Firefinch (ASX:FFX) - Managing Director, Michael Anderson
Managing Director, Michael Anderson
Source: Firefinch
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  • Following an updated definitive feasibility study, Firefinch (FFX) has approved a final investment decision for its Goulamina Lithium Project in Mali, West Africa
  • The DFS update to the initial October 2020 DFS was completed in December 2021, revealing a pre-tax NPV of $4.1 billion and a post-tax IRR of 83 per cent
  • The principal remaining condition precedent to the creation of the Goulamina JV is the transfer of the Project Exploitation Licence to a single purpose Malian subsidiary
  • Firefinch and joint venture partner Ganfeng are continuing to move forwards with early-stage engineering, drilling, and numerous community and environmental activities
  • Shares in FXX last traded at 86.5 cents on December 31, 2021

Firefinch (FFX) has approved a Final Investment Decision (FID) for its Goulamina Lithium Project in Mali, West Africa following an updated definitive feasibility study (DFS).

The DFS update to the initial October 2020 DFS was completed in December 2021, revealing a pre-tax net present value of $4.1 billion and a post-tax internal rate of return of 83 per cent.

Following these results, both Firefinch and joint venture partner Jiangxi Ganfeng Lithium have now approved the FID.

The parties have agreed to waive the FID condition for the final US$91 million (A$126 million) payment upon the creation of the incorporated joint venture, Goulamina JV.

The principal remaining condition precedent to the creation of the Goulamina JV is the transfer of the Project Exploitation Licence to a single purpose Malian subsidiary, as required by Malian law.

This move is being made possible by an internal reorganisation of Firefinch subsidiaries.

The transfer is scheduled for early 2022 and, if other condition precedents are met, will allow the creation of the Goulamina JV, payment of the last US$91 million (A$126 million) of Ganfeng’s US$130 million (A$180 million) commitment, and the release from escrow of the US$39 million (A$54 million) initial payment made last year.

The capital cost for the 2.3 million tonnes per year operation increased from US$194 million (A$269 million) to US$255 million (A$354 million) as a result of the DFS Update.

This was motivated in part by the increased capital required to provide the flexibility to easily transition to a 4 million tonnes per annum throughput operation.

As a consequence, Ganfeng has committed to either offering $40 million in Ganfeng supplied debt or arranging up to US$120 million (A$167 million) in third-party debt (previously agreed up to US$64 million (A$89 million)) to fund the project.

Firefinch Managing Director, Michael Anderson, said the approval was ‘yet another major milestone for the Goulamina Project’.

“Clearly the outcomes of the DFS Update have been extremely compelling to the Boards of both companies and it is a testimony to the project’s credentials that the partners have moved so quickly and collaboratively to commit to the development of Goulamina,” Dr Anderson said.

“We sincerely look forward to maintaining the positive momentum into the New Year as site-based activities increase.”

Ganfeng and Firefinch are continuing to move forwards with early-stage engineering, drilling, and numerous community and environmental activities to expedite the project’s development.

Once founded, the Goulamina JV will reimburse Firefinch’s expenditures.

Shares in FXX last traded at 86.5 cents on December 31, 2021.

FFX by the numbers
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