Its a good deal and sprott sees it adding 10c to their estimate of value of FFX to 80c 47c is nearly half NAV.
Sprott calls it $260 mill usd too.
We see three key takeaways from today’s announcement of Ganfeng’s US$130m investment in Firefinch’s non-core Goulamina lithium asset. First, it is an important technical stamp of confidence from one of the world’s major integrated lithium producers. Second, it puts a US$260m implied value on the project, daylighting significant value above our US$100m nominal NAV. Third, it again demonstrates Firefinch’s growing track record of achieving its goals in line with stated timelines. Looking at the bigger picture, Firefinch’s focus remains the Morila gold mine, which we believe is one of the best growth opportunities in the gold space, and we expect Goulamina to be spun out as a separate company in the coming quarters. We have updated our Goulamina valuation to US$130m (US$260m x 50%) and increase our target multiple for Goulamina to 0.9x from 0.5x. This increases our price target to A$0.80/sh from A$0.70/sh and we reiterate our BUY rating. Firefinch is one of our top picks among gold developers.
FFX Price at posting:
47.5¢ Sentiment: Buy Disclosure: Held