Firefinch spin-off Leo Lithium has made a lacklustre debut on the ASX, closing its first day of trade around 25 per cent lower than its issue price.
Its listing follows a $100 million initial public offering completed at the end of May, with stock offered to existing Firefinch shareholders at 70 cents on a 1 Leo share for 10 Firefinch share basis.
Leo Lithium will host Firefinch’s Goulamina lithium project in Mali – which it has described as one of the largest lithium deposits globally – tipped to produce a peak of 880,000 tonnes of spodumene concentrate per annum at full pelt.
Stage one project costs were estimated at $US255 million ($A363 million) in 2021, with joint funding and venture partner Jiangxi Ganfeng Lithium set to cover a portion of this in exchange for a 50 per cent interest in the project.
Leo Lithium chair Alistair Cowden said the boards believed it was a “natural and logical time” to demerge, following its partnership with Ganfeng’s subsidiary and a final investment decision on the project.
Firefinch took up a $20 million allocation as part of the demerger to retain a 20 per cent stake, maintaining the gold company’s exposure to the battery metals front.
Former Galaxy Resources chief executive officer Simon Hay has been appointed managing director of the spin-off company.
Meanwhile, Firefinch’s primary focus will turn to the Morila gold mine, also in Mali, in which it has an 80 per cent interest.
Shares in the lithium debutant reached 60 cents during the trading day, before closing at 52 cents.
Its listing comes amid mixed sentiment towards the commodity and speculations that lithium had hit its peak.
Earlier this month, global investment banks Goldman Sachs and Credit Suisse issued bearish outlooks for the market prompted by lockdowns, demand destruction and global economic concerns.
