PERTH (miningweekly.com) – Lithium developer Leo Lithium, is hoping to fully fund the development of the Goulamina project, in Mali, through its planned initial public offering (IPO).
The Goulamina project is currently held by ASX-listed Firefinch, but will be demerged into a joint venture (JV) with Chinese partner Jiangxi Ganfeng Lithium, known as Leo Lithium.
The Goulamina exploitation licence was recently transferred to Leo Lithium, triggering a $170-million funding package from Ganfeng, which will see $130-million if equity funding provided to the JV company by Ganfeng, with $39-million to be released from escrow and received by the JV company and a further $91-million due to be transferred to the JV company by Ganfeng in the coming days.
Ganfeng is further obliged to provide either $40-million of direct debt or source $64-million of third-party debt.
Leo Lithium MD Simon Hay told the second day of the Paydirt Battery Minerals conference, in Perth, that Firefinch would retain a 20% interest in Leo Lithium, while Firefinch shareholders would receive an in-specie distribution of Leo Lithium shares, at no cost, while an accompanying capital raise was expected to raise sufficient funds to finance Stage 1 of the Goulamina project, if not the full project.
It is 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 project is expected to have a minimum mine life of 21 years, producing 15.6-million tonnes of spodumene concentrate over that period.
A formal investment decision on Goulamina was taken in March this year.