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- Firefinch (FFX) updates the definitive feasibility study (DFS) of its Goulamina Lithium Project, putting its project amongst the world’s largest lithium developments
- The new update shows strong financial returns and a higher production rate than outlined in the October 2020 DFS
- Annualised spodumene concentrate production is 506,000 tonnes and is expected to increase to 831,000 tonnes, one of the biggest production profiles for any spodumene mine
- Post-tax net profit value now sits at $4.1 billion and post-tax internal rate of return (IRR) of 83 per cent, more than double the previous DFS which put the figure at $1.7 billion
- Just before the market opens this morning, FireFinch last traded at 81 cents per share
An updated definitive feasibility study (DFS) at Firefinch’s (FFX) Goulamina Lithium Project in Mali, West Africa, puts it amongst the world’s largest lithium developments.
The new update shows strong financial returns and a higher production rate than outlined in the October 2020 DFS.
Annualised spodumene concentrate production now sits at 506,000 tonnes for the first 18 months and is expected to increase to 831,000 tonnes. This is one of the biggest production profiles for any spodumene mine.
In the October 2020 DFS, the company reported an average spodumene concentrate production of 436,000 tonnes per annum.
Notably, post-tax net profit value now sits at $4.1 billion and post-tax internal rate of return (IRR) of 83 per cent, more than double the previous DFS which put the figure at $1.7 billion.
Throughput from the mine will be increased from 2.3 million to four million tonnes per annum, 18 months after the commissioning of the stage one processing circuit.
In comparison to spot pricing and current price estimates, a “conservative” spodumene concentrate price of US$1250/tonne (A$1782) real is applied for the first five years of production, and a long-term weighted average of US$900/tonne (A$1283) real is used for the remaining mine life. The average life-of-mine price is US$978 (A$1394)per tonne.
The DFS follows Jiangxi Ganfeng Lithium and Firefinch agreeing to form a joint venture to develop Goulamina.
The key criteria for the Goulamina JV to approve a final investment decision was a DFS update returning a post-tax IRR of more than 15 per cent, which has been exceeded.
Additionally, the last condition to be completed is the transfer of the project exploration licence to a single purpose Malian subsidiary as needed by Malian legislation. This is expected to occur in early 2022.
Firefinch and Ganfeng will confirm the FID once the JV is formed. Both parties have agreed to proceed with early-stage engineering, drilling and community and environmental works to fast track the development of this project.
The company also has plans to demerge Goulamina into a new ASX listed company, called Leo Lithium. Firefinch will look for shareholder in the first quarter of 2022.
Managing Director Michael Anderson is “absolutely delighted” with the outcome of the DFS.
“Only 14 months ago in delivering the original DFS we said that, given market conditions for lithium, we would be patient to ensure we maximise shareholder returns – that patience has been rewarded,” Dr Anderson said.
“Our strategy has been to deliver a high return project; one with low technical risk, a quality partner in Ganfeng, the world’s largest lithium chemical producer, to provide a funding solution and offtake support.”
“That is the project that we will be demerging to form Leo Lithium. We expect to
take Leo to market in March-April next year with engineering, construction and drilling works underway and a clear path to first production in early 2024 in front of us,” he concluded.
Just before the market opens this morning, FireFinch last traded at 81 cents per share.
