PERTH (miningweekly.com) – The demerger of the Goulamina lithium project, in Mali, into a separately listed vehicle known as Leo Lithium, is expected to be implemented by February next year, with the spin-out to be listed on the ASX by the end of the March quarter.
ASX-listed Firefinch and lithium developer Jiangxi Ganfeng Lithium Co earlier this year struck an agreement under which Ganfeng would make a $130-million cash investment in return for a 50% interest in the project vehicle, and would also secure up to $64-million in debt funding that would bring the Goulamina project into production.
Firefinch on Wednesday told shareholders that following the receipt of Chinese regulatory approvals, and on advice of non-objection from the government of Mali, the fist tranche of the equity is expected into the escrow account.
On completion of the restructure of the joint venture (JV) subsidiaries, and the transfer of the exploitation licence for the project to a subsidiary of the JV company, the cash will be released from escrow. This transfer is slated for before the end of 2021.
“Considerable progress has been made in advancing Goulamina over the past few months. The key takeaway is that following the proposed demerger in 2022, Goulamina will be substantially funded, with engineering and procurement well progressed and 50 km of drilling already under way,” said Firefinch MD Dr Michael Anderson.
“Importantly, Goulamina will be on a quick path to production, expected in 2023, and in an enviable position to take advantage of prevailing very strong lithium market conditions.”
The JV parties have been working to update the definitive feasibility study (DFS) for the Goulamina project, which will facilitate a final investment decision.
A 2020 DFS into the Goulamina project estimated that it would require a capital investment of $194-million, 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.
The original study design for the plant has now been reconfigured to allow for the addition of a second process train to increase throughput by 70% to 75% to four-million tonnes a year.