Firefinch — Investor Presentation (September 2022)
52 slides from Firefinch's investor presentation, Sep 21, 2022
Slide 1: Equity Raising Presentation
EQUITY RAISING PRESENTATION ASX: FFX September 2022 1
Slide 2: Important Notice
IMPORTANT NOTICE IMPORTANT NOTICE This Presentation is provided subject to the matters set out in the Important Notices and Disclaimer on slides 35 to 51. Firefinch advises you to carefully read and consider the Important Notices and Disclaimer as it contains material information regarding this Pres
Slide 3: Key Transaction Highlights
KEY TRANSACTION HIGHLIGHTS o Morila mine underperformance issues being addressed o Equity raising of A$90M plus up to A$10M Share Purchase Plan for Morila development o Updated Morila Mineral Resource of ~3.3Moz announced on 31 August 2022, representing an increase of 1Moz or +45% o New monthly prod
Slide 4: Transaction Overview
FIREFINCH TRANSACTION OVERVIEW
Slide 5: Addressing Key Issues at Morila
ADDRESSING KEY ISSUES AT MORILA Key Issue Action Resolution o Deferral of mining activities at N’Tiola Pit Production o Consolidation of mining fleet and contractors at Viper Pit and Morila Super Pit and ramp-up o Updated Morila Mineral Resource finalised in August 2022 schedule o Reserve and sust
Slide 6: Progress to Date and Near-Term Milestones
PROGRESS TO DATE AND NEAR-TERM MILESTONES o ECOWAS sanctions lifted July 2022 o Commencement of delivery of new mining equipment o Record monthly production achieved at Morila under FFX ownership of August 2022 8,122 oz of gold o Updated Mineral Resource Estimate announced to the ASX o Agreement
Slide 7: Transaction Summary
TRANSACTION SUMMARY Refreshed Operational Balance Sheet Key Stakeholder Management & Turnaround Reset Support Board o Pivot in mining strategy o Placement of A$90M to o Key stakeholders MEIM and o Significant changes at board targeting higher grade ore provide growth funding and other creditors to c
Slide 8: Strategic Alignment with Key Stakeholders
STRATEGIC ALIGNMENT WITH KEY STAKEHOLDERS Supportive Stakeholders o Support received from key stakeholders who have agreed to convert outstanding creditor positions into Firefinch equity, subject to shareholder approval at an upcoming Extraordinary General Meeting in October 2022 o Strong vote of co
Slide 9: Refreshed Board to Provide Oversight
REFRESHED BOARD TO PROVIDE OVERSIGHT Scott Lowe Brett Fraser Mark Hepburn Bradley Gordon MEIM Board Managing Director Non-Executive Chairman Non-Executive Director Non-Executive Director Representative • Senior mining executive with • Corporate finance executive • Corporate and financial • Seasoned
Slide 10: Experienced Management Team to Drive Excellence
EXPERIENCED MANAGEMENT TEAM TO DRIVE EXCELLENCE Andrew Taplin Tom Plant Bill Oliver Drissa Arama Seydou Semega Acting CEO CFO GM of Geology GM Morila SA Country Manager, Mali Chairman Morila SA • Qualified engineer with 25+ • Experienced senior finance • Geologist with 20+ years • Commenced his mini
Slide 11: Equity Raising – Key Terms
EQUITY RAISING – KEY TERMS o Firefinch is conducting an institutional placement ("Placement" or "Offer") to be conducted via two tranches: • an unconditional tranche of approximately A$10.4M utilising the Offeror’s available placement capacity under ASX Listing Rules 7.1 (“Unconditional Placement” o
Slide 12: Use of Proceeds
USE OF PROCEEDS Key Details Summary Overview Mine development – A$81 million Sources of Funds A$M o Waste stripping from Morila Stage 2 & 3 o Tailings repatriation Equity Raising Proceeds 901 o Tailings dam expansion and lift o Process plant reliability and improvement projects Existing Cash & Equiv
Slide 13: MTPP Assumptions Underpin Funding Plan
MTPP ASSUMPTIONS UNDERPIN FUNDING PLAN o Revenues forecast using conservative gold price estimates Gold Revenues o Current operational parameters being applied (throughput, recovery, grade reconciliation) o Forecast operational costs are made having regard to actual costs at Morila Operating Costs o
Slide 14: Indicative Pro Forma Capital Structure
INDICATIVE PRO FORMA CAPITAL STRUCTURE o Assumes Firefinch raises A$90M via a two-tranche placement in conjunction with ~US$28M of creditor amounts (current and future obligations) converted into equity at the offer price Offer price $0.06 (A$) Existing shares on issue1 (M) 1,181 Shares issued under
Slide 15: Indicative Timetable
INDICATIVE TIMETABLE Proposed Transaction Timetable1 Event Date Launch of Placement and release of Investor Presentation Tuesday, 20 September 2022 Launch of Placement and release of Investor Presentation Wednesday, 21 September 2022 Announce of Placement results Friday, 23 September 2022 Despatch N
Slide 16: Near-Term Production Outlook and Mineral Resource Update
2 NEAR-TERM PRODUCTION OUTLOOK AND MINERAL RESOURCE UPDATE
Slide 17: Revised Mining Strategy
REVISED MINING STRATEGY o Firefinch has undertaken immediate consolidation of its mining operations, with mining (largely pre-stripping) at the N’Tiola pit ceased o N’Tiola mining fleet has been relocated to the Viper pit and mining equipment from Viper relocated to Morila Super Pit resulting at eac
Slide 18: Morila in Pictures
MORILA IN PICTURES MINING OPERATIONS AT VIPER VIPER AND ADDER PITS PRESTRIP UNDERWAY AT THE MSP MORILA PLANT AND TSF MORILA MILLING CIRCUIT TSF – MAIN EMBANKEMENT CONSTRUCTION 18
Slide 19: Updated Medium Term Production Plan (MTPP)
UPDATED MEDIUM TERM PRODUCTION PLAN (MTPP) MTPP Metrics o Medium Term Production Plan (MTPP) covers 18- month period to end March 2024 Period October 2022 to March 2024 o Ore predominantly sourced from Morila, with Duration 18 months Viper ore being fed until Q1 2023 Total Material Movement 58.10Mt
Slide 20: MTPP Quarter by Quarter
MTPP QUARTER BY QUARTER NW rinerincH Gold Production (oz gold) Ounces Produced and Sold Q4CY2022 QiCY2023. Q2CY2023_ Q3CY2023 Q4CY2023 GE Mola MM Viper —AISC Q1Lcy2024 2500 2000 1500 1000 500 AISC (USS/oz) (:000sTonnes) Ore Mi 3 Total Material Movt. ('000s To: mm Ore Mined - Stage 1 12,000 10,000 8,
Slide 21: Comparison with 2021 LOMP
COMPARISON WITH 2021 LOMP LOMP to be updated based on Ore Reserves Refer ASX Announcement September 2022 Refer ASX Announcement 5 May 2021. The Ore Reserves and Life of Mine Plan for Morila are being updated using current modifying factors. The production profile is likely to change as a result of t
Slide 22: New Optimisation vs Previous Design
NEW OPTIMISATION vs PREVIOUS DESIGN o Pit optimisation was generated based on current costs at Morila, it is now being used for Ore Reserve and pit Stage 2 design updates Stage 1 o Optimisation results confirm that the Morila open pit operation remains economically viable Phase 1 o Optimisation resu
Slide 23: Continued Resource Growth and Confidence at Morila
CONTINUED RESOURCE GROWTH AND CONFIDENCE AT MORILA o Firefinch has added over 2Moz of Mineral Resources at the Morila Gold Project since November 2020 o Resource confidence has grown with 77% of Mineral Resource now in Measured and Indicated category (from 8% in November 2020) o Discovery cost of US
Slide 24: August 2022 Resource Update
AUGUST 2022 RESOURCE UPDATE o Morila Gold Project’s total Mineral Mineral Resources for the Morila Gold Project 1 Resources now in excess of 3.5Moz of gold Deposit Measured & Indicated1 Inferred Total (Morila + satellite deposits) Tonnes Grade Ounces Tonnes Grade Ounces Tonnes Grade Ounces (m) (g/t)
Slide 25: Underground Potential
UNDERGROUND POTENTIAL o Firefinch intends to complete a study into underground mining at Morila which will confirm the economics of an underground operation and determine the cut-off grades which should be used for the underground resource o Accordingly, the underground resource is currently defined
Slide 26: A$159M Leo Lithium Stake
A$159M LEO LITHIUM STAKE Largest shareholder of LLL with a 17.61% stake valued at $159 million1 1 Major shareholding Remaining shares escrowed to June 2024 Globally significant Goulamina expected to be amongst the world’s largest spodumene projects 2 project Forecast annual spodumene concentrate pro
Slide 27: Additional Background
FIREFINCH ADDITIONAL BACKGROUND
Slide 28: Exploration Potential - Regional
EXPLORATION POTENTIAL - REGIONAL o Morila Gold Project comprises 540km2 of tenure which overlies favourable Birimian lithologies in a highly prospective shear zone setting o Limited exploration since 2009, when mining ceased at Morila, and the geological team moved offsite o No new exploration holes
Slide 29: Exploration Potential - Morila
EXPLORATION POTENTIAL - MORILA Morila – all drilling 100m below surface Morila – all drilling 200m below surface Morila – all drilling 300m below surface o Only limited historical drilling was carried out to test for extensions to mineralisation below the Morila pit or outside of the immediate area
Slide 30: Firefinch Drilling Results
FIREFINCH DRILLING RESULTS Drilling at Morila has returned multiple, high grade intersections A confirming mineralisation remains open in all directions1 o Morila NE • 10.5m at 34.0g/t from 309.2m • 4.0m at 13.6g/t from 315.2m o Morila Midwest • 15.0m at 7.61g/t from 263.0m incl. 9.0m at 11.1g/t • 2
Slide 31: Underground Potential from Drilling
UNDERGROUND POTENTIAL FROM DRILLING A B o Future drilling to test: • extensions to mineralisation at Samacline; RP EEE shell • potential linkages between Samacline and main Morila Deposit; and/or • potential linkages between Samacline and MidWest zone o Historical drilling at Samacline returned high
Slide 32: ECOWAS Sanctions Lifted
ECOWAS SANCTIONS LIFTED o In January 2022, the Economic Community of West African States (ECOWAS) imposed economic sanctions on the state of Mali in response to the military junta’s proposed arrangements for a power transition to elected civilian rule • Key sanctions included the closure of members’
Slide 33: Social License - Operating in Mali
SOCIAL LICENSE - OPERATING IN MALI Firefinch has strong social intellectual property in Mali, having been in the country for 10 years Dedicated in-country presence to manage and operate Morila Strong local employer with approximately 2,300 employees including contractors, ~96% are Malian people Stro
Slide 34: Appendices
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Slide 35: Key Investment Risks
KEY INVESTMENT RISKS This section identifies the areas that the directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company involves many risks, which may be higher than the risks associated with an investment in other
Slide 36: Key Investment Risks
KEY INVESTMENT RISKS MINERAL RESOURCE AND ORE RESERVES ESTIMATES Ore Reserve and Mineral Resource assessments involve elements of estimation and judgement. The preparation of these estimates involves application of significant judgement and no assurance of mineral recovery levels or the commercial v
Slide 37: Key Investment Risks
KEY INVESTMENT RISKS METALLURGICAL RISKS The economic viability of gold recovery depends on a number of factors such as the development of an economic process route for metal concentrates. Further, changes in mineralogy may result in inconsistent metal recovery. SUPPLY CHAIN The Company relies on a
Slide 38: Key Investment Risks
KEY INVESTMENT RISKS TENURE Morila SA (the owner of the Morila Gold Project) is owned 80% by Morila Limited (Morila Limited is a wholly owned subsidiary of the Company) and 20% by the Government of Mali. The Exploitation Licence held by Morila SA on which the Morila Gold Mine is located was granted
Slide 39: Key Investment Risks
KEY INVESTMENT RISKS ABILITY TO EXPLOIT SUCCESSFUL DISCOVERIES It may not always be possible for Firefinch to exploit successful discoveries which may be made on tenements in which Firefinch has an interest. Such exploitation would involve obtaining the necessary licences, clearances and/or approval
Slide 40: Key Investment Risks
KEY INVESTMENT RISKS LEGAL SYSTEMS IN MALI The legal system operating in Mali may be less developed than more established countries, which may result in risk such as: a) political difficulties in obtaining effective legal redress in the courts whether in respect of a breach of law or regulation, or
Slide 41: Key Investment Risks
KEY INVESTMENT RISKS CRIME AND CORRUPTION Countries in Africa can experience higher levels of criminal activity and governmental and business corruption. Exploration and mining companies operating in certain areas of Africa may be particular targets of criminal actions. Criminal or corrupt action ag
Slide 42: Key Investment Risks
KEY INVESTMENT RISKS GENERAL RISKS RAISING RISKS Firefinch intends to use the funds for the purposes set out on slide 12. However, as the Placement is not underwritten, Firefinch may not raise all of the funds required to satisfy the proposed expenditure set out on slide 12. On completion of the Pla
Slide 43: Key Investment Risks
KEY INVESTMENT RISKS TAX Morila SA has substantial accumulated tax losses and VAT credits available to it. Morila SA has the ability to carry forward these tax losses and offset them against taxable income in future periods. Separately, Morila SA also has the ability to offset against its VAT credit
Slide 44: Key Investment Risks
KEY INVESTMENT RISKS ENVIRONMENT All phases of Firefinch’s operations are subject to environmental regulation in the various jurisdictions in which it operates. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation. They also set limit
Slide 45: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any cou
Slide 46: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and Futures Commission in Hong Kong pur
Slide 47: Foreign Selling Restrictions
FOREIGN SELLING RESTRICTIONS United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000,
Slide 48: Important Notices
IMPORTANT NOTICES IMPORTANT NOTICE AND DISCLAIMER Accordingly, this Presentation does not contain all the information that would be required to be included in a prospectus, product disclosure statement or other disclosure or offer document prepared in accordance with This investor presentation (the
Slide 49: Important Notices
IMPORTANT NOTICES NOT FINANCIAL PRODUCT ADVICE INDUSTRY DATA This Presentation, and the information provided in it, does not constitute, and is not intended to constitute, Certain market and industry data used in connection with or referenced in this Presentation may have been financial product or i
Slide 50: Important Notices
IMPORTANT NOTICES Several important factors could cause actual results or performance to differ materially from the forward- Investors outside Australia should note that while ore reserve and mineral resource estimates of FFX in this looking statements, including (without limitation) the risks and u
Slide 51: Important Notices
IMPORTANT NOTICES PRODUCTION TARGETS You further acknowledge and agree that allocations are at the sole discretion of the Joint Lead Managers and/or Firefinch. The Joint Lead Managers and Firefinch disclaim any duty or liability (including for This presentation contains Firefinch Production Targets
Slide 52: World Class Gold in Mali
WORLD CLASS GOLD IN MALI For more information contact T: +61 8 6419 6100 E: [email protected] ASX:FFX 52