The Firefinch Ltd (ASX: FFX) share price has soared into the green during afternoon trade on Monday as the company released its results for the half-year ended 30 June 2021.
Firefinch shares are now exchanging hands at 71.5 cents apiece, a 16% gain from the open.
Let's investigate a little further.
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Firefinch share price gains on mixed half year results
The company's net loss for the half-year grew to $6.28 million from $1.07 million the half-year prior, whereas cash and cash equivalents were $58.5 million for the six months ended 30 June. That was well up on the $891,000 in 2020.
Firefinch also increased the mineral resource and ore reserves at its Morila Gold project. The new production profile at the site now demonstrates a capacity of "up to 200,000 ounces per annum during the initial 7 year reserve life", as per the company's release.
Firefinch also realised gold production of 22,525 ounces for the half-year in line with guidance of 21,000-23,500 ounces.
In addition to this progress, the company also gave updates on its binding term sheet with a subsidiary of Jiangxi Ganfeng Lithium Co.
The two have entered into a 50:50 incorporated joint venture (JV) to "develop and operate" the Goulamina Lithium project. In return for Gangfeng's investment(s) into the JV, it will earn a "50% interest" in the project.
Jiangxi Ganfeng is the "world's largest lithium producer by production capacity", as per the company's announcement.
For context, Firefinch intends to "demerge the Goulamina Lithium project into a separate ASX-listed lithium focused entity" to be called "Leo Lithium Limited".
The timing of the demerger all depends on the final investment decision of the JV company and the company seeking shareholder approval for the JV in 2022.
What did management say?
Regarding the Goulamina mine demerger, it stated:
On implementation of the demerger, Firefinch shareholders will receive a pro-rata entitlement of shares in Leo Lithium by way of an in-specie distribution (at no cost). It is also currently intended that Leo Lithium will raise additional capital via an entitlement offer to existing shareholders in parallel with its application for listing. The entitlement ratio, the pricing and quantum of the entitlement offer will be determined closer to the demerger.
Firefinch share price snapshot
The Firefinch share price has posted a year to date return of 297%, extending the outsized gain of 346% over the past 12 months.
The results have far outpaced the S&P/ASX 200 Index (ASX: XJO)'s climb of about 25% over the past year.
