The Firefinch Ltd (ASX: FFX) share price is on course to end the week on a positive note.
In morning trade, the gold and lithium explorer’s shares are up over 3% to a new multi-year high of $1.08.
Why is the Firefinch share price pushing higher again?
Investors have been bidding the Firefinch share price on Friday following the release of a positive update on its Goulamina Lithium Project in Mali.
According to the release, Firefinch’s Goulamina Lithium Project Joint Venture Company has received cash funding of US$130 million from fellow 50% partner Jiangxi Ganfeng Lithium.
The release notes that the US$130 million of equity funding provided to the joint venture by Ganfeng comprises US$39million that was released from escrow and a further US$91 million second tranche investment.
But it won’t stop there. Ganfeng is further obliged to provide either US$40 million of Ganfeng direct debt or source US$64 million of third-party debt to complete its investment.
This means that combined, Ganfeng’s equity and debt funding package will be a total of at least US$170 million. This is expected to substantially fund the Goulamina Lithium Project through the development phase.
Though, this project will not actually be part of Firefinch for much longer. The company is in the process of pushing ahead with a demerger of the Goulamina Lithium Project into a separately listed company, Leo Lithium. This will be completed in accordance with regulatory timeframes
Earlier this year, Firefinch appointed Simon Hay to lead the Leo Lithium business. He has great experience in taking a lithium miner through from development to production from his time leading Galaxy Resources.
Mr Hay exited the role as CEO of Galaxy Resources following the completion of the A$5 billion merger of equals with Orocobre to create the world’s fifth largest lithium producer Allkem Ltd (ASX: AKE).
Time will tell if Leo Lithium is as successful as Galaxy was.