Australia's Firefinch greenlights Mali lithium project (updated)

Firefinch

04/01/2022 01:50

* Goulamina project capital cost raised to $255 mln
    * China's Ganfeng agrees to line up more debt for Goulamina
    * Firefinch shares jump to near 11-year high

 (Adds details on final investment decision, shares)
    Jan 4 (Reuters) - Australian lithium miner Firefinch Ltd
 FFX.AX  and China's Ganfeng Lithium Co Ltd  002460.SZ  have
given the go-ahead for their Goulamina Lithium Project in Mali,
even after raising the estimated capital cost for the first
phase of the project.
    The first phase of the project is now expected to cost $255
million, up from a prior estimate of $194 million, partly due to
costs associated with making the project more easily expandable.
    To help fund the higher cost, Firefinch said Ganfeng, one of
the world's top producers of lithium chemicals used in electric
vehicle batteries, has agreed to either provide a $40 million
loan or arrange up to $120 million in third party debt, up from
an original agreement of up to $64 million in bank debt funding.
    Shares of Firefinch jumped as much as 5.2% to A$0.910, their
highest since March 9, 2011. 
    A definitive feasibility study (DFS) for the project was
completed last month. Firefinch expects annual production of
506,000 tonnes of spodumene for the first 18 months of
production, which would make Goulamina one of the largest
lithium mines in the world.  urn:newsml:reuters.com:*:nASX3btgRk
    Spodumene concentrate is the ore from which lithium is
extracted. Lithium prices soared last year, as automakers around
the world began investing billions of dollars to transition to
electric vehicles, boosting demand for batteries which use
lithium.
    Firefinch said the key remaining condition required for
formation of the Goulamina joint venture is the transfer of the
exploration license to a single-purpose Malian subsidiary, as
required by local legislation.
    It added that the transfer is expected in early 2022 and
that allows Ganfeng to make its final $91 million worth of
funding into the project.
    Last year, Firefinch said Ganfeng would make total cash
investments of $130 million for a 50% stake in a joint venture
company for the lithium project.  urn:newsml:reuters.com:*:nL3N2NY08O

 (Reporting by Harish Sridharan in Bengaluru; Editing by
Shailesh Kuber and Rashmi Aich)
 ((Harish.Sridharan@thomsonreuters.com;))