Firefinch announces new recapitalisation plans, production target
Firefinch has released its new recapitalisation plans and production target. The firm reached an agreement on a recapitalisation package with its relevant stakeholders, including institutional investor MEIM Morila and other trade creditors, to facilitate the long-term growth of the company.
Acording to Firefinch nonexecutive chairperson Brett Fraser, the company aims to to raise A$90-million to continue production ramp-up at the Morila gold project, in Mali. The recapitalisation will include the proposed A$90-million capital raise, a new agreement with mining services contractor MEIM to convert the $23.4-million of outstanding debt into new shares in the company, reducing outstanding debts and strengthening the balance sheet by negotiating settlements with other trade creditors for the conversion of at least $4.89-million of outstanding debt into new shares, and undertaking a non-underwritten share purchase plan (SPP) to raise a further A$10-million.
Alignment of key stakeholders
“The agreement of the recapitalisation package, together with the alignment of key stakeholders, represents a significant milestone and provides a strong balance sheet to enable the company to continue the Morila production ramp up under the company’s Stage 1 and Stage 2 production plan through to 2024,” said Brett Fraser.
“Under Scott Lowe’s new leadership, the company plans to complete its review of the Morila life-of-mine plan, to release an update to the company’s ore reserve estimates based on the August update to the Morila deposit’s mineral resources and to continue to implement its revised mining, capital expenditure and operational plans to ensure that Morila’s operations are more cost-effective and efficient. We appreciate the strong support that each of MEIM, Morila’s other service providers and the company’s new and existing institutional shareholders have given the company in order to implement the recapitalisation strategy.”
The capital raise will be undertaken in the form of a two tranche share placement, priced at 6c a share. The first tranche of the placement will consist of more than 173.6-million shares, and will raise A$10.4-million under Firefinch’s existing placement capacity.
The second tranche of more than 1.3-billion shares, to raise a further A$79.6-million, will be subject to shareholder approval. Firefinch shareholders are expected to meet at the end of October to vote on the share placement.
Under the SPP, eligible shareholders will be able to subscribe for up to A$30 000 of additional shares in the company, also priced at 6c each, to raise up to A$10-million. The SPP will open on November 1 and close on November 21. The funds raised will go towards the further development of the Morila operation, as well as to fund exploration work and general working capital and to pay aged creditors.
