GCIAtlantic Lithium advances Ewoyaa toward production in FY23 as project's economics strengthen
() , an Africa-focused lithium explorer, released a trading update for the year ended 30 June 2023 (FY23).
Atlantic significantly advanced its flagship Ewoyaa lithium project in Ghana during the period. A definitive feasibility study for the project indicated strong economics and profitability potential for a 2.7 Mtpa operation, producing 3.6Mt of spodumene concentrate over a 12-year life of mine (LOM).
Ewoyaa's resource was materially upgraded during the fiscal year to 35.3 Mt at 1.25% Li2O, including 28 Mt in the Measured and Indicated categories. A mining lease has been submitted and a front-end engineering design (FEED) was completed for the Ewoyaa processing plant.
Progress continued post-period with the appointment of DRA Global to conduct a scoping study to assess the viability of an additional flotation circuit downstream to the proposed Dense Media Separation (DMS) processing plant. An MOU was also signed with the University of Mines and Technology, Tarkwa (UMaT) to evaluate the potential of producing feldspar as a by-product at Ewoyaa.
On the corporate front, a non-binding heads of terms was signed with Ghana's Mineral Income Investment Fund (MIIF) to invest US$32.9m in Atlantic and its Ghanaian subsidiaries to support the development of Ewoyaa. There was also further commitment from Atlantic's partner Piedmont to sole fund the first US$70m and 50% of any subsequent development towards the US$185m estimated expenditure for Ewoyaa.
Additionally, Atlantic appointed Kieth Muller as CEO and commenced trading on the ASX under ticker "A11". Atlantic was also granted eligibility for its shares listed on the OTCQX Best Market in the US for electronic clearing through the Depository Trust Company (DTC).
View from Vox
A busy year for Atlantic Lithium as it significantly advanced its lead asset toward production. With each study the Ewoyaa lithium project's economics have improved and risk lowered. Most recently, the DFS indicated production of 3.6Mt spodumene concentrate over a 12-year mine life, delivering free cash flow of US$2.4bn from US$6.6bn of LOM revenues, a post-tax NPV8 of US$1.5bn and an Internal Rate of Return of 105%.
The DFS used the new 35.3Mt at 1.25% Li2O Mineral Resource Estimate for the project, increased from 30.1Mt at 1.26% Li2O during the period. Early results from Atlantic's 2023 drilling programme at Ewoyaa have further enhanced the project's value, recently indicating significant mineralisation outside the current resource estimate.
The DFS also included modular DMS units and an increased throughput of 2.7Mtpa. Early revenue generated by the modular DMS units will reduce the peak funding requirement for the mine build, which is Atlantic's justification for choosing the technology.
Stage 2 of Ewoyaa's development plans to incorporate a feldspar circuit. Feldspar is a by-product of the DMS process that Atlantic intends to supply to the Ghanaian ceramics market. The MOU recently signed with the University of Mines and Technology (UMaT) aims to evaluate the potential for producing feldspar, quartz, and muscovite as by-products of spodumene production at Ewoyaa.
The project continues to gain funding, as existing US-based partner Piedmont committed US$70m and 50% thereafter of the total US$185m estimated development expenditure for Ewoyaa, and Ghana's Mineral Income Investment Fund provisionally agreed to invest US$32.9m in the project. The latter aligned the project further with the Government of Ghana's vision for its mining industry.
Looking ahead, the next major catalyst for Ewoyaa will be the award of a mining lease, which would start the permitting phase, setting sights next on the mine build. Atlantic finished the fiscal year with A$15.3m after exploration and evaluation expenditures during the period of A$18.0m.
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