Malian Government approves Firefinch’s Goulamina JV transaction with lithium giant Ganfeng
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The Malian Government unanimously supports Firefinch’s joint venture transaction with Jiangxi Ganfeng Lithium to develop the Goulamina lithium project, saying the project will bring significant benefits to Mali.
As part of the JV agreement, Ganfeng will contribute US$194 million in development funding, comprising US$130 million in equity funding and US$40-64 million in debt funding.
Now Government approval has been secured, the final condition precedent is the receipt of Chinese regulatory approvals which will allow the transfer of the exploitation licence for Goulamina to the JV company, which is expected to occur shortly.
The company is in the process of demerging Goulamina into a new ASX listed entity, Leo Lithium.
The companies are working to bring Goulamina into production.
The mine will be a long life, large scale, and low-cost open pit project, and is expected to produce 436,000 tonnes per annum of spodumene concentrate at an average cash cost of US$281/tonne.
“Goulamina will be the next large scale global lithium hard rock project to enter production, and the first of its kind in West Africa, with production targeted for 2023,” Firefinch (ASX: FFX) managing director Dr Michael Anderson said.
“Together with our partner, Ganfeng, the world’s largest lithium chemicals producer, we are working to expand the scale and production capacity of Goulamina and look forward to updating shareholders on the revised DFS in the coming weeks.”
Malian Minister of Mines, Energy and Water Lamine Seydou Traore said the transaction has significant advantages for Mali.
“The Goulamina Transaction will materialise the development of the first producing spodumene concentrate operation in West Africa, and on the Malian territory,” he said.
“It will allow Mali to attract new investments focused on metals used for the manufacture of batteries and the field of renewable energies.
“In addition, as part of the transaction, there is a focus on the creation of local jobs, the establishment of local infrastructure and the rapid monitoring of community engagement plans to meet the needs of local communities, which also aligns with the Malian Mining Code in terms of local content.”
Once the conditions precedent are satisfied, Ganfeng will provide the first US$39 million cash investment for the project, with the remaining US$91 million to be provided following the Final Investment Decision (FID).
The FID is expected in the December quarter 2021 following the completion of an updated Definitive Feasibility Study (DFS).
The DFS and FID will also allow subsequent debt funding of up to US$64 million to be received earlier than initially anticipated.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.