FFX Shares Down on Goulamina Lithium Project Update (ASX:FFX)
Today, Firefinch Ltd [ASX:FFX] updated investors on the Goulamina Lithium Project, which it is developing as a joint venture with Ganfeng Lithium.
Firefinch Ltd [ASX:FFX] share price is currently down 4.48%, trading at 64 cents per share.
Despite today’s dip, the FFX stock is riding the hot interest in the lithium sector, gaining 230% in the last 12 months.
Goulamina Lithium Project update
As FFX reports, Goulamina is one of the world’s largest undeveloped high-quality spodumene deposits.
In partnership with Ganfeng, Firefinch aims to bring the project into production, establishing a 50/50 joint venture.
Ganfeng will contribute US$194 million in development funding, comprising US$130 million in equity funding and US$40–64 million in debt funding.
Today, FFX also reported that it has been working on an update to the October 2020 Definitive Feasibility Study for the Goulamina project.
Firefinch thinks this can facilitate the fast-tracking of a Final Investment Decision (FID).
Ganfeng and Firefinch also agreed to commence a major two-year drilling program, which will cost almost US$6 million and comprise almost 50 km of drilling.
FFX thinks the expected lift in reserves and resources is anticipated to rank ‘Goulamina even higher among the largest global lithium projects.’
The Definitive Feasibility Study (DFS) update is targeting a 75% increase in production capacity, which would take production from 2.3 million to four million tonnes per year in a phase 2 expansion.
Moreover, spodumene concentrate production is expected to increase from 450,000 tonnes per annum.
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Today’s announcement also came with a demerger update for Leo Lithium.
FFX noted that once the demerger is complete, Leo will become a standalone company with a 50% interest in the JV with Ganfeng.
It’s expected that Leo Lithium will be listed on the ASX by the end of the March 2022 quarter.
The demerger is subjected to a shareholder vote that is expected to take place in February.
Firefinch will retain up to 20% of Leo shares post-demerger, along with eligible shareholders receiving an in-specie distribution of Leo shares at no cost.
Firefinch Managing Director Dr Michael Anderson commented:
‘Considerable progress has been made 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 50km of drilling already underway.
‘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.’
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