Photo by: Bloomberg
PERTH (miningweekly.com) – ASX-listed Firefinch has announced a positive final investment decision (FID) for its Goulamina lithium project, in Mali.
An updated definitive feasibility study (DFS), completed in December of last year, estimated that the project would require an initial $225-million investment for the Stage 1 development, producing 506 000 t of spodumene concentrate a year, increasing to 880 000 t/y in Stage 2, for a further investment of $70-million.
The capital cost for the 2.3-million-tonne-a-year Stage 1 operation increased from the $194-million estimated in the initial DFS to $255-million, driven by incremental capital associated with providing the flexibility to readily move to a 4-million-tonne-a-year Stage 2 throughput.
As a result, for the purposes of funding the project, project partner Jiangxi Ganfeng Lithium has agreed to either provide $40-million of Ganfeng provided debt or to arrange up to $120-million in third party debt, up from the previously agreed $64-million.
The updated DFS estimated a minimum mine life of 21 years, with Goulamina projected to produce 15.6-million tonnes of spodumene concentrate over that period. The study estimated a pre-tax net present value of A$5.6-billion and an internal rate of return of 97.8%, with the project’s all-in sustaining costs over the life-of-mine reaching $365/t.
Firefinch on Tuesday said that following these overwhelmingly positive results, the boards of both Firefinch and Ganfeng have now approved FID.
“The approval of FID represents yet another major milestone for the Goulamina project. Clearly the outcomes of the DFS update have been extremely compelling to the boards of both companies and it is a testimony to the project’s credentials that the partners have moved so quickly and collaboratively to commit to the development of Goulamina,” Firefinch MD Dr Michael Anderson, said.
“We sincerely look forward to maintaining the positive momentum into the New Year as site-based activities increase.”
Firefinch and Ganfeng have agreed to waive the FID condition to the payment of the final $91-million of Ganfeng’s $130-million contribution upon the formation of the incorporated joint venture (JV). The major remaining condition precedent to the formation of the Goulamina JV is the transfer of the project exploitation licence to a single purpose Malian subsidiary as required by Malian legislation.
An internal re-organisation of Firefinch subsidiaries is in progress to permit this transfer, which is expected in early 2022 and, upon the satisfaction of other condition precedents, will allow the formation of the Goulamina JV, the payment of the final $91-million of Ganfeng’s contribution, and the release from escrow of the $39-million first payment made last year.