PERTH (miningweekly.com) – ASX-listed Firefinch on Wednesday unveiled details of its $130-million transaction with the world’s largest lithium developer Jiangxi Ganfeng Lithium Co to establish a joint venture (JV) at the Golamina project, in Mali.
Under the terms of the agreement, Ganfeng would make a $130-million cash investment into Mali Lithium, which holds Firefinch’s interest in the Goulamina project, in return for a 50% interest in the project vehicle.
In addition Ganfeng would also secure up to $64-million in debt funding that would bring the Goulamina project into production.
“This is a watershed moment for the Goulamina Lithium Project and an outstanding result for shareholders. It is a testament to the quality of Goulamina to have attracted a partner of Ganfeng’s calibre, being one of the world’s leading lithium producers responsible for supplying tier 1 battery players and OEMs such as BMW, LG Chem and Tesla,” said Firefinch chairperson Dr Alistair Cowden.
“Goulamina now stands to be the world’s next lithium mine of scale. Gangfeng are contributing funding and lithium expertise to transform Goulamina into one of the world’s largest global producers. The offtake deal effectively integrates and elevates Goulamina into the global lithium supply chain at an optimal time for battery metals demand.
“We are delighted to welcome Ganfeng as a partner to Goulamina as we jointly work towards fast tracking the development of the project, leveraging Firefinch’s in-country operational expertise.”
Cowden said that the transaction would deliver several benefits for Mali, providing a clear pathway for the country to host the first spodumene concentrate operation in West Africa, thereby opening Mali for further investment focussed on the battery metals and renewables space.
Moreover, the transaction supports the creation of local employment opportunities, the establishment of local infrastructure and the fast tracking of community engagement plans to assist the needs of local communities.
A 2020 definitive feasibility study into the Goulamina project estimated that it would require a capital investment of $194-milion, and based on a mineral resource of 108.5-million tonnes, grading 1.45% lithium oxide, the project would produce an average of 436 000 t/y of spodumene concentrate over a mine life of 23 years.
The study estimated a pre-tax net present value of some $1.2-billion, and a pre-tax internal rate of return of 55.8%, based on a price of $666/t of concentrate, while the all-in sustaining costs for the project have been estimated at $306/t of concentrate over years one to five of the operation.
Meanwhile, Ganfeng has also agreed to enter into an offtake agreement for up to 100% of the spodumene concentrate product produced at Goulamina ocross the project’s mine life.
The JV partner would receive offtake rights to 50% of the offtake on a final investment deision, and the receipt of a final investment. To ensure that the project is developed in a timely manner, the remaining 50% of the offtake will be assigned to Ganfeng, subject to the provision of debt and Goulamina reaching commercial production within four years of the transaction completing.
The transaction is subject to a number of conditions, including Chinese regulatory aprpoval, the applicable Malian government approval, and shareholder approval from both companies.
Firefinch previously flagged the potential demerger of the Goulamina asset into a separately listed ASX entity. However, the company said on Wednesday that this demerger would only occur once Ganfeng has made its initial investment, at which time Firefinch would assign the newly publicly listed demerged company with its rights to manage the Goulamina project.