Atlantic Lithium granted historic mining lease in Ghana, clearing Ewoyaa project for production
() , an Africa-focused lithium explorer, announced that Ghana's Ministry of Lands and Natural Resources has granted a long anticipated mining lease for Atlantic's flagship Ewoyaa lithium project in the country, enabling its advancement toward commercial production.
Ghana's regulator awarded the mining lease to move Atlantic Lithium's lead asset toward production, comprising the proposed Ewoyaa lithium mine and processing plant. Atlantic was granted exclusive rights to carry out mining and commercial production over the Ewoyaa area for an initial 15-year period, renewable in accordance with Ghanaian legislation.
This is the first mining lease to be granted for lithium in Ghana, testifying to the government's support for Atlantic as a partner to deliver long-term lithium production, and marking a milestone in the country's efforts to establish itself as a leader in the decarbonisation and EV industries in Africa.
Under the terms of the mining lease, Atlantic has agreed to list on the Ghana Stock Exchange and, with incentives offered by the government, to undertake studies assessing the viability of feldspar production at Ewoyaa and downstream conversion in Ghana.
Ewoyaa is to be funded by Atlantic's US-based partner Piedmont Lithium and the Minerals Income Investment Fund of Ghana, with an offtake partnering process underway to secure project funding for a portion of the remaining 50% available feedstock.
Atlantic said it would announce next steps regarding the project's development "in the coming weeks".
"Atlantic Lithium has proven to be a highly attentive and collaborative operator in all its activities, setting a strong example of how foreign companies can and should conduct themselves in Ghana. As we look to set out to further develop Ghana's lithium value chain, we believe that the Mining Lease indicates Atlantic Lithium as the country’s preferred partner to achieve these objectives." said Martin Ayisi, CEO of the Minerals Commission of Ghana.
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This is a major and long anticipated announcement from Atlantic Lithium, marking the final go-ahead needed to advance its lead Ewoyaa lithium asset toward production. Atlantic is the first company to be granted a mining lease for lithium in Ghana as Ewoyaa is to become the country's first lithium producing mine, demonstrating the government's intent to establish itself as a leading hub in Africa's EV supply chain, with Atlantic Lithium as an initial key partner.
The mining lease terms, agreed through close cooperation with the government, are in line with Ghana's new Green Minerals Policy, and reaffirm Ewoyaa's strong economics as one of the lowest capex and opex hard lithium projects globally - with strong commercial metrics and profitability potential for a 2.7Mtpa operation, producing a total of 3.6Mt of spodumene concentrate (approx. 350,000tpa) over a 12-year mine life (LOM).
Specifically, per Ewoyaa's updated definitive feasibility study (DFS), the project boasts a post-tax NPV8 of US$1.3bn, with free cash flow of US$2.1bn from LOM revenues of US$6.6bn and average LOM EBITDA of US$280m per year. C1 cash operating costs are estimated at US$377/t of concentrate Free-On-Board Ghana Port, after by-product credits, with an AISC of US$675/t.
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 earlier in the year. Early results from Atlantic's 2023 drilling programme at Ewoyaa have 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.
Overall, Ewoyaa's development cost estimate is US$185m. The project continues to gain funding, as existing US-based partner Piedmont recently committed US$70m and 50% thereafter of the total capex, and Ghana's Mineral Income Investment Fund provisionally agreed to invest US$32.9m. The latter aligned Ewoyaa further with the government's vision for Ghana's mining industry. Atlantic has also commenced an offtake partnering process with a "major investment bank", aiming to attract offers to further expediate and derisk the project. As it stands, once in production Atlantic will own 40.5% of Ewoyaa, Piedmont will own an equal 40.5%, Ghana's Mineral Income Investment Fund will own 6%, and the government of Ghana will own 13%.
As part of the mining lease grant, Atlantic has agreed to undertake a feasibility study to assess the viability of producing feldspar at Ewoyaa. Feldspar is a by-product of the DMS process that Atlantic aims to supply to the Ghanaian ceramics market. An 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.
Overall, the granting of a mining lease represents a considerable derisking milestone in the development of Ewoyaa and puts the project firmly on track to become one of the world’s next major producers of spodumene concentrate. Atlantic finished the fiscal year ended June 30 with A$15.3m after exploration and evaluation expenditures of A$18.0m.
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