REG - Atlantic Lithium Ltd - Quarterly Activities and Cash Flow Report
31/10/2023 07:15
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RNS Number : 7850R Atlantic Lithium Limited 31 October 2023
31 October 2023
Quarterly Activities and Cash Flow Report
for the quarter ended 30 September 2023
Historic Mining Lease granted post-period end, following major funding commitments from Project partners
Ewoyaa Lithium Project considerably de-risked towards commercial production
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 September 2023.
Highlights from the Reporting Period:
- Commitment from partner Piedmont Lithium to sole fund the first US$70m,
and 50% of any additional costs thereafter, of the total US$185m development
expenditure indicated in the Definitive Feasibility Study ("DFS") for the
Company's flagship Ewoyaa Lithium Project ("Ewoyaa" or the "Project") in
Ghana, comprising the proposed Ewoyaa Lithium Mine and Processing Plant.
- Planned investment of a total US$32.9m (A$51.4m / £26.3m) by the
Minerals Income Investment Fund of Ghana ("MIIF") in the Company and its
Ghanaian subsidiaries to expedite the development of the Project.
- Commenced competitive offtake partnering process to secure Project
funding for a portion of the remaining 50% available feedstock from Ewoyaa.
- Memorandum of Understanding ("MoU") signed with The University of
Mines and Technology, Tarkwa ("UMaT") to assess the viability of producing
feldspar feedstock at the Project.
- Appointment of DRA Global Limited ("DRA") to conduct a Scoping Study
for the inclusion of an additional downstream flotation circuit to the
proposed Dense Media Separation ("DMS") processing plant.
- Advancement of 2023 resource and exploration drilling programme at
Ewoyaa:
· Further assay results received for a total 11,594m of infill and
exploration reverse circulation ("RC") and groundwater monitoring drilling
completed at Ewoyaa, part of the ongoing planned 18,500m programme.
· Auger drilling ongoing at Saltpond, with two rigs active, part of
the 20,000m 2023 programme.
· Soil sample analysis underway following completion of geochemistry
survey over the Cape Coast licence.
- Cash on hand at end of quarter was A$10.6m.
Post-period end
- Mining Lease granted for the Ewoyaa Lithium Project, representing a
major de-risking milestone for the Project.
· Agreed terms maintain Ewoyaa's position as one of the lowest capital
and operating cost hard rock lithium projects globally.
· Project economics indicate strong commercial viability and
exceptional profitability potential for a 2.7Mtpa steady state operation,
producing a total of 3.6Mt of spodumene concentrate (approximately 350,000tpa)
over a 12-year mine life(1):
- Payback period of main processing plant of 9.5 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$675/t;
- Development cost estimate of US$185m;
- Post-tax NPV(8) of US$1.3bn, with free cash flow of US$2.1bn from
Life of Mine ("LOM") revenues of US$6.6bn.
- Environmental Protection Agency authorisation to commence the diversion
of the transmission lines crossing the Mankessim licence, moving the Project a
step closer to shovel readiness.
Commenting on the Company's latest progress, Neil Herbert, Executive Chairman
of Atlantic Lithium, said:
"The news of the Mining Lease for the Ewoyaa Lithium Project follows yet
another remarkable period of progress for Atlantic Lithium. The Mining Lease
represents the Government's belief in the Company as its partner of choice in
its long-term lithium production objectives and sets Ewoyaa on a path to
become one of the next major hard rock spodumene mines.
"During the quarter, we announced two major funding commitments which
underscore the Project's commercial viability and significantly de-risk Ewoyaa
from a funding perspective. We are delighted that Ghana's sovereign wealth
fund, the Minerals Income Investment Fund, has agreed terms to invest in the
Company and its local Ghanaian subsidiaries. Having MIIF invest at the listed
company and Project level more closely aligns the Government with the success
of the Project, enables us to return further value from Ewoyaa to Ghana and
strengthens the Company's cash balance.
"Our partner Piedmont Lithium also demonstrated its unwavering support of
the Project by committing to sole fund the first US$70m, and 50% of any
additional costs thereafter, of the total development expenditure indicated in
the DFS for the Project, constituting the next phase of its staged earn-in
agreement. We welcome Piedmont's ongoing funding and technical support as we
work together towards our shared goal of delivering Ewoyaa as one of the next
globally significant lithium producers.
"Based on the US$185m total development expenditure figure indicated in the
DFS for the Project, and on the assumption of the completion of the agreements
the Company currently has in place with MIIF and Piedmont, the Company's
funding allocation is considerably reduced, equating to only US$38m. We have
commenced a competitive offtake partnering process with a global investment
bank for a portion of the remaining 50% of the available feedstock from Ewoyaa
and expect to cover this remaining figure through a pre-payment arrangement.
"Following the grant of the Mining Lease, we are now working to deliver upon a
number of growth catalysts as we move towards production. These include the
completion of the permitting process, conducting the flotation, feldspar and
downstream conversion studies, preparing the Company for shovel readiness and
enhancing the value of the Project through further exploration.
"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/7850R_1-2023-10-30.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7850R_1-2023-10-30.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 September 2023, the Company had an
interest in the following tenements:
Tenement Number Tenement Principal Grant Date/ Expiry Date Term Change during Quarter
Name
Holder
Application Date
Ghana
PL3/67 Apam East Obotan Minerals Company Limited 27.06.19 26.06.22* 3 years None
(JV MODA Minerals Limited)
PL3/92 Apam West Obotan Minerals Company Limited 21.08.19 20.08.22* 3 years None
(JV MODA Minerals Limited)
RL 3/55 Mankessim(+) Barari DV Ghana Limited 27.07.21 26.07.24 3 years None
(90% Atlantic)
PL3/102 Saltpond Joy Transporters Limited 21.08.19 20.08.22* 3 years None
(100% Atlantic)
PL3/109 Mankessim South Green Metals Resources Limited 19.02.20 18.02.23* 3 years None
(100% Atlantic)
PL3/106 Cape Coast Joy Transporters Limited 15.11.21 14.11.24 3 years None
(100% Atlantic)
Senya Beraku Green Metals Resources Limited (100% Atlantic) 10.05.16 Application None
Asebu Green Metals Resources Limited 28.06.21 Application None
(Winneba North)
(100% Atlantic)
Mankwadze (Winneba South) Green Metals Resources Limited 28.06.21 Application None
(100% Atlantic)
Mankwadzi Obotan Minerals Company Limited 15.03.18 Application None
(JV MODA Minerals Limited)
Bewadze Green Metals Resources Limited 23.08.21 Application None
(100% Atlantic)
Onyadze Green Metals Resources Limited 23.08.21 Application None
(100% Atlantic)
Ivory Coast
PR695 Rubino Khaleesi Resources SARL 20.10.16 Application None
(100% Atlantic)
PR694 Agboville Khaleesi Resources SARL 20.10.16 Application None
(100% Atlantic)
* 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.
(+) Post-period end, the Company was granted a Mining Lease (ML-3/329) in
respect of the Lease Area which holds the Ewoyaa Lithium Project within the
Company's Mankessim prospecting licence (refer announcement of 20 October
2023).
September Quarter Activities
Project Development
Piedmont Lithium Commitment to Ewoyaa Development Funding
In accordance with its investment agreement ("Agreement") to earn up to 50%
interest of the Company's share of the Ghana Portfolio, inclusive of Ewoyaa
(refer announcement of 1 July 2021), the Company's partner Piedmont Lithium
(NASDAQ: PLL; ASX: PLL, "Piedmont") has exercised its option to acquire an
initial 22.5% interest in the Ghana Portfolio (refer announcement of 17 August
2023).
As set out in Stage 3 of the Agreement, to earn the full 50% interest in the
Company's share of the Ghana Portfolio, Piedmont will sole fund the first
US$70m, and 50% of any additional development expenditure thereafter, towards
the total US$185m development expenditure for the Project indicated in the
Definitive Feasibility Study ("DFS").
Stage 3 is intended to result in the completion of construction and initial
production of spodumene concentrate at Ewoyaa, demonstrating Piedmont's
unwavering belief in the viability of the Project.
Piedmont's commitment to the Project's funding represents a further de-risking
milestone towards the Company's shared goal of delivering a successful
spodumene concentrate mine at Ewoyaa.
Feldspar Study
The Company has signed a Memorandum of Understanding ("MOU") with The
University of Mines and Technology ("UMaT"), Tarkwa in the Western Region of
Ghana to undertake a Definitive Feasibility Study ("Feldspar Study") to assess
the viability of producing feldspar feedstock as a by-product of spodumene
concentrate production at Ewoyaa (refer announcement of 15 August 2023).
The partnership will assess the prospective market conditions and commercial,
technical and financial viability of the production of feldspar, quartz
(silica) and muscovite, by-products of the proposed Ewoyaa Lithium Processing
Plant.
Atlantic Lithium has identified an opportunity for the feldspar produced at
Ewoyaa to be supplied into the domestic market to support Ghana's ceramics
sector.
The Company is targeting to define a maiden feldspar JORC (2012) Complaint
Mineral Resource Estimate ("MRE"), enabling the inclusion of a feldspar
by-product credit in the financial model of the current DFS (which does not
currently consider any activity in relation to the production of feldspar).
The Company believes that the commercialisation of feldspar at Ewoyaa offers
the potential to reduce the Project's waste footprint and generate significant
value to the Company and to Ghana, in addition to the Project's lithium
production.
Flotation Scoping Study
The Company has 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 addition of a flotation
circuit, downstream from the proposed Ewoyaa Dense Media Separation ("DMS")
plant ("Flotation Scoping Study"; refer announcement of 13 July 2023).
The Flotation Scoping Study will evaluate the viability of the use of
flotation to process fines and middlings and the use of the 4.7Mt of 1.2%
Li(2)O fines material(1), currently intended to be sold as a secondary
product, as potential feedstock.
The Company believes that the inclusion of a downstream flotation circuit
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.
Ewoyaa Lithium Project Mining Lease
Post-period end, the Company announced that Ghana's Ministry of Lands and
Natural Resources had granted a Mining Lease in respect of the Company's
flagship Ewoyaa Lithium Project, comprising the proposed Ewoyaa Lithium Mine
and Processing Plant, enabling the advancement of the Project towards
commercial production (refer announcement of 20 October 2023).
The Mining Lease grants the Company exclusive rights to work, develop and
produce lithium (and other associated minerals) over the entirety of the 42.63
km(2) area within the Mankessim licence, held by Barari DV Ghana Limited
("Barari") and containing the Ewoyaa Project, for an initial period of 15
years.
The grant of the Lease, the first to be issued for lithium in Ghana, indicates
the strong support of the Government for Ewoyaa to become a top 10 hard rock
spodumene concentrate mine(1) and represents a major de-risking milestone in
the advancement of the Project towards construction and commercial production.
The terms of the Mining Lease were negotiated and agreed in line with the
Government's new Green Minerals Policy as being attractive for Ghana,
particularly enabling a framework that welcomes foreign investment into the
country, while also presenting the Company as the Government's 'partner of
choice' in its mutually beneficial, long-term growth objectives.
The terms reaffirm the Project's strong commercial viability and exceptional
profitability potential for a 2.7Mtpa steady state operation, producing a
total of 3.6Mt of spodumene concentrate (approximately 350,000tpa) over a
12-year mine life(1):
· Payback period of main processing plant of 9.5 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$675/t;
· Development cost estimate of US$185m;
· Post-tax NPV(8) of US$1.3bn, with free cash flow of US$2.1bn from Life
of Mine ("LOM") revenues of US$6.6bn.
Summary of Key Terms
Under the terms of the Mining Lease, the Government of Ghana will be entitled
to a 13% free carried interest in the Project and a 10% royalty rate once in
production.
Table 1 below is a table of key metrics that has been prepared to estimate and
evaluate Project cash flows and economic viability for a 2.7Mtpa steady state
operation over a 12-year mine life, using the parameters as defined in the DFS
and incorporating the agreed terms of the Mining Lease(1).
The full Project metrics can be found in Table 3 in the Appendix of the
announcement dated 20 October 2023.
Table 1 Summary of EWOYAA KEY METRICS - mINING lEASE TERMS (100%
PROJECT BASis(2))
Item Units Mining Lease
Revenue (all products) US$M 6,566
LOM Concentrate Pricing, FOB Ghana US$/t 1,587
Post-tax IRR % 94
C1 Cash Cost, after secondary product credits US$/t 377
All In Sustaining Cost (AISC) US$/t 675
Surplus Cashflow, Post Tax US$M 2,091
NPV(8) Post Tax US$M 1,301
Payback - Combined Months 17
Payback - Main Plant Months 9.5
Payback - Modular DMS Unit Months 3
EBITDA US$M 3,365
EBIT US$M 3,022
NPAT, LOM US$M 2,004
(
2) Whilst the asset is currently wholly owned by Atlantic Lithium Ltd,
Piedmont Lithium Inc. can earn up to half of the Company's ownership in the
Project through its funding agreement whereby Piedmont will sole fund the
first US$70m, and 50% of additional costs thereafter, of the total US$185m
development expenditure indicated in the DFS for the Project. The Government
of Ghana has the right to a 13% free carry once in production and the Minerals
Income Investment Fund has agreed Heads of Terms with the Company, which will
see it earn a 6% contributing interest in the Project.
(3) Mr S. Searle of Ashmore Advisory Pty Ltd is the Competent Persons for
Mineral Resources and Mr H. Warries of Mining Focus Consultants Pty Ltd for
Ore Reserves. For full Competent Persons statements, refer to the Competent
Persons section later in this announcement.
NOTE: Mineral Resources are inclusive of the Ore Reserves.
Under the terms of the Mining Lease, as earlier outlined, the Company has
agreed to undertake the Feldspar Study to assess the viability of producing
and processing feldspar feedstock as by-product of spodumene concentrate
production at the Project (refer announcement of 15 August 2023).
The Company will also conduct a scoping study ("Downstream Conversion Study")
to evaluate the economic benefits and viability of downstream lithium
conversion in Ghana. The Government of Ghana intends to offer significant
incentives to the Company to support the establishment of a conversion plant
in Ghana if, based on the results of the Downstream Conversion Study and
subject to relevant economic and market conditions, the Company decides to
undertake the building of a plant.
Furthermore, in accordance with Ghana's Local Content Regulations, the Company
has committed to establishing a path for the Company to list on the Ghana
Stock Exchange.
Project Ownership and Financing
Based on the assumption of the completion of the agreements that the Company
has in place (notably the Minerals Income Investment Fund's Strategic
Investment and Piedmont Lithium's staged earn-in agreement), Table 2 below
sets out the Project's ownership structure once in production:
Table 2 Ewoyaa lithium project ownership (once in production)
Company % Ownership
Atlantic Lithium 40.5
Piedmont Lithium 40.5
Minerals Income Investment Fund 6
Government of Ghana 13
Considering a total development expenditure of US$185m for the Project, as
indicated in the DFS, Figure 2 below indicates that the Company's allocation
of the remaining development expenditure equates to US$38m.
The Company believes that the competitive offtake partnering process that is
currently underway will attract funding offers which would cover the Company's
allocation of the remaining development expenditure for the Project, with a
preference for a pre-payment arrangement. Further details can be found in the
Corporate section of this announcement.
Figure 2 project funding
EPA Approval to Divert Mankessim Transmission Lines
Post-period end, the Company was notified that Ghana's Environmental
Protection Agency ("EPA") had granted authorisation for Ghana Grid Company Ltd
("GRIDCo"), which owns the country's National Interconnected Transmission
System, to carry out the requested diversion of two transmission lines
traversing planned mining areas within the Company's Mankessim licence (refer
announcement of 10 October 2023).
Forming part of the Project's mine plan, the diversion of the transmission
lines to the northern border of the Mankessim licence, which holds the Ewoyaa
Lithium Project, represents an important step towards shovel readiness.
Exploration
During the period, the Company advanced the planned 2023 exploration and
resource drilling programmes at Ewoyaa (refer announcement of 20 March 2023).
Infill, Extensional and Exploration Drilling
Further assay results for a total of 11,594m of infill and exploration reverse
circulation ("RC") drilling completed at Ewoyaa as part of the ongoing broader
18,500m programme were received during the period (refer announcements of 8
August 2023 and 6 September 2023).
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.
Highlight high-grade drill intersections, reported as downhole intercepts at a
0.4% Li(2)O cut-off and a maximum 4m of internal dilution, include (refer
Table 3):
· GRC0961: 48m at 1.31% Li(2)O from 137m
· GRC0959: 24m at 1.86% Li(2)O from 10m
· GRC0943: 29m at 1.37% Li(2)O from 184m
· GRC0951: 29m at 1.2% Li(2)O from 69m
· GRC0952: 23m at 1.51% Li(2)O from 23m
· GRC0955: 13m at 1.19% Li(2)O from 28m
· GRC0944: 9m at 1.6% Li(2)O from 223m
· GRC0928: 23m at 1.75% Li(2)O from 184m
· GRC0911: 15m at 1.3% Li(2)O from 68m
· GRC0911: 14m at 1.27% Li(2)O from 48m
· GRC0927: 9m at 1.57% Li(2)O from 263m
· GRC0912: 14m at 0.99% Li(2)O from 6m
Extensional drilling results at the Ewoyaa North-East deposit, which currently
sits outside of the current MRE(1), also confirm mineralisation extensions
outside of the current Resource envelope and remains open at depth (refer
Figure 3 and Figure 4).
Multiple high-grade drill intersections have been reported for infill drilling
results over significant apparent widths and relatively shallow depths at the
Ewoyaa South-2 deposit, which sits within the current MRE(1) (refer Figure 5).
Infill drilling is designed to convert Inferred Resources to higher confidence
Indicated Resources for future mine sequencing optionality and to grow the MRE
where mineralisation remains open at depth or along strike.
Figure 3 Location of reported assay results with highlight assay results
received for GRC0928 and GRC0929 at the Ewoyaa North-East deposit
Figure 4 Cross-section B-B' showing assay results received for GRC0928
and GRC0929 at the Ewoyaa North-East deposit
Table 3 Drill intersection highlights at greater than 5 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 Interval Li(2)O% Intersection Comment Hole metal content Li x m Hole depth_m Deposit
_m
Purpose
GRC0911 68 83 15 1.3 GRC0911: 15m at 1.3% Li(2)O from 68m Resource Drilling 19.5 0 EM
GRC0911 48 62 14 1.27 GRC0911: 14m at 1.27% Li(2)O from 48m Resource Drilling 17.78 0 EM
GRC0912 6 20 14 0.99 GRC0912: 14m at 0.99% Li(2)O from 6m Resource Drilling 13.86 0 EM
GRC0927 263 272 9 1.57 GRC0927: 9m at 1.57% Li(2)O from 263m Resource Drilling 14.13 0 EMNE
GRC0928 184 207 23 1.75 GRC0928: 23m at 1.75% Li(2)O from 184m Resource Drilling 40.25 0 EMNE
GRC0943 184 213 29 1.37 GRC0943: 29m at 1.37% Li(2)O from 184m Resource Drilling 39.73 0 EMNE
GRC0944 223 232 9 1.6 GRC0944: 9m at 1.6% Li(2)O from 223m Resource Drilling 14.4 0 EMNE
GRC0951 69 98 29 1.2 GRC0951: 29m at 1.2% Li(2)O from 69m Resource Drilling 34.8 0 EM
GRC0952 23 46 23 1.51 GRC0952: 23m at 1.51% Li(2)O from 23m Resource Drilling 34.73 0 EM
GRC0955 28 41 13 1.19 GRC0955: 13m at 1.19% Li(2)O from 28m Resource Drilling 15.47 0 EM
GRC0959 10 34 24 1.86 GRC0959: 24m at 1.86% Li(2)O from 10m Resource Drilling 44.64 0 EM
GRC0961 137 185 48 1.31 GRC0961: 48m at 1.31% Li(2)O from 137m Resource Drilling 62.88 0 EM
Note: Metal content is based on intercept rather than estimated true width
Figure 5 Location of reported assay results with highlight drill
intersections
Auger Drilling
Auger drilling remains ongoing, with two rigs active on the Saltpond licence,
as part of the total 20,000m 2023 programme. Drilling has concentrated on the
extensions to the known pegmatite swarm that form around a granitoid. The main
pegmatites that have been drilled include Ndasiman, Akramam, and Edzemor.
Remaining targets include an arcuate lithium-in-soils anomaly that projects
from the Edzemor pegmatites.
Soil Geochemistry Survey
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, remains underway following the
completion of the 100m x 100m grid soil geochemistry survey over the Cape
Coast licence.
Passive Seismic
During the period, the Company completed a passive seismic ambient noise
tomography ("ANT") survey over the immediate Ewoyaa MRE(1) footprint to test
the potential for concealed pegmatites (refer announcement of 19 April 2023).
The trial was the first time the technology has been used in Ghana and,
although a potential technical success, the decision was made to demobilise
the equipment. The Company may revisit ANT surveying at a later stage,
however, in the short term, will instead allocate capital towards further
drilling and resource growth within the immediate Project footprint.
Corporate
MIIF Strategic Investment
On 8 September 2023, the Company announced that it had signed non-binding
Heads of Terms with the Minerals Income Investment Fund of Ghana ("MIIF") to
invest a total of US$32.9 million (A$51.4m / £26.3m) in the Company and its
Ghanaian subsidiaries ("Strategic Investment").
The Strategic Investment serves as a major indication of the Government of
Ghana's desire to see the Ewoyaa Lithium Project and broader Cape Coast
Lithium Portfolio in Ghana ("Ghana Portfolio") achieve commercial production.
Under the terms agreed, MIIF intends to invest US$27.9m (A$43.6m / £22.3m) in
the Company's Ghanaian subsidiaries which hold the Ghana Portfolio, inclusive
of Ewoyaa, to acquire a 6% contributing interest in the Ghana Portfolio. The
contributing interest will take the form of funding of development,
exploration and studies expenditure incurred during monthly cash calls.
MIIF has also agreed to subscribe for 19,245,574 Atlantic Lithium shares
("Subscription") at a price of US$0.2598 (A$0.41 / £0.21) per share, for a
value of US$5 million (A$7.8m / £4m), to be held in escrow, equating to 3.05%
of the total issued share capital of the Company.
Under the terms agreed, MIIF will be:
i. entitled to nominate one person to each of the boards of the Company's
Ghanaian subsidiaries;
ii. invited to participate in the competitive process for Ewoyaa's
available off-take; and
iii. granted one warrant for every two Atlantic Lithium shares subscribed
for under the Subscription at a 40% premium to the Subscription price.
The Strategic Investment will see MIIF become a key shareholder of the
Company, serving as an indication of MIIF's belief in Atlantic Lithium and
Ewoyaa as an investment proposition, as well as further aligning the
advancement of the Project with its Ghanaian stakeholders.
Offtake Partnering Process
The Company has commenced a competitive offtake partnering process with a
global investment bank. Through the process, the Company is offering potential
partners the opportunity to secure access to scarce near-term spodumene
concentrate offtake from the Ewoyaa Lithium Mine in exchange for competitive
funding. The aim is to attract funding offers to expedite and de-risk the
development of the Project and realise attractive terms for any offtake
contracted.
The Company is currently undertaking the initial stage of preparation and
early engagement with interested parties following a significant level of
inbound interest.
Strong demand has been received to date from a range of offtake partners
spanning the supply chain, including miners, traders, converters, cathode
& battery manufacturers, and OEMs.
Among the Company's key objectives of the process are to secure a
well-credentialled partner that can:
· support Ewoyaa's development and maximise shareholder value through
the provision of competitive funding;
· serve as an endorsement of the Project's industry-leading status,
· enhance the Company's relationships across the battery supply chain,
· consider broader strategic collaboration.
Investment highlights for Ewoyaa offtake partnering:
1 Quality product Proven, high quality concentrate with test work validating 5.5% and 6.0%
Li(2)O with low iron and mica impurities preferred for battery applications
2 Near-term product Atlantic is one of the limited hard rock lithium projects globally with
near-term uncommitted offtake availability and is anticipated to enter
production in H1 2026
3 Strategic location Strategically positioned to become a supplier of choice to expanding global
battery markets and well placed to supply into the growing US and European
markets
4 Reliable supply Life of mine all in sustaining cost of US$675/t, placing Ewoyaa competitively
on the spodumene cost curve and supporting resilient operations through the
price cycle
5 Low-risk operations Ewoyaa will be a conventional, open-pit hard rock lithium mining operation
with 2.7Mtpa DMS processing and a 12-year mine life underpinned by a 26Mt Ore
Reserve
6 Supportive jurisdiction Located in a well-established mining jurisdiction with access to existing
infrastructure, a supportive government and significant mining workforce
7 ESG aligned Low water and low energy-intensive plant in close proximity to infrastructure,
including adjacent grid power and a skilled Ghanaian workforce
8 Permitting Mining Lease granted, aligning the interests of the Government with
successfully delivering long-term lithium production in Ghana.
The offtake partnering process is expected to conclude in H1 2024.
The Company hopes that funding offers arising from the process, with a
preference for a pre-payment arrangement, would sufficiently cover its
remaining allocation of the development expenditure required to build the
Ewoyaa Lithium Mine.
Appointment of Head of Operational Readiness
The Company has appointed experienced strategy, operations and business
development executive Aaron Maurer as Head of Operational Readiness,
representing an important hire for the Company as it targets shovel 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.
In addition to Mr Maurer's appointment, following the grant of the Mining
Lease, Atlantic Lithium has continued recruit in key positions, both in
Australia and in Ghana, to add mine build and operating experience to the
Company.
Grant of Options Under Employee Share Option Plan
As a mechanism to attract, retain, motivate and reward employees, on 30 August
2023, the Company announced the allotment and issue of a combined total of
4,650,000 unlisted options to key employees (or their nominees) involved in
the development of the Ewoyaa Lithium Project under the Company's Employee
Share Option Plan.
The options have an exercise price of 30 pence and an expiry date of 31 August
2025.
Conferences Attended
The Company attended the following conferences during the period:
· Ghana Mining Expo, Takoradi (13-15 July)
· National Stakeholder Dialogue on Energy Transition: Focus on Lithium
Discovery in Ghana, Accra (14 July)
· Noosa Mining Investor Conference, Queensland (19-21 July)
· West African Institute of Mining, Metallurgy and Petroleum Students
Conference, Tarkwa (20-22 July)
· CRCC Central Regional Expo, Cape Coast (25 August - 2 September)
· Society of Economic Geologists Conference, London (26-29 August)
· Africa Down Under, Perth (6-8 September)
· Fastmarkets Battery Raw Materials Conference, Amsterdam (18-20
September)
· West Africa Mining Security Conference, Accra (20-21 September)
The Company also hosted a webinar on the Investor Meet Company platform
following the release of Company's results for the year ended 30 June 2023.
Investors can watch the Company's previous webinars and sign up to 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 September, the Company was proud to be a main sponsor of the West Africa
Mining Security Conference, an event advocating the sharing and adoption of
best practice security and risk mitigation strategies, hosted in Accra by the
Australian High Commission to Ghana.
The Australian High Commission in Ghana has been a valued advocate for the
Company in Ghana, voicing its support to the Ewoyaa Lithium Project as an
example of responsible modern mining practices and of how foreign investment
can deliver long-term benefits for the country.
Earlier in the month, alongside its attendance at the Africa Down Under
conference, Atlantic Lithium provided donations towards the
annual ADU Football Cup, hosted in Perth by Paydirt Media and Football
West, supporting local African communities through participation in sport.
Share Capital Changes - Ordinary Shares, Options and Performance Rights
During the period, 29 million options lapsed and were not exercised. Details
are as follows:
· 1 million unlisted options exercisable at £0.30 each
· 10 million unlisted options exercisable at £0.40 each
· 12 million unlisted options exercisable at £0.50 each
· 1 million unlisted options exercisable at £0.60 each
· 2 million unlisted options exercisable at £0.70 each
· 2 million unlisted options exercisable at £0.75 each
· 1 million unlisted options exercisable at £0.80 each
On 18 August 2023, 2.7 million unlisted performance rights lapsed.
On 22 August 2023, 3 million ordinary shares were issued to a personal related
party of Lennard Kolff, as a result of the exercise of unlisted ESOP options
exercisable at £0.30 each. A one-year loan was provided on the exercise of
options for the total exercise value of £900,000.
On 30 August 2023, 4.65 million unlisted options were granted to employees
with an exercise price of £0.30 and an expiry date of 31 August 2025
A summary of movement and balances of equity securities between 1 July 2023
and date of this report is as follows:
Ordinary Shares Unquoted Options Unquoted performance rights
On issue at start of Quarter 609,241,660 60,000,000 2,700,000
Shares issued - Exercise of ESOP options (22 August 2023) 3,000,000 (3,000,000)
Options issued (30 August 2023) 4,650,000
Options/Performance Rights lapsed (29,000,000) (2,700,000)
Total Securities on issue at date of this report 612,241,660 32,650,000 -
Compliance
During the quarter, the Company spent A$6.0m on its exploration, feasibility,
and development activities for its Ewoyaa Lithium Project in Ghana. 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$70m towards the total US$185m of development expenditure
forecasted in the DFS for the Project. Funding is shared equally thereafter.
Appendix 5B expenditure disclosure
As at end 30 September 2023, the Company had cash resources of A$10.6m and no
debt. Exploration and evaluation cash expenditure on the Project during the
quarter was A$6.0m. Piedmont Lithium Inc. funded A$3.0m 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 September 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 (389) (389)
(e) administration and corporate costs (1,645) (1,645)
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 (2,034) (2,034)
2. Cash flows from investing activities - -
2.1 Payments to acquire or for:
(a) entities
(b) tenements - -
(c) property, plant and equipment (133) (133)
(d) exploration & evaluation (5,954) (5,954)
(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 57 57
(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 2,996 2,996
2.6 Net cash from / (used in) investing activities (3,034) (3,034)
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 - -
3.4 Transaction costs related to issues of equity securities or convertible debt - -
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 - -
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 15,346 15,346
4.2 Net cash from / (used in) operating activities (item 1.9 above) (2,034) (2,034)
4.3 Net cash from / (used in) investing activities (item 2.6 above) (3,034) (3,034)
4.4 Net cash from / (used in) financing activities (item 3.10 above) - -
4.5 Effect of movement in exchange rates on cash held 287 287
4.6 Cash and cash equivalents at end of period 10,565 10,565
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 10,561 10,561
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other - Petty Cash 4 4
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 10,565 10,565
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) (2,034)
8.2 (Payments for exploration & evaluation classified as investing activities) (5,954)
(item 2.1(d))
8.3 Total relevant outgoings (item 8.1 + item 8.2) (7,988)
8.4 Cash and cash equivalents at quarter end (item 4.6) 10,565
8.5 Unused finance facilities available at quarter end (item 7.5) -
8.6 Total available funding (item 8.4 + item 8.5) 10,565
8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 1.3
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7.
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: Yes
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:
· Atlantic Lithium Ltd has been funded under a co-development agreement
with Piedmont Lithium Inc. Exploration and feasibility activities are 50%
funded by Piedmont and US$70.0m towards mine capex for the Ewoyaa Lithium
Project. Any additional expenditure for the development of the Project will be
shared equally between the Company and Piedmont.
· Owing by Piedmont at end of September 2023 is US$2m.
· Atlantic Lithium has agreed non-binding Heads of Terms with the Minerals
Income Investment Fund of Ghana ("MIIF") to invest a total of US$32.9m in the
Company and the Ghana subsidiaries. The proposed investment will support the
development of the Project and the broader Cape Coast Lithium Portfolio in
Ghana. Under the terms of the non-binding agreement, MIIF intend to invest an
initial US$27.9m to acquire a 6% contributing interest in the Company's Ghana
Portfolio and will make ongoing contributions through monthly cash calls as
the Project develops. MIIF also intend to subscribe for 19,245,574 shares in
Atlantic for a total value of US$5m.
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: Yes. The company has funding available (see 8.8.2).
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 October 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.
End Notes
(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 ("DFS"), 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 3.5Mt @ 1.37% Li(2)O in the Measured category, 24.5Mt
@ 1.25% Li(2)O in the Indicated category and 7.4Mt @ 1.16% Li(2)O in the
Inferred category. The Company confirms that all material assumptions and
technical parameters underpinning the MRE and the DFS 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.
Ewoyaa to become one of the top 10 largest spodumene concentrate producers
globally - Based on a comparison of targeted spodumene concentrate production
capacity (ktpa, 100% basis) of select hard rock spodumene projects globally
(refer Company presentation dated 8 September 2023).
Competent Persons
Information in this report relating to the exploration results is based on
data reviewed by Mr Lennard Kolff (MEcon. Geol., BSc. Hons ARSM), Chief
Geologist of the Company. Mr Kolff is a Member of the Australian Institute of
Geoscientists who has in excess of 20 years' experience in mineral exploration
and is a Qualified Person under the AIM Rules. Mr Kolff consents to the
inclusion of the information in the form and context in which it appears.
Information in this report relating to Mineral Resources was compiled by Shaun
Searle, a 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 being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the 'Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr
Searle is a director of Ashmore. Ashmore and the Competent Person are
independent of the Company and other than being paid fees for services in
compiling this report, neither has any financial interest (direct or
contingent) in the Company. Mr Searle consents to the inclusion in the report
of the maters based upon the information in the form and context in which it
appears.
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.
FOR ANY FURTHER INFORMATION, PLEASE CONTACT:
ATLANTIC LITHIUM LIMITED
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 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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