Firefinch launches $47 million raise to accelerate development across Morila Gold Mine and progress Goulamina lithium demerger

Firefinch Ltd (ASX:FFX) is out to raise nearly $47 million to drive ramp-up activities at its Morila Gold Mine in West Africa and meet overheads across its gold and lithium businesses. The gold miner and lithium developer entered a trading halt earlier today as it prepared to announce the details of its latest equity raise prior to market close. To bring in the funding, Firefinch intends to issue around 117 million new FFX shares to institutional investors at 40 cents each. The costing represents an 11.1% discount to the last closing price of Firefinch shares and a 13.7% markdown on the five-day volume-weighted average price. Placement to maintain momentum Firefinch managing director Dr Michael Anderson said: “The successful completion of the placement will allow Firefinch to continue our significant momentum in both our gold and lithium businesses as we progress towards becoming a 200,000 ounce per annum gold producer by 2024 at Morila, and finalise completion of the JV transaction with Ganfeng to develop Goulamina. “Since taking on the managing director role in early April 2021, my enthusiasm for the opportunity presented at Morila has continued to grow.  “Firefinch has systematically progressed Morila from a tailings retreatment operation to a West African gold mining operation of scale with demonstrated production credentials and significant upside.” Gold business ramp-up Firefinch’s primary goal is to become a 200,000-ounce gold producer at the Morila Gold Mine in Mali, West Africa, by 2024. To accomplish this, the gold miner has identified two near-term targets to accomplish at its flagship gold operation with the help of fresh funding. First, the ASX-lister wants to achieve gold production increases at Morila, primarily by mining the region’s nearby satellite pits to produce up to 50,000 ounces of gold per annum. Firefinch also intends to conduct mining at the Morila super pit in the second half of next year, rapidly growing gold production to 120,000 ounces per annum. From there, it intends to reach 170,000 ounces of gold production in 2023 before reaching the 200,000-ounce mark in 2024. Simultaneously, Firefinch wants to ramp up activity to reach its second target: deliver on exploration and resource development at ‘Morila the Gorilla’. This involves drilling out the Morila Super Pit, exploring for extensions at depth, evaluating the project’s 650 square kilometres of regional tenure and aiming for a significant increase in resource inventory and an extension in mine life beyond the current 10-year plan. Speaking to the activity at Morila, MD Anderson said: “The team has delivered a life of mine plan, commenced dewatering at the Morila Super Pit, commenced mining at Morila Pit 5, recommissioned the communition circuit, and most recently appointed international contractor, Mota-Engil, and the Malian-owned Inter-Mining Services, as the mining contractors for Morila.  “In summary, the Firefinch team has demonstrated an ability to accomplish our stated goals on time and in a high-quality manner.” Goulamina Lithium gears up for demerger While the fresh capital will go a long way at its flagship gold asset, Firefinch also has plans to utilise the funding as it prepares to spinout its Goulamina Lithium Project. Just weeks ago, the materials stock inked a “watershed” partnership with world-leading lithium producer Jiangxi Ganfeng Lithium Co Ltd (known as Ganfeng) to substantially fund the asset to production. Under the joint venture agreement, Ganfeng has agreed to provide US$130 million in equity funding to support Goulamina’s development, as well as up to US$64 million in debt funding. The deal includes a significant offtake agreement with Ganfeng and primes the West African lithium asset to become “the world’s next lithium mine of scale”, according to Firefinch Chairman Alistair Cowden. Once the transaction is finalised, the ASX-lister will spinout Goulamina into a separate lithium-focused entity to be listed on the ASX. Anderson concluded: “The placement will also provide working capital to support completion of the recently announced Goulamina JV Transaction and the proposed demerger of Goulamina into a separate ASX-listed lithium company to create further value for Firefinch shareholders.”