The Firefinch Ltd (ASX: FFX) share price is flat on Thursday despite the company receiving government approval for a transaction regarding its Goulamina Lithium project.
At the time of writing, shares in the emerging lithium and gold producer are unchanged at 60 cents.
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Firefinch share price falters despite project milestone
Firefinch announced that it received a letter of non-objection from the Malian Government for its joint venture transaction with China's world leading lithium producer Ganfeng.
Ganfeng is expected to become a 50% joint venture partner in the Goulamina Lithium Project and provide up to US$194 million in project funding in exchange for life of mine offtake.
The release explained that the final condition precedent is the receipt of Chinese regulatory approvals which will allow the transfer of the Exploitation Licence from the Goulamina Lithium Project to the joint venture company.
Once completed, Ganfeng will provide its first US$39 million cash investment for the Goulamina project. With another US$91 million to be received after the project's final investment decision.
The broader lithium sector opened slightly weaker on Thursday with Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) down 0.71% and 0.76% respectively. This might be a factor weighing on the Firefinch share price despite today's positive news.
Management commentary
Firefinch managing director Dr Michael Anderson commented on the approval.
The support of the Malian Government and local community is key to the success of Goulamina and we are delighted to receive their formal support of our plans to develop this world class project.
Goulamina will be the next large scale global lithium hard rock project to enter production, and the first of its kind in West Africa, with production targeted for 2023.
Together with our partner, Ganfeng, the world's largest lithium chemicals producer, we are working to expand the scale and production capacity of Goulamina and look forward to updating shareholders on the revised DFS in the coming weeks.
What's next for Firefinch?
There's plenty of catalysts for the Firefinch share price before the year end.
The company is working with Ganfeng to update its October 2020 definitive feasibility study (DFS) to enable a final investment decision (FID).
Firefinch said that it anticipates the completion of an updated DFS and FID during the December quarter of 2021.
