Australia's Firefinch soars on deal with China's Ganfeng for Mali lithium project

(Reuters) - Australian lithium miner Firefinch said on Wednesday it signed a binding deal with China's Ganfeng Lithium to jointly develop and operate its Goulamina project in Mali, sending its shares soaring 25%.

Ganfeng, one of the world's biggest lithium producers, will make cash investments of $130 million for a 50% stake in a joint venture company for the lithium project, Firefinch said.

The Chinese miner also agreed to a purchase up to 100% of the spodumene concentrate -- from which the lithium is extracted -- that will be produced at Goulamina across the life of the mine. A study conducted by Firefinch pegs the life at 23 years.

Firefinch expects to make a final investment decision (FID) on the project within six months of the deal's completion. Reaching an FID is a key condition for Ganfeng to make $91 million worth of the funding.

Shares of Firefinch, on halt since Tuesday, jumped to as much as A$0.570 to their highest since April 2018. Ganfeng's shares, however, slipped about 4% on Tuesday.

 

(Reporting by Vasudha Kaukuntla in Bengaluru; editing by Uttaresh.V)