Atlantic Lithium reports steady progress at Ewoyaa in 4Q update
( ), an Africa-focused lithium explorer, updated markets on 4Q22 trading.
Operating Highlights
During the period, Atlantic submitted a mining license application for its Ewoyaa lithium mine in Ghana. Atlantic also completed its infill diamond core and reverse circulation drilling programme at Ewoyaa to a total of 47km.
Atlantic recently reported assay results from Ewoyaa for a further 26km of infill and exploration drilling outside the current 30.1Mt at 1.26% Li2O mineral resource, providing potential for a further resource upgrade.
In 4Q22, Atlantic received its highest reported diamond drilling assay of 6.78% Li2O over 1m in hole GDD0071 from 30m and its highest single reverse circulation assay to date of 4.52% Li2O over 1m in hole GRC0704 from 54m and 3.99% Li2O from 53m.
Atlantic also awarded a processing plant FEED contract to Primero Group, appointed Keith Muller as its new CEO, and appointed Roux Terblanche as project manager for Ewoyaa.
Financial Highlights
Key financial items include net cash used in operating activities during the period of $A2.4m, while investment in exploration and evaluation of the assets was $A5.9m. Contributions from the Piedmont farm-in arrangements was $A4.8m, resulting in a period end cash balance of approximately A$19.1m (£10.9) as at 31 December 2022.
View from Vox
Today's update from Atlantic presented a good summary of the company's accomplishments in 4Q22 that have driven its stock price up 25.5% in the past 6 months and 8.14% YTD.
During the period, Atlantic filed a mining license application for its Ewoyaa lithium project in Ghana, appointed a new CEO, awarded a processing plant FEED contract to Primero Group, appointed a new project manager, and continued to advance Ewoyaa with further drill results received earlier this month confirming robust economics for Ewoyaa.
Ewoyaa is Atlantic's flagship project, aiming to be Ghana's first lithium-producing mine, having secured a US$103m project development funding via a partnership agreement with NASDAQ/ASX-listed Piedmont Lithium. The project, located approx. 100km southwest of the capital of Accra, has proven to produce a premium SC6 product suitable for conversion to battery-grade lithium carbonate and hydroxide.
Location of the Ewoyaa Lithium Project in Ghana
Atlantic has already lodged a mining license application for Ewoyaa to the Minerals Commission of Ghana. Earlier this month, Atlantic received very encouraging assay results from its now completed 47km resource evaluation and exploration programme at the site.
The new batch of assay results confirmed significant near-surface mineralisation outside the current MRE of 30.1Mt @ 1.26% Li2O. Based on the results, investors should expect a resource upgrade for Ewoyaa in 1Q 2023, followed by a definitive feasibility study (DFS) by mid-2023.
Location of reported assay results and drillhole IDs with highlight drill intersections at >10 lithium x meters metal content
Ewoyaa's recently announced pre-feasibility study already demonstrated significant profitability potential for a 2 Mtpa operation, producing an average of 255,000tpa of 6% Li2O spodumene concentrate (SC6) over 12.5 years with an average life of mine (LOM) EBITDA of US$248m/year. The study showed LOM revenues exceeding US$4.84bn, a post-tax NPV8 of US$1.33bn, and IRR of 224% with estimated capital costs of US$125m and a short payback period of 5 months.
Last month, Atlantic awarded a FEED contract to Primero to "optimise the project's flow sheet, identify long lead items, maximise the project's long-term profitability, [and] reduce execution risk".
Primero has extensive experience delivering large-scale construction contracts. The company has provided services for a number of lithium projects with comparable flow sheets to Ewoyaa's, including Bald Hill (Tawana Resources), Pilgangoora (Pilbara Minerals), Finnus Lithium (Core Lithium), Mt Holland (Covalent Lithium), and Xuxa (Sigma Lithium).
With demand for lithium and critical metals on the rise, we recommend investors interested in renewable energy Atlantic Lithium as the company and its partner work to deliver Ghana's first lithium mine.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.