The binding deal will see Firefinch (ASX:FFX) establish a 50:50 incorporated joint venture (JV) with Ganfeng – which supplies tier 1 battery players such as BMW, LG Chem and Tesla — to develop and operate the world-class Goulamina lithium project.

Ganfeng will invest US$130m in three tranches for its 50% share of the project, with the final US$91m to be made upon a Final Investment Decision (FID).

It is expected that FID will be reached within six months of the transaction completing, Firefinch says.

Together with up to US$S64 million in debt funding to be arranged by Ganfeng, it’s expected to fund Goulamina into production.

Ganfeng has also agreed to enter into an offtake agreement for up to 100% of spodumene concentrate product produced at Goulamina across the life of mine.

That’s project offtake and financing all taken care of.

Firefinch — which intends to demerge its interest in Goulamina into a separate lithium-focussed entity to be listed on the ASX  — will be the operator and manager of Goulamina, with assistance from Ganfeng in processing and other disciplines.

The Goulamina project

Results of a Definitive Feasibility Study (DFS) in October 2020 placed Goulamina among the world’s highest quality and largest undeveloped lithium deposits, Firefinch says.

The feasibility study revealed a pretty good set of numbers with a pre-tax net present value of $1.7bn and a reasonably low all-in cost of about $313 a tonne.

It envisages average production of 436,000 tonnes per annum (~64,700t LCE) of high quality spodumene concentrate over an initial 23-year mine life.

This production profile will make Goulamina one of the world’s premier lithium producers.

Goulamina now stands to be the world’s next lithium mine of scale, Firefinch chairman Dr Alistair Cowden says.

“Ganfeng are contributing funding and lithium expertise to transform Goulamina into one of the world’s largest global producers,” he says.

“The offtake deal effectively integrates and elevates Goulamina into the global lithium supply chain at an optimal time for battery metals demand.”

The Firefinch share price gained 0.07% in early trade Wednesday.

 

Firefinch share price today:

 

This article was developed in collaboration with Firefinch, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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