Firefinch takes rain check on placement

Firefinch says it is evaluating alternative funding options after pulling the pin on a planned capital raising, pointing to a weaker gold price and Australian-US dollar exchange rates.

Shares in the gold producer and lithium developer have been in a voluntary suspension since June, weeks before it unveiled a raft of issues at its flagship Morila gold mine in Mali.

Production fell sharply short of targets amid sanctions imposed on West Africa, which had caused equipment access issues, and ballooning cost pressures at the project.

As a result, Firefinch has been working on a funding proposal to address its working capital position, which was at approximately $35.8 million per the most recent update.

The company informed investors on Monday however that those plans would be put on hold, citing a weaker gold price and exchange rate.

“Having regard to recent downward movements in the US dollar gold price and the Australian dollar-US dollar exchange rate, the company, in consultation with the joint lead managers to the placement, have determined that it is not appropriate to complete the Placement as currently contemplated,” Firefinch said in a statement.

“The company and the joint lead managers are now considering alternative funding options.”

Firefinch shares are still in a trading halt and last changed hands at 20 cents.