Firefinch shares won’t be back online until the company finalises its funding proposal. Here’s how long the gold miner thinks that will take.
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Firefinch Ltd (ASX: FFX) shares are not expected to resume trading until a funding proposal is finalised, which the gold miner anticipates will take until the end of the month. So, in short, late August at the earliest.
Firefinch today released a third letter to the ASX responding to its latest query.
Let’s take a look at what’s been happening with this ASX gold mining share.
What’s happening with Firefinch shares?
So, the drama with Firefinch of late all began on 27 June when the company requested a trading halt.
The following day, the miner announced that two recently appointed board members had resigned.
On 29 June, Firefinch asked the ASX to suspend its shares from quotation. The reason the ASX gave was “pending the release of an announcement regarding an update to operational performance and production guidance at the Morila Gold Project”.
The same day, Firefinch announced that “by mutual agreement” the managing director had resigned.
Firefinch said it would pay the outgoing Dr Michael Anderson $450,000 in contractual entitlements. Anderson was with the company for 14 months.
Firefinch appointed Andrew Taplin as acting CEO and Dr Alistair Cowden as executive chair. Taplin was on a salary of $417,006 per annum (including superannuation) plus incentives before taking on the extra role. Now he’s going to get an extra $10,000 per month.
What’s the latest on the Morila Gold Project?
On 4 July, Firefinch released the update on the Morila Gold Project. It revealed that gold production during the June quarter was well down on guidance due to poor equipment availability and delivery delays on additional equipment because of sanctions imposed on Mali restricting the movement of goods.
The production ramp-up is now behind schedule, so Firefinch had to withdraw its calendar year guidance. Plus, the company stated it was facing rising costs for inputs like diesel and explosives.
The company told the ASX it had a plan to deal with this, including a potential capital raising. But it said it needed more time and asked for an extension of its voluntary suspension until the end of July.
On 11 July, Firefinch announced the resignation of Cowden with Brett Fraser as his replacement.
The ASX asks questions as Firefinch shares stay frozen
On 26 July, Firefinch asked for another extension to its voluntary suspension. It said its discussions with third parties over funding were “not yet complete”. The miner asked for more time to finalise the proposed funding “which is anticipated to occur by the end of August 2022”.
In a third letter to the ASX released to the market today, Firefinch answered questions about when it took delivery of certain equipment.
It also explained the timing of its realisation that sanctions were having a material impact on production at the Morila Gold Project.
In the meantime…
On Monday, Firefinch released its June quarter cash flow and activities report. This revealed a few new details about progress at Morila.
The company said “mining equipment is now arriving at site which will alleviate operational pressures”. Firefinch also said it had implemented cost-saving measures and “enhanced” financial controls.
The company said it expected to provide an upgrade to the Morila resource and reserve estimate in the September quarter. It said this would “feed into a new mine plan, production and cost outlook and forward capital requirements”.
Firefinch reported that the Mali Government had “granted a three-year extension to the Morila Convention demonstrating its endorsement of the ramp-up and revival of Morila”.
As of 30 June, Firefinch had cash and equivalents of $40.8 million available, including gold in transit.
Firefinch shares snapshot
Firefinch shares have fallen by 64% in the year to date. They were trading for 20 cents apiece when the company asked the ASX for the trading halt.
Firefinch shares hit their 52-week low of 19 cents on 24 June.
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Motley Fool contributor Bronwyn Allen 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 Scott Phillips.