Leo Lithium rejects Firefinch demands amid assets sale

[Redator]

Leo Lithium has launched the sale of its Trailing Product Sales Fee (TPSF), rejecting demands from major shareholder Firefinch Limited to overhaul its board and fast-track the process.

The struggling Australian lithium developer said on Friday the TPSF sale would be “orderly and timely,” with completion expected no earlier than in the first quarter of 2026. An independent adviser will be appointed to oversee the transaction.

The TPSF is tied to production at the Goulamina lithium project in Mali, which Leo Lithium operated in a joint venture with China’s Ganfeng Lithium until last year. 

Firefinch, which spun off Leo in 2022 and remains its largest shareholder, has pressured the company to complete the sale within three months and replace four directors.

Leo dismissed Firefinch’s demands as unrealistic and not in shareholders’ best interests. The board called the attempted board spill “redundant” and “an inefficient use” of Firefinch shareholder funds, noting that all concerns raised had already been addressed.

Proceeds from the TPSF sale, along with surplus cash, will be returned to shareholders as part of a third capital distribution. Before year-end, Leo will return $330 million, including a $265 million unfranked dividend set for October 14 and a $65 million capital return pending shareholder approval.

$537M back to shareholders

By the end of 2025, Leo will have distributed over $537 million, or 95% of proceeds from the sale of its 40% stake in Goulamina to Ganfeng.

The company also revealed it had held talks with Firefinch on several strategic options, including acquisitions, an ASX relisting, and a sale to another listed entity. Leo said Firefinch rejected those proposals and later suggested a merger without demonstrating how it would benefit shareholders.

Leo Lithium was delisted from the ASX on September 22 after nearly two years of suspended trading. Once the current round of capital returns is complete, the company plans to seek shareholder approval for a members’ voluntary winding up. A liquidator would then manage the TPSF sale and final cash distribution before deregistration.

Leo’s planned wind-down reflects the broader downturn in lithium prices since 2022, which has left many junior miners under financial pressure and vulnerable to consolidation.