- Firefinch (FFX) is facing funding issues, insufficient production levels, and delays at the Morila mine in Mali
- Production is falling short of its guidance to around 13,300 ounces due to a lack of equipment, further impacting its plans to ramp up activities
- Additionally, the company is making operational changes to address escalating cost pressures, including a reduction in its board size and ceasing mining at the N’Tiola Satellite pit
- It will work to finalise a funding proposal over the next month, with trading of its shares to be suspended until then
- Shares in the company last traded at 20 cents each
Pressure has mounted for gold miner, Firefinch (FFX), as the company faces funding issues, insufficient production levels, and delays at the Morila mine in Mali.
Production from the project for the June quarter fell short of its guidance and is expected to land at about 13,300 ounces of gold, below the guidance of 17-20,000 ounces of gold.
It has now withdrawn its previous 2022 production guidance and will provide an updated estimate when available.
The underperformance was attributed to a lack of equipment, triggered by sanctions imposed on the State of Mali which restricts the movement of goods.
As a consequence, the company’s plans to ramp up production have now been delayed.
In addition to these difficulties, Firefinch has faced increased cost pressures over the last quarter, due to the strong US dollar and inflation.
To improve cash flow, it made a number of operational changes including a reduction in the size of its Board and ceasing mining at the N’Tiola Satellite pit.
“A confluence of events, including cost inflation, ECOWAS sanctions and contractor performance has resulted in underperformance at Morila,” Executive Chairman Allistair Cowden said.
“The board has acted decisively to address this with management changes, cost cutting, a pivot in the mining strategy and the acceleration of a new mine plan to inform the way ahead. I also want to make it clear that the orebody has not underperformed, rather production has not ramped up as fast and as cost effectively as planned.”
At the end of June, Firefinch has about $35.8 million in cash and US$3.6 million (A$5.2 million) in shipped gold bullion.
The company will work to finalise a funding proposal over the next month, with trading of its shares to be suspended until the end of July so it can fully assess its financial position.
Shares in FFX last traded at 20 cents each.