I think the opening statement is very important & probably deserved to be given more prominence.
“Jiangxi Ganfeng Lithium Co. Ltd. (Ganfeng) and Firefinch have formed an incorporated Joint Venture (JV) to develop Goulamina”
Previously it was a binding term sheet.
In the original Ganfeng JV ASX announcement they said:
“The funds will be invested into Mali Lithium BV (MLB), which will hold Firefinchs interest in Goulamina and in return, Ganfeng will earn a 50% JV interest in MLB.”
In today’s announcement they said:
“. Once a restructure of the Company’s corporate structure has been completed in order to separate its lithium activities from its gold activities, the Project Exploitation Licence will be transferred to the JV company, and the cash will be released from escrow. That transfer is expected to be completed in early 2022”
The way I read it, originally the JV & the demerger were 2 separate things, now they have become a little entwined. MLB was going to hold FFX’s interest in the JV along with Ganfeng’s 50%. With the demerger FFX’s interest would be transferred to Leo. Now it looks like they won’t transfer the license until Leo comes into being. A small technicality they had to work around - good that it’s now sorted.
Because they’ve had to do this work around, I can see them expediting the demerger. The money will be in escrow until the demerger, both parties will not want to see idle money and will push for the demerger ASAP. Hopefully this will not delay the ordering of long lead items.
They have confirmed the updated DFS will include stage 2. It will be interesting to see how this updated DFS (for stage 1) compares with the original. The original used US$666/t compared with present prices north of US$2000 with long term supply shortages projected.
Even more importantly they’ve confirmed the DFS & FID is expected this month. The company will receive the DFS well ahead of releasing it to the market. The format received from Lycopodium would not be suitable for market release & will take some abridging & formatting for an investor friendly version. The company would also be in full communication with Ganfeng so it is very pleasing to get that reconfirmation the DFS & FID is on track for this month.
With the present SP at 75c, what a great base to bounce off with the coming DFS & FID.
