GCIAtlantic Lithium reports positive dialogue with Sayona, as merger with funding partner Piedmont announced
Atlantic Lithium Limited () has held positive discussions with Lucas Dow, the chief executive of lithium giant Sayona, following the announcement of a merger between Sayona and Atlantic’s funding partner Piedmont.
In the discussions Dow committed to continue to support the development of Atlantic’s Ewoyaa lithium project in Ghana.
As a result of the proposed merger, the new company will assume Piedmont's prior obligations, as detailed under the terms of Atlantic Lithium's co-funding agreement with Piedmont in respect of the Project.
Accordingly, it will be required to sole fund US$70 million of the development expenditure for the Project, with any cost overruns shared equally between the Atlantic Lithium and the new company. In return it will earn an interest of up to 50% of the project and the right to an offtake agreement for 50% of the spodumene concentrate production at market rates.
In addition, the management team of the merged entity has extended an offer to key members of Atlantic Lithium’s staff to spend time at Sayona's North American Lithium project in Canada, where production is currently being ramped up towards steady state.
This will enable Atlantic Lithium staff to leverage Sayona's expertise in large-scale mine development, operation and commercial lithium production.
"Following our discussions with Sayona chief executive and MD Lucas Dow and his team, we wholeheartedly welcome the commitment from MergeCo towards the continued funding and development of the company's Ewoyaa lithium project towards production,” said Neil Herbert, executive chairman of Atlantic Lithium.
"With lithium prices expected to remain subdued over the short-medium term, we believe that Ewoyaa's low-cost profile makes it a highly attractive asset in MergeCo's enlarged portfolio. The proposed merger not only emphasises the underlying belief in lithium's role in the global energy transition but also significantly de-risks the funding of the project, at an important juncture in its lifecycle.”
"We look forward to working closely with the MergeCo team to drive Ewoyaa forward to become Ghana's first lithium mine."
View from Vox
The merged Sayona-Piedmont entity will have far greater strength in depth in what are undoubtedly tough markets for lithium miners, and for mining in general. Ewoyaa remains an attractive asset because of its low cost profile and its ability to make money even in the current low price environment. That’s the benefit for Sayona and Lucas Dow. For Atlantic Lithium the proposed merger significantly de-risks the funding of the project towards production, but also extends Ewoyaa’s exposure globally, notably in North America and Australia, including to potential offtakers. This looks to be a positive development
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