Leo Litihum board promises investor cash is coming after Firefinch offensive

An under-siege Leo Lithium has told investors they will get $330 million back within months and ruled out plans to search for a new mining asset, after its biggest shareholder kicked off a campaign to put a broom through the board.

It’s not clear whether the group pushing for the removal of Leo’s four directors — Simon Hay, Amber Banfield, Brendan Borg and Alan Rule — will continue the coup now that Leo has pledged to effectively distribute all of its available cash.

Leo, whose biggest shareholder is delisted Mali gold miner Firefinch, said on Thursday the $330m — largely from the sale proceeds of its failed flagship asset — would be paid back to shareholders in the next three months.

It’s understood the Leo board had been scheduled to meet on Wednesday, the same day a group, including Firefinch director Mark Hepburn, launched a bid to get rid of the board amid claims the junior had been ignoring their demands for the cash to be paid out.

“In addition to the $207m returned to shareholders in January 2025, the company has determined to return a further $330m (approximately 27.4¢ per share) to shareholders,” Leo said in an Australian Securities Exchange filing Thursday morning.

Of that, $265m will be paid out as a largely unfranked dividend on October 14, with a further $65m to come “prior to the end of 2025”. Leo advised it was working with the Australian Tax Office on whether it should mostly be paid as a capital return or unfranked dividend.

Leo will keep “a small amount of cash” in order to secure a sale for its “trailing product sales fee”.

“As a consequence of the decision to terminate the search for a new asset, the company has commenced a process to right-size the organisation,” it said.

Meanwhile, the company advised it was “considering the validity” of a notice calling to replace its board with Chalice Mining chair Derek La Ferla, Deep Yellow and Satterley Property Group non-executive director Greg Meyerowitz, Firefinch’s Mark Hepburn and exploration companies director Peter Cook.

That meeting is due for a vote on November 12.

The two companies’ history goes back several years. Leo Lithium was spun off from Firefinch in 2022 to advance development of the Goulamina lithium deposit in Mali in a joint venture with China’s Ganfeng.

Firefinch meanwhile retained the 80 per cent-owned Morila gold project, also in the West African country, which it acquired from gold giants Barrick and AngloGold for $US28.9m in August 2020.

But mounting production issues at the mine, military coups, exits from the company’s management and issues raising cash eventually resulted in Firefinch delisting in 2024.

Leo and Ganfeng seemingly ran into difficulty negotiating with the Mali government at the time, and Leo eventually sold its 40 per cent slice of the mine to its joint venture partner for a $US342.7 million ($513.8m) cash deal in November 2024.

Leo shares are due to be automatically delisted on Monday because the company has been in a suspension for nearly two years.