-term goals to achieve in its flagship gold operation with the help of new funding.

First, the ASX-lister wants to increase gold production in Morila, mainly by mining neighboring satellite pits in the area to produce up to 50,000 ounces of gold per year.

Firefinch also intends to mine the Morila super pit in the second half of next year, rapidly increasing gold production to 120,000 ounces per year.

From there, it intends to reach 170,000 ounces of gold production in 2023 before reaching the 200,000 ounce mark in 2024.

At the same time, Firefinch wishes to intensify its activities to achieve its second objective: to carry out the exploration and development of resources at “Morila the gorilla”.

This involves drilling the Morila super pit, exploring extensions at depth, assessing the project’s 650 square kilometers of regional tenure, and aiming for a significant increase in resource inventory and life extension. of the mine beyond the current 10-year plan.

Speaking on the activity at Morila, MD Anderson said: “The team delivered a life plan for the mine, started dewatering the Morila super pit, started mining the pit. Morila 5, brought the communication circuit back into service and more recently appointed the international entrepreneur Mota -Engil, and Inter-Mining Services, owned by Mali, as mining entrepreneurs for Morila.

“In summary, the Firefinch team have demonstrated their ability to achieve our set goals on time and in a high quality manner.”

Goulamina Lithium prepares for demerger

While the new capital will contribute greatly to its flagship gold asset, Firefinch also plans to use the financing as it prepares to divest its Goulamina Lithium project.

Just a few weeks ago, the Materials Inventory entered into a “water-turning” partnership with the world’s leading lithium producer Jiangxi Ganfeng Lithium Co Ltd (known as Ganfeng) to substantially fund the asset. to produce.

As part of the joint venture agreement, Ganfeng agreed to provide US $ 130 million in equity to support the development of Goulamina, as well as debt financing of up to US $ 64 million.

The deal includes a major off-take agreement with Ganfeng and sets up the lithium asset in West Africa to become “the next major lithium mine in the world,” according to Firefinch chairman Alistair Cowden.

Once the transaction is finalized, the ASX-lister will transform Goulamina into a separate lithium-focused entity that will be listed on the ASX.

Anderson concluded, “The placement will also provide working capital to support the completion of the recently announced Goulamina JV transaction and the proposed spin-off of Goulamina into a separate ASX-listed lithium company to create further value for shareholders of Firefinch. “

About Eric Buss

Check Also

Illegal gold miners threaten fragile way of life deep in the Amazon rainforest

Dressed in a traditional headdress, their faces decorated with paint, this indigenous community prepares their …

Leave a Reply

Your email address will not be published. Required fields are marked *