Why the Firefinch (ASX:FFX) share price started higher today

The company’s shares have dipped after a promising start this morning.

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Key Points

  • The Firefinch share price shot up 4.05% this morning to 77 cents before retreating
  • Management noted its second strongest performance ever for the month of December
  • The company’s Q1 FY22 guidance is on track

The Firefinch Ltd (ASX: FFX) share price started the week on a positive note before retreating slightly in lunchtime trade. This comes after the company announced a trading update to investors before market open.

At the time of writing, the gold and lithium developer’s shares are 1.35% in the red at 73 cents apiece after hitting 77 cents each just after open.

How did Firefinch track in Q4 FY21?

Investors were buying Firefinch shares after the company highlighted a robust performance for the December 2021 quarter.

For the 3 months period (October to December), the company recorded 11,115 ounces of gold produced at the Morila Gold Mine. This result reached towards to upper end of the previous guidance of 10,000 to 11,500 ounces.

Notably, in December, gold production amounted to 4,788 ounces which reflected the company’s second-highest monthly level of production.

Management advised that mining has been ramped-up at the satellite pits where two mining contractors are fully mobilised. Haulage operations from the site to the Morila gold plant have also been established.

As such, quarterly production guidance for the March quarter is expected to be between 10,000 to 11,500 ounces of gold.

Pre-strip operations at the Morila Super Pit commenced on schedule in the first week on 2 January 2022. Firefinch advised that extension drilling is continuing at both the Morila Super Pit and the satellite pits.

Firefinch managing director Michael Anderson commented:

These latest production figures are consistent with our expectations, and at the upper end of guidance. Initial pre-strip at Viper is complete and the Viper pit has developed nicely with our mining contractors now operating consistently and steadily increasing haulage capacity.

Known satellite pit feed will continue to feature prominently in the Q1 2022 production plan as we continue to advance the pre-strip at the Morila Super Pit. Now that we’ve commenced mining Morila the Gorilla, the real value will start to flow in 2H2022 once we’re feeding the plant with Morila ore.

Firefinch share price snapshot

Despite today’s dip, the Firefinch share price has accelerated by 234% in the past 12 months. However, when looking year-to-date, the company’s shares are hovering at a loss of around 15%.

Based on valuation grounds, Firefinch presides a market capitalisation of around $865 million with approximately 1.18 billion shares on hand.

Should you invest $1,000 in Firefinch right now?

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned.  The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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