PERTH (miningweekly.com) – Embattled former gold developer Firefinch is hoping to finalise negotiations regarding a potential transaction during the third quarter of this year.

The company in December last year initiated a strategic review after an earlier decision to cease funding the Morila gold mine, in Mali. The strategic review process was aimed at inviting suitable bidders to submit proposals that would deliver "compelling value and liquidity" to Firefinch’s shareholders.

The ASX-listed company on Thursday said that the company had been in active discussions with participants, and had now advanced the process to include detailed negotiations and finalisation of key terms and conditions of a potential transaction, including conditions precedent.

If the transaction proceeds, it will require shareholder approval.

Firefinch told shareholders that should a transaction not be successful "within a suitable time-frame", the company would terminate the process and would return the majority of its current cash to shareholders. The company would also distribute its shareholding in lithium developer Leo Lithium to shareholders, once these had been released from escrow in June 2024.

At the end of June, Firefinch had A$34.6-million in cash, and retained a 17.6% shareholding in Leo Lithium valued at around A$258-million.

The miner in November last year took the decision to discontinue financing the Morila gold mine after failing in its recapitalisation efforts. It subsequently notified the board of its 80%-held Malian subsidiary Société des Mines de Morila SA (Morila SA) that it was unable to continue to fund operations, and since then has had no active operational engagement over the gold mine, and had been kept apprised of current operational matters.

Prior to withdrawing its financial support for the mine, Firefinch had set a production target of 180 000 oz for the 18-month period to March 2024, with the mine having been targeted to produce some 30 000 oz of gold per quarter.