REG - Atlantic Lithium Ltd - Quarterly Activities and Cash Flow Report
31/07/2023 07:00
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RNS Number : 6859H Atlantic Lithium Limited 31 July 2023
31 July 2023
Quarterly Activities and Cash Flow Report
for the quarter ended 30 June 2023
Landmark Definitive Feasibility Study reaffirms Ewoyaa's status
as an industry-leading near-term spodumene concentrate producing mine
The Board of Atlantic Lithium Limited (AIM: ALL, ASX: A11, OTCQX: ALLIF,
"Atlantic Lithium" or the "Company"), the African-focused lithium exploration
and development company targeting to deliver Ghana's first lithium mine, is
pleased to present its Quarterly Activities and Cash Flow Report for the
period ended 30 June 2023.
During the quarter, the Company announced a Definitive Feasibility Study(1)
("DFS") for the Ewoyaa Lithium Project ("Ewoyaa" or the "Project") in Ghana,
confirming the Project's economic viability and exceptional profitability
potential, representing a major milestone in the Company's pathway to
production.
Highlights from the Reporting Period:
Project development
- Definitive Feasibility Study(1) reported for the Ewoyaa Lithium
Project indicating exceptional economic outcomes and profitability potential
for a 2.7Mtpa steady state operation, producing 3.6Mt of spodumene concentrate
over a 12-year Life of Mine ("LOM"):
· Post-tax NPV(8) of US$1.5bn, with free cash flow of US$2.4bn from
LOM revenues of US$6.6bn, Internal Rate of Return ("IRR") of 105%;
· Average LOM EBITDA of US$316 million per annum, short payback of 19
months;
· C1 cash operating costs of US$377/t of concentrate Free-On-Board
("FOB") Ghana Port, after by-product credits, All in Sustaining Cost ("AISC")
of US$610/t;
· Capital cost estimate of US$185 million; US$127.5 million to be
provided by funding partner Piedmont Lithium (NASDAQ: PLL; ASX: PLL,
"Piedmont") as part of existing agreement (refer announcement of 1 July 2021);
· Increased Production Target of approx. 350,000tpa of spodumene
concentrate compared with Pre-Feasibility Study target of 255,000tpa (refer
announcement of 22 September 2022);
· Early-stage revenue potential via construction of a Modular DMS
plant for starter-pit operations;
· DFS incorporates Mineral Resource Estimate(1) ("MRE") of 35.3Mt @
1.25 Li(2)O, Ore Reserves of 25.6Mt @ 1.22% Li(2)O and LOM concentrate pricing
of US$1,587/t, FOB Ghana Port.
- The Company awaits approval of Mankessim licence consolidation ahead
of resubmission of Mining Lease application for the Project.
Post-period end
- Appointment of DRA Global Limited ("DRA") to conduct a Scoping
Study to assess the viability of an additional flotation circuit downstream to
the proposed Dense Media Separation ("DMS") processing plant.
· The flotation circuit Scoping Study is underway, with an outcome
expected in Q4 2023.
Exploration
- Advancement of 2023 resource and exploration drilling programme at
Ewoyaa:
· Initial assay results received for 2,208m of infill reverse
circulation ("RC") drilling confirming mineralisation continuity at the Ewoyaa
South-2 deposit:
- Multiple high-grade drill intersections reported as downhole
intercepts, with true widths estimated in the intersections table, including
highlights at a 0.4% Li(2)O cut-off and a maximum 4m of internal dilution of:
o GRC0892: 57m at 1.17% Li2O from 45m
o GRC0899: 54m at 1.14% Li2O from 3m
o GRC0900: 41m at 1.16% Li2O from 73m
o GRC0909A: 33m at 1.12% Li2O from 78m
o GRC0896: 18m at 1.16% Li2O from 80m
o GRC0908: 19m at 0.93% Li2O from 47m
o GRC0906: 11m at 1.5% Li2O from 38m
o GRC0906: 17m at 0.91% Li2O from 54m
o GRC0908: 10m at 1.53% Li2O from 33m.
· Completion of soil geochemistry survey with analysis underway.
· Continuation of planned 20,000m auger drilling programme with
analysis underway.
Corporate
- Appointment of Keith Muller as Chief Executive Officer and Len Kolff
as Head of Business Development & Chief Geologist.
· Changes aligned with the Company's strategy to strengthen mine
operating skills and to identify long-term growth opportunities for the
Company.
- Appointment of Keith Muller and Patrick Brindle to the Company's
Board of Directors.
- Joined the International Lithium Association as an Associate
Member.
- Granted eligibility for the Company's common shares listed on the
OTCQX® Best Market ("OTCQX") in the United States for electronic clearing and
settlement through the Depository Trust Company ("DTC").
- Cash on hand at end of quarter was A$15.3 million.
Post-period end
- Appointment of Aaron Maurer as Head of Operational Readiness.
Sustainability
- Awarded Exploration Company of the Year (Mining) at the Ghana-West
Africa Business Excellence Awards 2023.
- Sponsorship of Central Region's May Day events for the community in
the Mfantseman municipality.
Commenting on the Company's latest progress, Neil Herbert, Executive Chairman
of Atlantic Lithium, said:
"The June quarter has seen substantial progress in the Company's development.
"We were delighted to appoint Keith Muller as CEO to lead the Company at this
important time in the Project's development. As one of only a handful of
people with proven lithium mine operating experience globally, Keith's
appointment as CEO attests to Atlantic Lithium's vision of achieving near-term
lithium production at Ewoyaa.
"Keith has been pivotal in delivering the Definitive Feasibility Study this
quarter, which represents a significant de-risking milestone and reaffirms
Ewoyaa as a low capex and low opex project with impressive profitability
potential.
"Over a 12-year mine life, the DFS indicates the production of 3.6Mt spodumene
concentrate, delivering free cash flow of US$2.4bn from US$6.6bn Life of Mine
revenues, a post-tax NPV(8) of US$1.5bn and an Internal Rate of Return of
105%. Ewoyaa benefits from exceptional fundamentals, including adjacent
infrastructure and the support of our surrounding host communities, which
underlie our confidence in the delivery of the Project.
"Having only drilled 3% of the Company's tenure in Ghana, there also remains
significant value upside through exploration. As such, we continue to advance
our drilling activities across Ewoyaa and the wider Cape Coast Lithium
Portfolio. While our current focus is on delivering first production at Ewoyaa
to capture the current higher lithium prices, we are continuing our
exploration strategy, which has proved highly successful in growing the
Company to date.
"We believe that Ewoyaa is one of the leading hard rock lithium assets
globally. We are, therefore, driven to achieve our objective of near-term
production in Ghana."
Commenting on the Definitive Feasibility Study, Keith Muller, Chief Executive
Officer of Atlantic Lithium, added:
"The plant has been designed to maximise metal recovery, enhancing NPV and
generating robust margins over the life of the mine, aiming to withstand
potential downturns in the market. Ewoyaa's favourable mineralogy enables a
simple flow sheet and a low energy and water-intensive conventional Dense
Media Separation plant from open pit mining.
"The mine plan outlined in the DFS considers 94% of the ore processed over the
Life of Mine as Reserves, with Inferred Resources excluded from the first five
years of operations, providing greater confidence in the viability of the
Project.
"Deployment of a Modular DMS unit, processing 450,000t of ore while
construction of the main plant gets underway, represents both a means of risk
mitigation and a source of early revenue. With DMS processing still a new
concept in Ghana, the Modular DMS unit will enable our staff to train on a
smaller scale operation during the build of the main plant and identify and
engineer out any bottlenecks that may arise.
"We also recognise the current trend, particularly in Africa, against
exporting raw materials. In line with this thematic, the first year of Modular
DMS is expected to produce c. 38kt of spodumene concentrate and 170kt of
lower-grade secondary product.
"Early Modular DMS revenue, estimated at approx. US$170 million, is intended
to reduce the peak funding requirement of the main plant and provide
additional working capital. By purchasing the unit, we retain optionality to
utilise Modular DMS processing at a later stage in the mine schedule, for
example to capture inflated lithium prices or as a bolt-on processing route to
operate alongside the main plant.
"Of the total US$185 million capex outlined in the DFS, we expect Piedmont
will fund c. 70%, comprising US$70 million of initial sole funding and 50% of
capex thereafter. Atlantic Lithium is in a desirable position as a near-term
spodumene producer in having 50% of the Project's offtake still available. We
have received considerable interest for the remaining offtake and are
considering the possibility that the remaining share of the Company's capex
requirement could be financed through a pre-payment deal, among other funding
alternatives. Management, however, is focused on funding alternatives which
maximise shareholder value and minimise dilution.
"Post-period, we appointed DRA Global Limited to undertake a Scoping Study to
assess the viability of including an additional flotation circuit downstream
to the main DMS plant. 4.7Mt of 1.2% Li(2)O fines material, outlined in the
DFS to be sold as a secondary product, represents a potential feedstock for
the flotation circuit, which, we believe, would further enhance the Project's
economics. Again, we expect to deliver an outcome of the Scoping Study later
this year.
"Following the release of the DFS, we now are working on a clear pathway
towards spodumene concentrate production at Ewoyaa. As we await the award of
the Mining Lease from the Minerals Commission, which we hope to be granted in
the current quarter, the coming months are pivotal in the Project's
development. We look forward to providing further updates in due course."
Figures and Tables referred to in this release can be viewed in the PDF
version available via this link:
http://www.rns-pdf.londonstockexchange.com/rns/6859H_1-2023-7-31.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/6859H_1-2023-7-31.pdf)
Ewoyaa Lithium Project, Ghana, West Africa
Ewoyaa is the Company's flagship project, targeted to become Ghana's first
lithium-producing mine.
The Project has secured project development funding via a partnership
agreement with Piedmont Lithium Inc. (NASDAQ: PLL; ASX: PLL, "Piedmont", refer
announcement of 31 August 2021). The Project, located in Ghana, West Africa,
approximately 100km southwest of the capital of Accra, comprises eight main
deposits, including Ewoyaa, Okwesi, Anokyi, Grasscutter, Abonko, Kaampakrom,
Sill and Bypass. The Project is well located being adjacent to operational
infrastructure including within 1km of the Takoradi - Accra N1 highway, 110km
from the Takoradi deep-sea port and adjacent to grid power, within the
pro-mining jurisdiction of Ghana (refer Figure 1). The Project is proven
capable of producing spodumene concentrate suitable for conversion to
battery-grade lithium carbonate and hydroxide.
Figure 1 Location of the Ewoyaa Lithium Project
Interest in Tenements
At the end of the quarter ending 30 June 2023, the Company had an interest in
the following tenements:
Tenement Number Tenement Name Principal Holder Grant Date / Application Date Expiry Date Term Change during Quarter
Australia
EPM 16260 Cadarga Two(**) Eastern Exploration Pty Ltd 12.06.21 11.06.23 2 years Agreement to sell
EPM 16261 Cadarga One(**) Eastern Exploration Pty Ltd 28.05.21 27.05.23 2 years Agreement to sell
Ghana
PL3/67 Apam East Obotan (JV MODA Minerals Limited) 27.06.19 26.06.22* 3 years None
PL3/92 Apam West Obotan (JV MODA Minerals Limited) 21.08.19 20.08.22* 3 years None
RL 3/55 Mankessim Barari DV Ghana Limited (90% Atlantic) 27.07.21 26.07.24 3 years None
PL3/102 Saltpond Joy Transporters Ltd (100% Atlantic) 21.08.19 20.08.22* 3 years None
PL3/109 Mankessim South Green Metals Resources Ltd (100% Atlantic) 19.02.20 18.02.23* 3 years None
PL3/106 Cape Coast Joy Transporters Ltd (100% Atlantic) 15.11.21 14.11.24 3 years None
Senya Braku Green Metals Resources Ltd (100% Atlantic) 10.05.16 Application None
Asebu (Winneba North) Green Metals Resources Ltd (100% Atlantic) 28.06.21 Application None
Mankwadze (Winneba South) Green Metals Resources Ltd (100% Atlantic) 28.06.21 Application None
Mankwadzi Obotan Minerals Company Ltd (JV MODA Minerals Ltd) 15.03.18 Application None
Ivory Coast
PR695 Rubino Khaleesi Resources SARL (100% Atlantic) 20.10.16 Application None
PR694 Agboville Khaleesi Resources SARL (100% Atlantic) 20.10.16 Application None
* Renewal applications have been submitted to the various mining departments
of the relevant Governments and the Company has no reason to believe the
renewals will not be granted.
**Australasian Metals Ltd entered into an agreement on 31 May 2023 to acquire
the May Queen South Bauxite Project in Queensland (EL 16260 and EPM 16261).
This was already written down to zero value at 30 June 2022.
June Quarter Activities
Project Development
Definitive Feasibility Study for the Ewoyaa Lithium Project
On 29 June 2023, the Company reported a Definitive Feasibility Study(1)
("DFS") for the Ewoyaa Lithium Project in Ghana. The DFS indicates a low
capital intensity, confirming the Project's economic viability and exceptional
profitability potential.
Incorporating the Mineral Resource Estimate(1) ("MRE") of 35.3Mt @ 1.25 Li(2)O
and LOM concentrate pricing of US$1,587/t, FOB Ghana Port, the DFS details
robust financial outcomes for a 2.7Mtpa steady state operation, producing
3.6Mt of spodumene concentrate over a 12-year Life of Mine ("LOM"):
- Post-tax NPV(8) of US$1.5bn, with free cash flow of US$2.4bn from
LOM revenues of US$6.6bn, Internal Rate of Return ("IRR") of 105%;
- Average LOM EBITDA of US$316 million per annum, short payback of 19
months;
- C1 cash operating costs of US$377/t of concentrate Free-On-Board
("FOB") Ghana Port, after by-product credits from conventional open cut mining
operation; All in Sustaining Cost ("AISC") of US$610/t.
- Capital cost estimate of US$185 million.
The Project development involves open cut mining of several lithium-bearing
pegmatite deposits and the use of a simple flowsheet, comprising integrated
3-stage crushing facility, conventional Dense Media Separation ("DMS")
processing and supporting infrastructure to target the production of spodumene
concentrate and secondary product by Q2 2025 (refer Figure 2).
Figure 2 Site Overview Looking Northeast, Year 1 Operation
Initial processing of approximately 450,000t of ore will be carried out over
the first nine months, starting Q2 2025, in an early production DMS processing
plant fed from Ewoyaa South-2 pit, prior to processing through the main
2.7Mtpa processing facility from Q1 2026 for 11 years.
Over the life of mine ("LOM"), the Project is estimated to produce 3.58Mt of
6% (SC6) and 5.5% (SC5.5) grade (approx. 50:50 ratio) spodumene concentrate at
10mm top size crush, as well as 4.7Mt of secondary product with an average
grade of 1.16% Li(2)O.
Key Project metrics from the DFS are listed in Table 1 below, demonstrating
robust Project financial outcomes and metrics.
Table 1 Ewoyaa DFS Key Metrics (100% Project Basis(2))
Item Units DFS Result
Mineral Resource(3) Mt @ % 35.3Mt @ 1.25% Li(2)O
Measured Indicated Mineral Resource Mt @ % 3.5Mt @ 1.37% Li(2)O
Indicated Mineral Resource Mt @ % 24.5Mt @ 1.25% Li(2)O
Inferred Mineral Resource Mt @ % 7.4Mt @ 1.16% Li(2)O
Mine Life Years 12
Ore Reserves (Probable) Mt @ % 25.6Mt @ 1.22% Li(2)O
Total Material Movement LOM Mt 406
Mined Waste Mt 375.4
Mined Ore Mt 30.6
Strip Ratio W:O 12.3
Processed Ore LOM Mt 27.3
DMS Plant Feed Rate Mtpa 2.7
Li(2)O Head Grade (average) % 1.22
Average Whole of Ore Recovery SC6 % 62.1
Average Whole of Ore Recovery SC5.5 % 67.2
Secondary Product Mass Yield (% of ROM Feed) % 17.0
SC6 Produced LOM, t 1,792,222
SC5.5 Produced LOM, t 1,792,195
Secondary Product Produced LOM, t 4,733,264
Project Total Upfront Capital Cost US$M 185
SC6 Sell Price, LOM Average, FOB Ghana US$/t 1,695
SC5.5 Sell Price, LOM Average, FOB Ghana US$/t 1,478
Secondary Product Sell Price, LOM Average, FOB Ghana US$/t 186
Revenue (all products) US$M 6,566
Post-tax IRR % 105
C1 Cash Cost, after secondary product credits US$/t 377
All In Sustaining Cost (AISC) US$/t 610
Surplus Cashflow, Post Tax US$M 2,438
NPV(8) Post Tax US$M 1,498
Payback Months 19
NPAT, LOM US$M 2,284
(2) Whilst the asset is currently wholly owned by Atlantic Lithium Ltd,
Piedmont Lithium Inc. can earn up to half the asset through the funding
agreement, whilst the Government of Ghana has the right to a 10% free carry
once in production.
(3) Mr S. Searle of Ashmore Advisory Pty Ltd for Mineral Resources and Mr H.
Warries of Mining Focus Consultants Pty Ltd for Ore Reserves. For full
Competent Persons statements, refer to Table 3 and Table 5.
NOTE: Mineral Resources are inclusive of the Ore Reserves.
Mineral Resource
Drilling programmes undertaken at the Project site used reverse circulation
("RC") drill rigs and a portion using diamond core ("DD") drill rigs. Over
several drilling phases to date a total of 137,153m in 1,025 holes were
drilled (refer Table 2). Drilling at the deposit extends to a maximum drill
depth of 386m.
Earlier phase RC drilling was completed on a nominal 100m by 50m grid pattern,
with subsequent phases of RC and DD reducing the wide spacing to 80m by 40m
and down to 40m by 40m during infill drilling phases.
Table 2 Summary of Drilling Used for the Ewoyaa Mineral Resource
Estimate(1)
Hole Type In Database In Mineral Resource
Drill holes Drill holes I
n
t
e
r
s
e
c
t
i
o
n
Number Metres Number Metres Metres
RCH 11 1,100
RC 878 119,745 616 88,967 16,959
RCD 35 4,998 32 4,568 733
DD 101 11,310 93 10,159 4,987
Total 1,025 137,153 741 103,694 22,679
Mineral Resource Estimate
An updated JORC (2012) compliant Mineral Resource Estimate(1) ("MRE") was
prepared by Ashmore Advisory Pty Ltd using analytical data from a total of 741
drillholes totalling 103,694m (refer Table 2) and ordinary kriging methods for
resource estimation (refer Table 3). The MRE(1) is based on a 0.5% reporting
cut-off grade (constrained to above -190mRL), within a 0.4% Li(2)O wireframed
pegmatite body.
The MRE(1) was classified as Measured, Indicated and Inferred Mineral Resource
based on data quality, sample spacing, and lode continuity. The Measured
Mineral Resource was confined to fresh rock within areas drilled at 20m by 15m
along with robust continuity of geology and Li(2)O grade. The Indicated
Mineral Resource was defined within areas of close spaced drilling of less
than 40m by 40m, and where the continuity and predictability of the lode
positions was good. In addition, Indicated Mineral Resource was classified in
weathered rock overlying fresh Measured Mineral Resource. The Inferred Mineral
Resource was assigned to transitional material, areas where drill hole spacing
was greater than 40m by 40m, where small, isolated pods of mineralisation
occur outside the main mineralised zones, and to geologically complex zones.
Table 3 Ewoyaa MRE(1) by Deposit and JORC Classification (0.5% Li(2)O
Cut-off, above -190mRL)
Measured Mineral Resource
Deposit Tonnage Li(2)O Cont. Lithium Oxide
Mt % kt
Ewoyaa 3.5 1.37 48
Total 3.5 1.37 48
Indicated Mineral Resource
Deposit Tonnage Li2O Cont. Lithium Oxide
Mt % kt
Abonko 1.1 1.31 14
Anokyi 2.9 1.42 41
Ewoyaa 9.7 1.15 111
Ewoyaa Northeast 3.3 1.40 46
Grasscutter 5.8 1.19 69
Indicated Mineral Resource
Deposit Tonnage Li(2)O Cont. Lithium Oxide
Mt % kt
Kaampakrom 0.9 1.40 13
Okwesi 0.6 1.47 9
Sill 0.4 1.36 5
Total 24.5 1.25 307
Inferred Mineral Resource
Deposit Tonnage Li(2)O Cont. Lithium Oxide
Mt % kt
Abonko 0.7 1.20 9
Anokyi 0.5 1.16 5
Bypass 0.3 1.00 3
Ewoyaa 2.9 1.09 32
Ewoyaa Northeast 0.4 1.25 5
Grasscutter 1.7 1.25 22
Kaampakrom 0.5 1.11 6
Okwesi 0.3 1.35 4
Sill 0.1 1.51 1
Total 7.4 1.16 86
Total Mineral Resource
Deposit Tonnage Li(2)O Cont. Lithium Oxide
Mt % kt
Abonko 1.8 1.26 23
Anokyi 3.3 1.38 46
Bypass 0.3 1.00 3
Ewoyaa 16.0 1.19 190
Ewoyaa Northeast 3.6 1.38 50
Grasscutter 7.5 1.20 90
Kaampakrom 1.4 1.30 18
Okwesi 0.9 1.43 13
Sill 0.5 1.38 6
Total 35.3 1.25 440
COMPETENT PERSONS NOTE:
The Mineral Resource has been compiled under the supervision of Mr. Shaun
Searle who is a director of Ashmore Advisory Pty Ltd and a Registered Member
of the Australian Institute of Geoscientists. Mr. Searle has sufficient
experience that is relevant to the style of mineralisation and type of deposit
under consideration and to the activity that he has undertaken to qualify as a
Competent Person as defined in the JORC Code. Mr Searle consents to the
inclusion in the report of the matters based on his information in the form
and context in which it appears.
All Mineral Resources figures reported in the table above represent estimates
at January 2023. Mineral Resource estimates are not precise calculations,
being dependent on the interpretation of limited information on the location,
shape and continuity of the occurrence and on the available sampling results.
The totals contained in the above table have been rounded to reflect the
relative uncertainty of the estimate. Rounding may cause some computational
discrepancies.
Mineral Resources are reported in accordance with the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves (The
Joint Ore Reserves Committee Code - JORC 2012 Edition).
Ore Reserves
Ore Reserves were determined as part of the mine planning work that MFC
undertook for Atlantic Lithium as part of the Company's DFS(1). Mining will be
undertaken by conventional open pit methods of drill and blast, followed by
load and haul. Processing incorporates well-tested technology and utilises
conventional dense media separation techniques to produce SC6.0 and SC5.5
concentrate products, as well as a secondary product that comprises fines
material (-0.85+0.053mm).
The mine plan for the Project includes 1.7Mt at 1.19% Li(2)O or 6% of Inferred
Resources.
In order to determine whether to Project was still economically viable when
plant feed that was classified as Inferred was excluded from the mine plan
(and re-categorised from plant feed to waste), Atlantic Lithium developed a
cash flow model with all Inferred Resources excluded from plant feed and
re-assigned as waste.
CAUTIONARY STATEMENT:
There is a low level of geological confidence associated in inferred mineral
resources and there is no certainty that further exploration work will result
in the determination of indicated mineral resources or that the production
target itself will be realised. In order to determine whether the Project was
still economically viable when plant feed that was classified as Inferred was
excluded from the mine plan a cash flow model was developed with all Inferred
Resources excluded from plant feed and re-assigned as waste. This alternative
cash flow model indicated that the Project is still financially robust when
all Inferred Resources plant feed is treated as waste. Therefore, the Company
is satisfied that the use of Inferred Resources is not a determining factor in
the overall Project viability.
Based on the above, Probable Ore Reserves were declared for the Project and
shown in Table 4. All stated Probable Ore Reserves are completely included
within the quoted Mineral Resources and are quoted in dry tonnes. Probable Ore
Reserves were declared based on the Measured and Indicated Mineral Resources
only contained within the pit designs.
This alternative cash flow model indicated that the Project is still
financially robust when all Inferred Resources plant feed is treated as waste
with the All-In-Sustaining Cost (AISC) margin greater than 50%.
Based on the above, Ore Reserves(1) were declared for the Project.
Table 4 below provides a summary of the Ore Reserves as of 16 June 2023 that
were determined for the Project.
Table 4 Ore Reserves(1) as of 16 June 2023
Classification Ore Reserve
Tonnes (Mt) Li(2)O Grade (%)
Probable 25.6 1.22
COMPETENT PERSONS NOTE:
All stated Ore Reserves are completely included within the quoted Mineral
Resources and are quoted in dry tonnes. The reported Ore Reserves have been
compiled by Mr Harry Warries. Mr Warries is a Fellow of the Australasian
Institute of Mining and Metallurgy and an employee of Mining Focus Consultants
Pty Ltd. He has sufficient experience, relevant to the style of mineralisation
and type of deposit under consideration and to the activity he is undertaking,
to qualify as a Competent Person as defined in the 'Australasian Code for
Reporting of Mineral Resources and Ore Reserves' of December 2012 ("JORC
Code") as prepared by the Joint Ore Reserves Committee of the Australasian
Institute of Mining and Metallurgy, the Australian Institute of Geoscientists
and the Minerals Council of Australia. Mr Warries gives Atlantic Lithium
Limited consent to use this reserve estimate in reports.
The Ore Reserves(1) as determined for the Project were based on the Modifying
Factors as summarised in Table 5. All currencies are denominated in United
States of America dollars, unless specifically stated otherwise.
Table 5 Summary of Modifying Factors for Ore Reserve Determination
Item Unit Value
P1 Pegmatite P2 Pegmatite
Plant throughput Mtpa 2.7
Spodumene price (SC6.0 and SC5.5 product) $/t 1,587
Concentrate grade % 6.0
- SC6.0 Product (50% of total production)
5.5
- SC5.5 Product (50% of total production)
Secondary product price $/t 186
Secondary product recovery (of total crusher feed) % 17
Royalty % 6.0
Processing recovery SC6.0 62.1 NA
SC5.5
67.2
14.9
Processing Cost $/t processed 7.77
General and Administration (Incl. Marketing and insurance) $/t processed 6.18
Lithium Concentrate Transport Costs $/t conc. 29.81
SC6.0 and SC5.5
32.65
Secondary product
Average Mining Cost (Contract mining) $/t mined 3.82
Mining recovery % 95
Mining dilution % 5
Overall Pit Wall Slope Angle Degree Ranging from 30.0(o) (Oxide) to 50.4(o) (Fresh)
(inclusive of a ramp system)
Capital expenditure $M 185.2
Sustaining capital $M 112.2
Discount rate % 8
Modular DMS
The Company has identified the opportunity to conduct early processing
operations using a Modular DMS processing plant and contract crushing
services. The early production will precede the primary processing plant by
nine months.
The contract crushing provider will crush ore to a top size of 10mm. This DMS
feed material will be screened at 3mm to produce DMS feed (-10mm+3mm) and a
fines stream (-3mm). The Modular DMS unit will produce a spodumene
concentrate, along with the deslimed fines as a secondary product for sale.
Cashflow from the Modular DMS unit, estimated as approx. US$170 million in
Year 1, will reduce peak funding requirement for the mine build and provide a
valuable opportunity to train national staff and engineer out any mining,
materials handling or logistics bottlenecks ahead of large-scale operations
commencing. The capital expenditure for the Modular DMS unit, equating to
US$15 million, comprising the unit, mobilisation of a mobile crushing
contractor, manufacturing and contingency, will be paid back prior to the full
completion of the main plant build.
Figure 3 EXAMPLE MODULAR DMS UNIT
NOTE: The Company discloses that the unit photographed above is not currently
owned by the Company or used at the Project, nor is there any certainty that
it will be owned or used by the Company in the future.
Mining Lease Update
The Company currently awaits the approval of the consolidation of the
Mankessim and Mankessim South licences, which covered the proposed mine and
processing plant site, into the single Mankessim licence. This was undertaken
following guidance from Ghana's Minerals Commission Technical Committee in
order to facilitate a smoother approvals process for the Mining Lease
application and to establish a simplified operational structure.
As part of this process, the Company took the opportunity to implement
optimisations based on the finalised plant flowsheet into its Mining Lease
application. The revised Mining Lease application now also includes the
addition of deposits that were sitting outside of the mine plan in the initial
application submitted.
Upon approval of the mining licence consolidation, the Company will submit the
revised application for a Mining Lease for the Project.
The Company expects no further major amendments to the application to be
requested by the Technical Committee and has no reason to believe that the
Mining Lease will not be granted for the Project. The Company hopes that the
Mining Lease may be granted in the current quarter.
Funding
Of the total US$185 million total capex indicated in the DFS(1), as detailed
in the Company's agreement dated 1 July 2021, Piedmont is required to provide
sole funding of the first US$70 million of capex, with costs split 50:50
between the Company and Piedmont thereafter.
Under the agreement, Piedmont will receive 50% of the spodumene concentrate
produced at Ewoyaa at market prices. 50% of the offtake remains available.
Considerable interest has been received by the Company to date. As one of few
near-term spodumene concentrate producers with offtake unaccounted for, the
Board believes that Atlantic Lithium would be able to secure a pre-payment
offtake deal as an alternative funding mechanism which could be used to fund
the remaining capex required by the Company. The Company is actively
evaluating this option among other potential funding alternatives which
maximise shareholder value and minimise dilution.
Flotation Circuit Scoping Study
Post-period end, the Company appointed international multi-disciplinary
engineering, project delivery and operations management group DRA Global
Limited (ASX: DRA, JSE: DRA, "DRA") to conduct a Scoping Study for the
inclusion of a flotation circuit at Ewoyaa.
The Scoping Study, which forms part of Stage 2 of the Project's development,
will comprise:
- an evaluation of the technical and commercial viability of the use
of flotation to process fines and middlings as a potential additional
downstream circuit to the planned Ewoyaa DMS processing plant;
- assessing the use of the 4.7Mt of 1.2% Li(2)O fines material
currently intended to be sold as a low-grade Li(2)O secondary product (refer
Ewoyaa Definitive Feasibility Study(1), announced on 29 June 2023) as
potential feedstock for the flotation circuit.
Preliminary testwork and calculations indicate encouraging flotation stage
recovery and the achievement of >5% Li(2)O concentrate grades. The
higher-value concentrate produced by flotation is intended to replace the
current lower-grade secondary product. The Company believes that this would
enhance the Project's financial outcomes and de-risk the Project in the event
that the low-grade lithium-bearing products market is adversely affected.
Under the terms of the agreement, DRA will deliver process design criteria, a
processing flowsheet, capital and operating cost estimates for the additional
flotation circuit.
The Study is currently underway, with an outcome expected in Q4 2023.
Exploration
During the period, the Company advanced the 2023 exploration and resource
drilling programmes at Ewoyaa (refer announcements of 20 March 2023 and 19
April 2023).
Approximately 3,000m of infill drilling was planned at the Ewoyaa South-2
deposit with a further 7,000m of resource extensional drilling planned at the
Ewoyaa Main, Ewoyaa North-east and Kaampakrom deposits. A further 6,500m of
exploration drilling and 2,000m of diamond core ("DD") drilling is planned as
part of the 2023 field season.
Infill Drilling
Infill reverse circulation ("RC") drilling, designed to convert Inferred
resources to higher confidence Indicated resources at the Ewoyaa South-2
deposit for future mine sequencing optionality, was completed during the
period, with initial assay results received for 2,208m of drilling (refer
announcement of 20 June 2023).
Multiple high-grade drill intersections are reported for infill drilling
results at the Ewoyaa South-2 deposit within the current MRE(1) (refer Table
6, Table 7 and Table 8).
Infill drilling results confirm mineralisation continuity within the Ewoyaa
South-2 deposit, part of the MRE(1), where multiple drilling intersections are
reported over significant apparent widths and relatively shallow depths (refer
Figure 4, Figure 5 and Figure 6).
Drilling is planned to intersect mineralised pegmatite dykes perpendicular to
strike and dip to approximate true width. This is not always achieved due to
the variable nature of pegmatites or challenging drill access, with some drill
intersections drilled down-dip as apparent widths. Accordingly, estimated true
widths are included in the intersections table in Table 7.
Sample preparation was completed by Intertek Ghana and assay by Intertek Perth
with all reported results passing QA/QC protocols, providing confidence in
reported results.
Table 6 Drill intersection highlights at greater than 10 Li x m,
reported at a 0.4% Li(2)O cut-off and maximum of 4m of internal dilution.
Hole_ID From_m To_m Interval_m Li(2)O% Intersection Comment Hole Purpose metal content Li x m
GRC0892 45 102 57 1.17 GRC0892: 57m at 1.17% Li2O from 45m Resource Drilling 66.7
GRC0899 3 57 54 1.14 GRC0899: 54m at 1.14% Li2O from 3m Resource Drilling 61.6
GRC0900 73 114 41 1.16 GRC0900: 41m at 1.16% Li2O from 73m Resource Drilling 47.6
GRC0909A 78 111 33 1.12 GRC0909A: 33m at 1.12% Li2O from 78m Resource Drilling 37.0
GRC0896 80 98 18 1.16 GRC0896: 18m at 1.16% Li2O from 80m Resource Drilling 20.9
GRC0908 47 66 19 0.922 GRC0908: 19m at 0.93% Li2O from 47m Resource Drilling 17.5
GRC0906 38 49 11 1.5 GRC0906: 11m at 1.5% Li2O from 38m Resource Drilling 16.5
GRC0906 54 71 17 0.91 GRC0906: 17m at 0.91% Li2O from 54m Resource Drilling 15.5
GRC0908 33 43 10 1.53 GRC0908: 10m at 1.53% Li2O from 33m Resource Drilling 15.3
GRC0908 18 31 13 1.03 GRC0908: 13m at 1.03% Li2O from 18m Resource Drilling 13.4
GRC0897 68 83 15 0.89 GRC0897: 15m at 0.89% Li2O from 68m Resource Drilling 13.4
GRC0907 6 18 12 1.07 GRC0907: 12m at 1.07% Li2O from 6m weathered pegmatite Resource Drilling 12.8
GRC0903 57 67 10 1.27 GRC0903: 10m at 1.27% Li2O from 57m Resource Drilling 12.7
GRC0898 15 25 10 1.26 GRC0898: 10m at 1.26% Li2O from 15m Resource Drilling 12.6
GRC0897 51 60 9 1.36 GRC0897: 9m at 1.36% Li2O from 51m Resource Drilling 12.2
NOTE: Metal content is based on intercept rather than estimated true width
Figure 4 LOCATION OF REPORTED ASSAY RESULTS WITH HIGHLIGHT DRILL
INTERSECTIONS.
Figure 5 Cross-section A-A' showing assay results received for
GRC0897, GRC0898, GRC0899 and GRC0900 at the Ewoyaa South-2 deposit.
Figure 6 Cross-section B-B' assay results received for GRC0892 at the
Ewoyaa South-2 deposit.
Table 7 New drill intersections reported in hole ID order, reported
at a 0.4% Li(2)O cut-off and maximum 4m of internal dilution.
Hole_ID From_m To_m Interval_m Estimated true width_m Li(2)O% Intersection Comment Hole Purpose metal content Li x m
GRC0889 7 11 no significant intersections weathered pegmatite Water Monitoring
GRC0890 6 8 2 no significant intersections weathered pegmatite Resource Drilling
GRC0891 13 18 5 no significant intersections weathered pegmatite Resource Drilling
GRC0892 45 102 57 11 1.17 GRC0892: 57m at 1.17% Li2O from 45m Resource Drilling 66.7
GRC0893 No pegmatite intersected No pegmatite intersected Resource Drilling
GRC0894 2 8 6 3 no significant intersections weathered pegmatite Resource Drilling
GRC0894 19 24 5 2.5 no significant intersections weathered pegmatite Resource Drilling
GRC0895 80 84 4 4 1.05 GRC0895: 4m at 1.05% Li2O from 80m Resource Drilling 4.2
GRC0896 80 98 18 11 1.16 GRC0896: 18m at 1.16% Li2O from 80m Resource Drilling 20.9
GRC0897 51 60 9 5 1.36 GRC0897: 9m at 1.36% Li2O from 51m Resource Drilling 12.2
GRC0897 68 83 15 10 0.89 GRC0897: 15m at 0.89% Li2O from 68m Resource Drilling 13.4
GRC0898 7 10 3 1 0.96 GRC0898: 3m at 0.96% Li2O from 7m weathered pegmatite Resource Drilling 2.9
GRC0898 15 25 10 5 1.26 GRC0898: 10m at 1.26% Li2O from 15m Resource Drilling 12.6
GRC0899 3 57 54 11 1.14 GRC0899: 54m at 1.14% Li2O from 3m Resource Drilling 61.6
GRC0899 109 111 2 1 1.07 GRC0899: 2m at 1.07% Li2O from 109m Resource Drilling 2.1
GRC0899 116 117 1 0.5 0.46 GRC0899: 1m at 0.46% Li2O from 116m Resource Drilling 0.5
GRC0900 73 114 41 11 1.16 GRC0900: 41m at 1.16% Li2O from 73m Resource Drilling 47.6
GRC0901 3 9 6 4 0.77 GRC0901: 6m at 0.77% Li2O from 3m weathered pegmatite Resource Drilling 4.6
GRC0902 13 17 4 3 0.47 GRC0902: 4m at 0.47% Li2O from 13m weathered pegmatite Resource Drilling 1.9
GRC0903 9 17 8 5 0.83 GRC0903: 8m at 0.83% Li2O from 9m Resource Drilling 6.6
GRC0903 57 67 10 5 1.27 GRC0903: 10m at 1.27% Li2O from 57m Resource Drilling 12.7
GRC0904 97 101 4 2.5 0.93 GRC0904: 4m at 0.93% Li2O from 97m Resource Drilling 3.7
GRC0905 17 18 1 1 1.09 GRC0905: 1m at 1.09% Li2O from 17m Resource Drilling 1.1
GRC0905 24 30 6 4 1.55 GRC0905: 6m at 1.55% Li2O from 24m Resource Drilling 9.3
GRC0905 50 52 2 1.5 0.65 GRC0905: 2m at 0.65% Li2O from 50m Resource Drilling 1.3
GRC0906 15 20 5 3 0.96 GRC0906: 5m at 0.96% Li2O from 15m Resource Drilling 4.8
GRC0906 38 49 11 6 1.5 GRC0906: 11m at 1.5% Li2O from 38m Resource Drilling 16.5
GRC0906 54 71 17 8 0.91 GRC0906: 17m at 0.91% Li2O from 54m Resource Drilling 15.5
GRC0907 6 18 12 7 1.07 GRC0907: 12m at 1.07% Li2O from 6m weathered pegmatite Resource Drilling 12.8
GRC0908 18 31 13 8 1.03 GRC0908: 13m at 1.03% Li2O from 18m Resource Drilling 13.4
GRC0908 33 43 10 6 1.53 GRC0908: 10m at 1.53% Li2O from 33m Resource Drilling 15.3
GRC0908 47 66 19 10 0.922 GRC0908: 19m at 0.93% Li2O from 47m Resource Drilling 17.5
GRC0909A 44 48 4 2 0.77 GRC0909A: 4m at 0.77% Li2O from 44m Resource Drilling 3.1
GRC0909A 78 111 33 12 1.12 GRC0909A: 33m at 1.12% Li2O from 78m Resource Drilling 37
GRC0909A 120 122 2 1 0.76 GRC0909A: 2m at 0.76% Li2O from 120m Resource Drilling 1.5
NOTE: Metal content is based on intercept rather than estimated true width
Table 8 Newly reported drill hole collar locations.
Hole_ID Easting_m Northing_m Elevation_m Dip Hole Azimuth end of hole depth_m Hole Purpose
GRC0889 714054 577704 26.0 -90 0 100 Water Monitoring
GRC0890 715399 578416 51.9 -50 305 50 Resource Drilling
GRC0891 715429 578390 57.7 -50 305 80 Resource Drilling
GRC0892 715462 578366 60.0 -50 305 124 Resource Drilling
GRC0893 715480 578358 57.1 -50 305 174 Resource Drilling
GRC0894 715420 578430 53.8 -50 305 50 Resource Drilling
GRC0895 715449 578412 56.6 -50 305 106 Resource Drilling
GRC0896 715490 578375 58.3 -50 305 157 Resource Drilling
GRC0897 715470 578427 56.0 -50 305 109 Resource Drilling
GRC0898 715448 578443 53.1 -50 305 50 Resource Drilling
GRC0899 715492 578409 59.6 -50 305 150 Resource Drilling
GRC0900 715509 578399 59.5 -50 305 170 Resource Drilling
GRC0901 715458 578462 45.8 -50 305 50 Resource Drilling
GRC0902 715477 578480 45.8 -50 305 50 Resource Drilling
GRC0903 715513 578456 45.7 -50 305 120 Resource Drilling
GRC0904 715541 578429 45.4 -50 305 139 Resource Drilling
GRC0905 715517 578485 41.2 -50 305 110 Resource Drilling
GRC0906 715547 578458 39.6 -50 305 140 Resource Drilling
GRC0907 715514 578509 39.4 -50 305 50 Resource Drilling
GRC0908 715549 578490 35.2 -50 305 86 Resource Drilling
GRC0909A 715568 578474 38.3 -50 305 143 Resource Drilling
Soil geochemistry survey
The planned 100m x 100m grid soil geochemistry survey over the Cape Coast
license has now been completed. In-house analysis of the samples for
multi-element geochemistry using portable X-Ray fluorescence ('pXRF') and
lithium using portable Laser induced breakdown spectroscopy ('LIBS') analysers
is currently underway. Anomalous Li-Rb-Sn targets from the soil geochemistry
survey with coincident geophysical anomalies will be prioritised for field
mapping and pending results, auger drilling and RC drill testing.
Auger Drilling
The Company's approx. 20,000m auger drilling programme is ongoing, with
analysis underway. Drilling is testing multiple coincident geochemical and
geophysical targets within the Project corridor and broader 560km(2) Cape
Coast Lithium portfolio; inclusive of any targets defined within the Cape
Coast soil geochemistry survey. Auger drilling is designed to test for
pegmatites below vegetation and soil cover in the absence of outcrop and, if
pegmatite is intersected, step out drilling over a grid pattern will follow to
define the sub-surface pegmatite footprint ahead of RC drill testing at depth
for grade potential.
Dependent on the results of the regional auger drilling and passive seismic
survey, the Company has allowed for 6,500m of exploration RC drilling to test
the targets defined later in the year.
Corporate
Appointments
On 16 May 2023, the Company announced the appointments of Keith Muller as
Chief Executive Officer ("CEO") and Len Kolff as Head of Business Development
& Chief Geologist, respectively.
Mr Muller joined Atlantic Lithium in November 2022, initially as Chief
Operating Officer ("COO"), to drive the Company's transition from explorer
through the development phase towards first production and the delivery of a
successful operating spodumene concentrate mine.
Mr Muller brings considerable operational and leadership experience and a
background in hard rock lithium mining and processing, specifically in DMS
spodumene processing. His involvement at the Mt Cattlin lithium mine in
Western Australia, which bears similarities with Ewoyaa, during his time at
Allkem provides the Company with invaluable learnings and experience of
operating a successful lithium mine.
As CEO, he assumes the position held by Len Kolff on an interim basis since
March 2022 following the passing of Atlantic Lithium's founder and former
Chief Executive Officer, Vincent Mascolo. The Board would like to take the
opportunity to thank Mr Kolff for his efforts during this challenging period
and delivering on significant milestones during this phase of the Company's
growth.
In line with Mr Muller's appointment, Mr Kolff takes up the position of Head
of Business Development & Chief Geologist, where he will be responsible
for the ongoing exploration of the Company's portfolio and identifying and
developing growth opportunities for the Company.
Changes to the Board
The Company confirmed the appointments of CEO Keith Muller and Patrick Brindle
to the Atlantic Lithium Board of Directors.
Mr Brindle currently serves as Executive Vice President & Chief Operating
Officer at Piedmont Lithium Inc. (NASDAQ: PLL, ASX: PLL) and joins the Board
to take up the Non-Executive Director position available to Piedmont. He
brings more than 20 years' experience in senior management and engineering
roles and has completed EPC projects around the world.
Mr Muller and Mr Brindle bring global engineering and mine management
experience and their appointments further align the capabilities of the Board
with the Company's ambitions of achieving near-term spodumene concentrate
production at Ewoyaa.
Also during the period, Stuart Crow made the decision to step down from the
Board to focus on his other business interests. For over a decade, Mr Crow's
insights contributed greatly to the growth and development of the Company to
become a significant near-term lithium producer. The Board would like to take
the opportunity to express its sincere gratitude to Mr Crow for all of his
efforts for the Company and wish him success in his other endeavours.
International Lithium Association Membership
In April 2023, the Company became an Associate Member of the International
Lithium Association ("ILiA"), the global trade association for the lithium
industry.
The association aims to be a voice and global authority for the industry and
support the sector's efforts to supply high-quality lithium sustainably and
responsibly.
Atlantic Lithium's ILiA membership reflects the Company's ambition of bringing
Ewoyaa to production to play an important role in the global decarbonisation
thematic, while delivering long-term benefits to all stakeholders.
DTC Eligibility for OTCQX Electronic Trading
The Company commenced trading on the OTCQX in November 2021 with the aim of
providing more efficient access to prospective US investors, where there is
significant sophisticated investor interest in the mining sector.
In May 2023, the Company's common shares ("Common Shares") listed on the
OTCQX® Best Market ("OTCQX") in the United States were granted eligibility
for electronic clearing and settlement through the Depository Trust Company
("DTC").
DTC eligibility is expected to simplify the process of trading and
transferring the Common Shares and enhance the liquidity of the Common Shares
in the United States because of the accelerated settlement period and the
expected reduction in costs for investors and brokers.
The Company has been proactive in its marketing in the US and Canada and has
seen an increase in North American institutional investor interest as a
result.
Atlantic Lithium shares trade on the OTCQX under the ticker "ALLIF".
Appointment of Head of Operational Readiness
Post-period end, the Company appointed Aaron Maurer as Head of Operational
Readiness. Prior to joining Atlantic Lithium, Mr Maurer held several
engineering, production, operational, and senior executive roles, including as
Executive General Manager - Operations at Minerals Resources Limited, where he
oversaw the Mt Marion Lithium mine and three iron ore mines in Western
Australia. He also previously held the positions of Managing Director and CEO
of PVW Resources NL and General Manager (Site Senior Executive) at Peabody
Energy Australia.
Mr Maurer brings to the Company significant expertise spanning the development
and implementation of safety and cost-saving initiatives, change management,
strategic planning, business development, and employee development.
Mr Maurer's involvement in the operations at Mt Marion significantly
strengthens the capabilities and the expertise of the senior management team
as the Company advances the Project towards first spodumene construction
production.
Conferences Attended
The Company attended the following conferences during the period:
- Future Facing Commodities 2023, Singapore (4-6 April)
- Canaccord Genuity's Global Metals & Mining Conference, Palm
Desert (10-12 May)
- Wilsons Rapid Insights Conference, Sydney (18 May)
- Ghana Mining and Energy Summit, Accra (6-9 June)
- Fastmarkets Lithium Supply and Battery Raw Materials 2023, Las Vegas
(20-22 June)
- Proactive One2One Investor Forum, London (28 June)
The Company also hosted a webinar on the Investor Meet Company platform
following the release of the DFS. Investors can sign up to Investor Meet
Company to watch the Company's previous webinars and be notified of upcoming
events via the following link:
https://www.investormeetcompany.com/atlantic-lithium-limited/register-investor
(https://www.investormeetcompany.com/atlantic-lithium-limited/register-investor)
.
Sustainability
In May, the Company was awarded Exploration Company of the Year (Mining) at
the 6(th) edition of the Ghana-West Africa Business Excellence Awards 2023,
which recognises individuals and companies which have played a significant
role in development of the business sector in Ghana.
Earlier in the month, honouring workers and their contribution to the
country's development, Atlantic Lithium was a proud headline sponsor of the
celebratory events for the community at Saltpond Victoria Park in the
Mfantseman municipality which marked Ghana's May Day celebrations for the
Central Region.
Share Capital Changes - Ordinary Shares, Options and Performance Rights
On 6 April 2023, 3,500,000 ordinary shares of no par value each in the Company
were issued at a price of 30 pence per share as a result of the exercise of
unlisted ESOP options (granted on 9 April 2021). Amanda Harsas, Finance
Director & Company Secretary, acquired 2,500,000 new Ordinary Shares at a
price of 30p each as a result of the exercise of ESOP options, for a total
consideration of £750,000.
On 16 May 2023, pursuant to his appointment as Chief Executive Officer, Keith
Muller was granted 2,000,000 options over Ordinary Shares exercisable at a
price of 50p with an expiry 2 years from date of issue.
A summary of movement and balances of equity securities between 1 April 2023
and date of this report is as follows:
Ordinary Shares Unquoted Options Unquoted performance rights
On issue at start of Quarter 605,741,660 61,500,000 2,700,000
Shares issued - Exercise of ESOP options (6 April 2023) 3,500,000 (3,500,000)
Options issued (16 May 2023) 2,000,000
Total Securities on issue at date of this report 609,241,660 60,000,000 2,700,000
Compliance
During the quarter, the Company spent A$4.8 million on its exploration and
feasibility activities for its Ewoyaa Lithium Project in Ghana, including
A$1.4 million on the Front-End Engineering Design and Transmission Line. In
accordance with the agreement announced on 1 July 2021, exploration and
feasibility activities are 50% funded by Piedmont, with Piedmont sole funding
the first US$70 million towards the total US$185 million of capex forecasted.
Funding is shared equally thereafter.
Appendix 5B expenditure disclosure
As at end 30 June 2023, the Company had cash resources of A$15.3 million and
no debt. Exploration and evaluation cash expenditure on the Project during the
quarter was A$4.8 million. Piedmont Lithium Inc. funded A$5.7 million in the
quarter.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
ATLANTIC LITHIUM LIMITED
ABN Quarter ended ("current quarter")
17 127 215 132 30 June 2023
Consolidated statement of cash flows Current quarter Year to date (12 months)
$A'000
$A'000
1. Cash flows from operating activities - -
1.1 Receipts from customers
1.2 Payments for - -
(a) exploration & evaluation
(b) development - -
(c) production - -
(d) staff costs (295) (1,362)
(e) administration and corporate costs (1,197) (5,620)
1.3 Dividends received (see note 3) - -
1.4 Interest received - -
1.5 Interest and other costs of finance paid - -
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - -
1.9 Net cash from / (used in) operating activities (1,492) (6,982)
2. Cash flows from investing activities - -
2.1 Payments to acquire or for:
(a) entities
(b) tenements - -
(c) property, plant and equipment (58) (270)
(d) exploration & evaluation (4,764) (19,770)
(e) investments - -
(f) other non-current assets - -
2.2 Proceeds from the disposal of: -
(a) entities
(b) tenements -
(c) property, plant and equipment -
(d) investments -
(e) other non-current assets -
2.3 Cash flows from loans to other entities -
2.4 Dividends received (see note 3) -
2.5 Other - Piedmont Contributions from farm-in arrangement 5,687 15,586
2.6 Net cash from / (used in) investing activities 865 (4,454)
3. Cash flows from financing activities -
3.1 Proceeds from issues of equity securities (excluding convertible debt
securities)
3.2 Proceeds from issue of convertible debt securities -
3.3 Proceeds from exercise of options - 4,626
3.4 Transaction costs related to issues of equity securities or convertible debt - (1,744)
securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings - -
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other (provide details if material) - -
3.10 Net cash from / (used in) financing activities - 2,882
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 15,982 23,882
4.2 Net cash from / (used in) operating activities (item 1.9 above) (1,492) (6,982)
4.3 Net cash from / (used in) investing activities (item 2.6 above) 865 (4,454)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - 2,882
4.5 Effect of movement in exchange rates on cash held (3) 24
4.6 Cash and cash equivalents at end of period 15,352 15,352
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash
$A'000
$A'000
flows) to the related items in the accounts
5.1 Bank balances 15,333 15,982
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other - Petty Cash 19 -
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 15,352 19,051
6. Payments to related parties of the entity and their associates Current quarter
$A'000
6.1 Aggregate amount of payments to related parties and their associates included -
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
NOTE: if any amounts are shown in items 6.1 or 6.2, your quarterly activity
report must include a description of, and an explanation for, such payments.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
NOTE: the term "facility' includes all forms of financing arrangements
$A'000
$A'000
available to the entity.
Add notes as necessary for an understanding of the sources of finance
available to the entity.
7.1 Loan facilities - -
7.2 Credit standby arrangements - -
7.3 Other - -
7.4 Total financing facilities - -
7.5 Unused financing facilities available at quarter end -
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
8. Estimated cash available for future operating activities $A'000
8.1 Net cash from / (used in) operating activities (item 1.9) (1,492)
8.2 (Payments for exploration & evaluation classified as investing activities) (4,764)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (6,256)
8.4 Cash and cash equivalents at quarter end (item 4.6) 15,352
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 15,352
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.5
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8.8 If item 8.7 is less than 2 quarters, please provide answers to the following
questions:
8.8.1 Does the entity expect that it will continue to have the current
level of net operating cash flows for the time being and, if not, why not?
Answer: N/A
8.8.2 Has the entity taken any steps, or does it propose to take any
steps, to raise further cash to fund its operations and, if so, what are those
steps and how likely does it believe that they will be successful?
Answer: N/A
8.8.3 Does the entity expect to be able to continue its operations and
to meet its business objectives and, if so, on what basis?
Answer: N/A
NOTE: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2
and 8.8.3 above must be answered.
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date: 31 July 2023
Authorised by: Authorised by the Board of Atlantic Lithium Limited
Notes
1. This quarterly cash flow report and the accompanying
activity report provide a basis for informing the market about the entity's
activities for the past quarter, how they have been financed and the effect
this has had on its cash position. An entity that wishes to disclose
additional information over and above the minimum required under the Listing
Rules is encouraged to do so.
2. If this quarterly cash flow report has been prepared
in accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash
flows from operating activities or cash flows from investing activities,
depending on the accounting policy of the entity.
4. If this report has been authorised for release to the
market by your board of directors, you can insert here: "By the board". If it
has been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - eg Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the
market by your board of directors and you wish to hold yourself out as
complying with recommendation 4.2 of the ASX Corporate Governance Council's
Corporate Governance Principles and Recommendations, the board should have
received a declaration from its CEO and CFO that, in their opinion, the
financial records of the entity have been properly maintained, that this
report complies with the appropriate accounting standards and gives a true and
fair view of the cash flows of the entity, and that their opinion has been
formed on the basis of a sound system of risk management and internal control
which is operating effectively.
(1) Ore Reserves, Mineral Resources and Production Targets
The information in this announcement that relates to Ore Reserves, Mineral
Resources and Production Targets complies with the 2012 Edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves (JORC Code). The information in this announcement relating to Ore
Reserves of 25.6Mt @ 1.22% Li(2)O and Production Targets is extracted from the
Ewoyaa Lithium Project Definitive Feasibility Study, announced by the Company
on 29 June 2023, and information in this announcement relating to the Mineral
Resource Estimate ("MRE") of 35.3 Mt @ 1.25% Li(2)O for Ewoyaa is extracted
from the Company's announcement dated 1 February 2023, both of which are
available at atlanticlithium.com.au (http://atlanticlithium.com.au) . The MRE
includes a total of 3.5 Mt @ 1.37% Li(2)O in the Measured category, 24.5 Mt @
1.25% Li(2)O in the Indicated category and 7.4 Mt @ 1.16% Li(2)O in the
Inferred category. The Company confirms that all material assumptions and
technical parameters underpinning the Mineral Resource Estimate and the
Definitive Feasibility Study continue to apply and have not materially
changed, and it is not aware of any new information or data that materially
affects the information included in this announcement or the announcements
dated 1 February 2023 or 29 June 2023.
FOR ANY FURTHER INFORMATION, PLEASE CONTACT:
ATLANTIC LITHIUM LIMITED
Keith Muller (Chief Executive Officer)
Neil Herbert (Executive Chairman)
Amanda Harsas (Finance Director and Company Secretary)
www.atlanticlithium.com.au
IR@atlanticlithium.com.au
Tel: +61 2 8072 0640
SP Angel Corporate Finance LLP Yellow Jersey PR Limited Canaccord Genuity Limited
Nominated Adviser Charles Goodwin Joint Company Broker
Jeff Keating Bessie Elliot Raj Khatri / James Asensio
atlantic@yellowjerseypr.com
Charlie Bouverat
Harry Rees
Tel: +44 (0)20 3004 9512
Tel: +44 (0)20 3470 0470
Tel: +44 (0) 20 7523 4500
NOTES TO EDITORS:
About Atlantic Lithium
www.atlanticlithium.com.au (http://www.atlanticlithium.com.au/)
Atlantic Lithium is an AIM and ASX-listed lithium company advancing a
portfolio of lithium projects in Ghana and Côte d'Ivoire through to
production.
The Company's flagship project, the Ewoyaa Project in Ghana, is a significant
lithium spodumene pegmatite discovery on track to become Ghana's first
lithium-producing mine. The Company signed a funding agreement with Piedmont
Lithium Inc. towards the development of the Ewoyaa Project. Atlantic Lithium
is currently advancing the Ewoyaa Project through feasibility studies and
intends to be producing a spodumene concentrate via simple gravity only
process flowsheet.
Atlantic Lithium holds 560km(2) and 774km(2) of tenure across Ghana and Côte
d'Ivoire respectively, comprising significantly under-explored, highly
prospective licences.
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