Firering Strategic Minerals plc (LON:FRG) Non-Executive Director Vassilios Carellas caught up with DirectorsTalk to discuss the background of Ricca settlement, its impact on Firering’s operations, and the company’s strategic direction moving forward.
Q1: A great outcome on the recent announcement with respect to the US$1 million settlement in Firering Strategic Minerals’ favour. Can you just provide some background to this settlement though?
A1: It is indeed a timely and welcome injection of funds into the company’s coffers.
By the way of background, if one recalls, we had a JV with Ricca over our lithium assets in the Ivory Coast, whereby Ricca were meant to fund the development of these assets. Circumstances resulted in the cyclical decline in the lithium space over the last couple of years and Ricca wasn’t able to raise sufficient funding for the project. We, as Firering, ended up using our own resources to fund the development of the drilling that we did at the time and the other work.
So, this downturn lasted a lot longer than anyone anticipated and ultimately resulting in Ricca formally pulling out of the JV in the summer with an amount owing to Firering which has now been formally settled.
Q2: Following Ricca’s withdrawal from the Atex and Alliance projects, what are Firering’s plans to advance or monetise these assets now?
A2: To recap, Firering holds 90% of Atex and 51% of the Alliance licences that together cover both the lithium and tantalum and niobium assets which are key critical minerals. There really does seem to be a shift in sentiment in the lithium space over recent months so timing-wise, this seems to work well for us now that we’re back in full control of these assets, as Ricca didn’t actually meet any of the milestones set in the JV to retain an interest in those licences.
So, the past few months, we’ve seen a few well-known lithium players starting to lift off from their lows in terms of share price. So, I wouldn’t be surprised if a third party got in touch with us to have a chat.
Q3: Will any portion of the settlement funds beyond those allocated for the next Limeco tranche to reach 36.2% interest be distributed to shareholders as a dividend?
A3: There’s no current plan for a shareholder distribution of those funds. All the proceeds will go towards Limeco and funding our next tranche and strengthening the company’s cash reserves.
Q4: What will Firering Strategic Minerals’ do with its 10.6% shareholding in Ricca?
A4: Well, as we understand and announced, Ricca is due to receive gross proceeds of AU$4.4 million from the sale of its gold assets in the Ivory Coast to Skylark Minerals. It is anticipated that Ricca will settle all of its liabilities and then shut down Ricca. So, we expect to receive further funding pro rata to our shareholding, and that theoretically would be the end of our interest in Ricca.
