Australian lithium miner Firefinch rises after J Capital goes long

Firefinch

24/03/2022 01:49

March 24 (Reuters) - Australia's Firefinch Ltd  FFX.AX 
shares rose after short-seller J Capital Research on Thursday
published a report saying the lithium miner should be valued
roughly 90% above its current market cap. 
    Shares of Firefinch, one of the world's top producers of
lithium chemicals used in electric vehicle batteries, rose as
much as 5% following the report.  
    "We believe Firefinch should be trading at a valuation of
between A$1.68 billion ($1.3 billion) and A$2.28 billion" the
short-seller said in the report. The midpoint of the range is
90% above the Firefinch's current market cap of A$1.04 billion,
according Refinitv data. 
    Late last year, J Capital had to settle a lawsuit with
another lithium miner, Vulcan Energy  VUL.AX , after the company
had rejected the contents of a report, branding them
"misleading". J Capital also had to issued an open letter of
apology to Vulcan.  urn:newsml:reuters.com:*:nL1N2RO0FN urn:newsml:reuters.com:*:nFWN2T00HP
    "The political risk in Mali has scared investors away from
investigating the value of Firefinch," J Capital said in
Thursday's report https://www.jcapitalresearch.com/uploads/2/0/0/3/20032477/2022_03_23_ffx.pdf.
 
    "We believe Firefinch's under-appreciated lithium asset,
Goulamina, alongside its operational gold mine, Morila, are
significantly undervalued based on the current market
capitalization," it added.  
    Early this year, Firefinch gave the go-ahead for their
Goulamina Lithium Project in Mali, after raising the estimated
capital cost for the first phase.  urn:newsml:reuters.com:*:nL4N2TK076
    

($1 = 1.3337 Australian dollars)

 (Reporting by Indranil Sarkar in Bengaluru; Editing by Stephen
Coates)
 ((Indranil.Sarkar@thomsonreuters.com; Mobile:  +91
7022132226;))