Ganfeng To Provide Support For Goulamina Lithium Project
Firefinch Limited (ASX: FFX) has executed a binding term sheet (with a subsidiary of the world’s largest lithium producer by production capacity, Jiangxi Ganfeng Lithium Co. Ltd to establish a 50:50 incorporated joint venture (JV) to develop and operate the world-class Goulamina Lithium Project in Mali.
Ganfeng will make cash investments of US$130 million. The funds will be invested into Mali Lithium BV (MLB), which will hold Firefinch’s interest in Goulamina and in return, Ganfeng will earn a 50% JV interest in MLB. These funds, together with up to US$64 million in debt funding, which is to be arranged by Ganfeng, are expected to fund Goulamina into production.1, 2
Ganfeng will invest a total of US$130 million in three stages comprising:
- a US$2.5 million deposit (which has already been paid), which reflects Ganfeng’s commitment to progress the Transaction to completion;
- an initial subscription of US$39 million (less the Deposit) in exchange for 15% of the shares in MLB, with proceeds used to fund detailed engineering and securing long lead capital items for Goulamina; and
- a final subscription of US$91 million to be made upon a Final Investment Decision (FID) for the Goulamina Project to increase Ganfeng’s total shareholding in MLB to 50%.
The Goulamina Definitive Feasibility Study (DFS) envisages production to average 436,000 tonnes per annum of high quality spodumene concentrate for an initial 23-year mine life. This equates to approximately 64,700 tonnes per annum of Lithium carbonate equivalent (LCE). This production profile will make Goulamina one of the world’s premier lithium producers. It is expected that FID will be reached within six months of the Transaction completing.
Firefinch Chairman, Dr Alistair Cowden,said to provide further support for Goulamina, Ganfeng has agreed to enter into an offtake agreement for up to 100% of spodumene concentrate product produced at Goulamina across the life of mine.
Ganfeng will receive offtake rights to 50% of the offtake on FID and the receipt of the Final Investment. To ensure Goulamina is developed in a timely manner, the remaining 50% of offtake will be assigned to Ganfeng, subject to the provision of Ganfeng Debt and Goulamina reaching commercial production within four years of the Transaction completing. Firefinch will be the operator and manager of Goulamina with assistance from Ganfeng in processing and other disciplines.
“This is a watershed moment for the Goulamina Lithium Project and an outstanding result for shareholders. It is a testament to the quality of Goulamina to have attracted a partner of Ganfeng’s calibre, being one of the world’s leading lithium producers responsible for supplying tier 1 battery players and OEMs such as BMW, LG Chem and Tesla,” Dr Cowdensaid.
“Goulamina now stands to be the world’s next lithium mine of scale. Gangfeng are contributing funding and lithium expertise to transform Goulamina into one of the world’s largest global producers. The offtake deal effectively integrates and elevates Goulamina into the global lithium supply chain at an optimal time for battery metals demand.
“We are delighted to welcome Ganfeng as a partner to Goulamina as we jointly work towards fast tracking the development of the project, leveraging Firefinch’s in-country operational expertise.
“Importantly, the transaction will deliver several benefits for Mali, providing a clear pathway for the country to host the first spodumene concentrate operation in West Africa, thereby opening Mali for further investment focussed on the battery metals and renewables space. Moreover, the transaction supports the creation of local employment opportunities, the establishment of local infrastructure and the fast tracking of community engagement plans to assist the needs of local communities.”
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