All conditions precedent for Ganfeng’s investment into the Goulamina Project have now been met following transfer of the Goulamina Exploitation Licence
Firefinch says Ganfeng JV formalised and triggers $170m funding package. (Credit: Alex Banner from Pixabay)
Firefinch Limited (ASX: FFX) (Firefinch or the Company) is pleased to announce that, following the transfer of the Exploitation Licence for the Goulamina Lithium Project (Goulamina or the Project) to Lithium du Mali SA (LMSA) a wholly owned subsidiary of the JV Company, the final condition with respect to Jiangxi Ganfeng Lithium Co. Ltd’s (Ganfeng) investment into the Project has now been satisfied. Firefinch and Ganfeng now each hold a 50% interest in the JV Company.
This follows the satisfaction of all other conditions precedent including securing a ”letter of no objection” from the Malian Government in relation to Ganfeng’s investment into the JV Company and the parties agreeing to make a Final Investment Decision in respect of the Project (refer announcement dated 4 January 2022).
The satisfaction of the conditions precedent triggers US$130 million of equity funding to be provided to the JV Company by Ganfeng, with US$39 million to be released from escrow and received by the JV Company and a further US$91 million is due to be transferred to the JV Company by Ganfeng in the coming days.
Ganfeng is further obliged to provide either US$40 million of Ganfeng direct debt or source US$64 million of third-party debt. Taken together, Ganfeng’s debt and equity funding package of at least US$170 million is expected to substantially fund the Project through the development phase.
Importantly, the procurement and tendering of long lead items for the Project is already underway to accelerate the commencement of construction. Tenders for the ball mill and crushing equipment are expected to be released to providers in early April, well ahead of Leo Lithium Limited’s (Leo) likely listing date to the ASX. Ganfeng is assisting with tenders to be sent to their supplier network in China.
The demerger of Leo (the Firefinch group entity which holds the Company’s interest in the JV) from Firefinch (Demerger) can now proceed. In the coming weeks, Firefinch will issue a definitive timeline for release of the Notice of Meeting and accompanying short form prospectus. If the Demerger is approved by Firefinch shareholders, Leo expects to undertake a pro-rata entitlement offer and seek admission to the official list of ASX.
Firefinch Managing Director, Dr Michael Anderson, said:
“This is a long awaited and significant milestone. We have been working tirelessly to progress the joint venture and demerger process to deliver value for shareholders and are delighted to be on the brink of achieving the intended result.”
Leo Managing Director, Simon Hay, commented:
“This is this a tremendous step along the path to listing Leo Lithium and developing Goulamina as one of the world’s largest lithium producers1. The combined debt and equity funding package of at least US$170 million from Ganfeng means Leo can now accelerate work on the Goulamina Project. Behind the scenes we have been working with our partner Ganfeng, who will provide funding, offtake and operational support to significantly de-risk development. Assuming the approval of Firefinch shareholders, the demerger will bring Leo Lithium to life. I’m incredibly excited about the opportunity ahead and look forward to hitting the ground running come listing.”
Xiaoshen Wang, Vice Chairman of Ganfeng, commented:
“We are very pleased to have cemented our partnership with Firefinch, and soon Leo Lithium, at Goulamina. We believe this project is of significant global importance to the lithium supply chain and look forward to supporting the development of project as we jointly bring the Goulamina into production.”
Source: Company Press Release