The Firefinch Ltd (ASX: FFX) share price continues to be suspended under official quotation since 29 June. This comes despite the company announcing an update regarding the recent sale of its shares.
At the time of writing, the gold miner and lithium developer's shares are frozen at 20 cents apiece.
Firefinch receives cash injection
It seems Firefinch is facing investor concerns over an impending share dilution.
In a statement today, Firefinch advised it has sold 28.6 million shares in lithium peer Leo Lithium Ltd (ASX: LLL).
The transaction took place after market close yesterday at a sale price of 45.5 cents per Leo Lithium share.
Following the sale, Firefinch is expecting to receive net proceeds of around $12.9 million.
Management previously noted that the financing measures will help its current working capital position.
Firefinch holds a remaining 210.9 million shares in Leo Lithium which are subject to escrow until 23 June 2024.
This means that the company is not permitted to deal with or sell the escrowed shares, except in limited circumstances. The latter could be exempted in the event of a takeover or scheme of arrangement.
Furthermore, the escrowed shares represent about 17.61% of Leo Lithium's issued capital.
At 30 June 2022, Firefinch had approximately $35.8 million in cash and US$3.6 million in shipped gold bullion with funds receivable mid-July. This excludes the current shareholding in Leo Lithium and the sale that was executed yesterday.
About the Firefinch share price
A period of unfavourable trading conditions has led the Firefinch share price to sink almost 50% in the past 12 months.
Notably, its shares are down more than 76% year to date.
The company's shares touched a 52-week low of 19 cents on 24 June before going into a trading halt.
Firefinch presides a market capitalisation of around $236 million with approximately 1.18 billion shares on hand.
