REG - Atlantic Lithium Ltd - US$32.9m Strategic Investment

Atlantic LithiumAnnouncement

08/09/2023 07:00

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RNS Number : 8034L  Atlantic Lithium Limited  08 September 2023

 

8 September 2023

Minerals Income Investment Fund of Ghana To Invest US$32.9m

Ghana's Minerals Income Investment Fund agrees to invest US$32.9 million in Atlantic Lithium and its Cape Coast Lithium Portfolio subsidiaries in Ghana to support the development of the Ewoyaa Lithium Project

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
announce that it has agreed 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"). MIIF's proposed investment will support the development of the
Company's flagship Ewoyaa Lithium Project ("Ewoyaa" or the "Project") and the
broader Cape Coast Lithium Portfolio in Ghana ("Ghana Portfolio") towards
production.

Highlights

·    Minerals Income Investment Fund of Ghana to invest a total of
US$32.9m (A$51.4m / £26.3m) in the Company and its Ghanaian subsidiaries to
support the development of the Ewoyaa Lithium Project and broader Cape Coast
Lithium Portfolio in Ghana.

·    MIIF to invest US$27.9m (A$43.6m / £22.3m) in the Company's Ghanaian
subsidiaries to acquire a 6% contributing interest in the Company's Ghana
Portfolio, inclusive of the Ewoyaa Lithium Project. The contributing interest
will take the form of funding of development, exploration and studies
expenditure.

·    MIIF 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$5m (A$7.8m / £4m), to be held in escrow, equating to 3.05% of the
total issued share capital of the Company.

·    Under the non-binding terms of the Strategic Investment, 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 near-term 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.

·   MIIF's Strategic Investment further aligns the Company and its
spodumene concentrate production ambitions at Ewoyaa and its Ghana portfolio
with its Ghanaian shareholders.

·    The Strategic Investment highlights the desirability of the Ewoyaa
Lithium Project, derisks the success of the Project and sees MIIF contribute
towards the development expenditure for the Project.

·    The Strategic Investment is a major endorsement by an African
sovereign wealth fund and spotlights Ghana as a highly attractive mining
jurisdiction and a pioneer in the decarbonisation thematic.

Shareholders should note that, at this stage, the agreement is non-binding
and, therefore, there can be no certainty that the proposed Strategic
Investment by MIIF will be concluded or on what terms it might be concluded.

 

Commenting, Neil Herbert, Executive Chairman of Atlantic Lithium, said:

"At this important stage in the Project's development, as we advance towards
first production, we are delighted that the Minerals Income Investment Fund of
Ghana has agreed to invest US$32.9 million in the Company to support of
Atlantic Lithium's flagship Ewoyaa Lithium Project and broader lithium
portfolio in Ghana. We strongly welcome MIIF's ongoing support as a key
shareholder.

"MIIF's investment, at both the listed company level and via Atlantic
Lithium's Ghanaian subsidiaries, represents a huge endorsement of the
Company's work to date and its belief in Atlantic Lithium to establish Ghana
as a major producer of spodumene concentrate.

"We consider Ewoyaa as a Ghanaian project for Ghanaians. Having MIIF as a
shareholder not only de-risks the Project from a funding perspective but,
equally importantly, further aligns the Company with the best interests of its
Ghanaian stakeholders, who we are proud to represent.

"Furthermore, an investment by Ghana's sovereign wealth fund demonstrates the
Government of Ghana's conviction in the Project, showcasing its intent to
support the critical minerals agenda and position the country as a leading
mining investment jurisdiction in Africa. In Ewoyaa, Ghana has a new pillar in
its diversified minerals offering, further developing its esteemed mining
credentials, which date back over a century.

"MIIF's investment in the Company's Ghanaian subsidiaries will be used towards
ongoing development, exploration and study expenditure across Ewoyaa and the
Company's broader portfolio. MIIF's contributions will significantly derisk
the success of the Project. In this way, we feel MIIF will share ownership in
Ghana's efforts to drive the country's position in the global EV supply
chain."

 

Edward Nana Yaw Koranteng, Chief Executive Officer of MIIF, added:

"The Minerals Income Investment Fund of Ghana is a minerals sovereign wealth
fund with an underlying objective of supporting the growth of mining in Ghana
and providing a de-risking option for investors in the mining space in Ghana.
The investment in Atlantic Lithium underscores this underlying objective and
is indeed a watershed moment as this is our first investment in the lithium
space globally. The Ewoyaa project is world class, with huge prospects in the
other tenements under Atlantic Lithium.

"The acquisition of a 6% contributing interest in the Company's Ghanaian
subsidiaries will support the funding of ongoing capital and exploration
expenditure requirements across Ewoyaa and the broader Atlantic Lithium
portfolio. This is just our initial investment in Atlantic Lithium and its
Ghanaian subsidiaries. We hope to later invest in the value chain and the
development of other by-products, such as feldspar, in line with the
Government of Ghana's critical minerals policy.

"Our investment highlights Ghana as arguably the best mining investment
destination in Africa in view of the options MIIF provides to investors. For
us at MIIF, this is the start of a partnership with Atlantic Lithium beyond
Ghana. We are confident that this initial investment will enhance and
accelerate Ghana's efforts as an African critical minerals hub and to
establish the country's position in the global EV supply chain."

 

Strategic Investment

The Minerals Income Investment Fund of Ghana ("MIIF") has agreed to invest a
total of US$32.9 million (A$51.4m / £26.3m) in the Company ("Strategic
Investment") to support the development of the Company's flagship Ewoyaa
Lithium Project ("Ewoyaa" or the "Project") and broader Cape Coast Lithium
Portfolio in Ghana ("Ghana Portfolio") towards production.

Under the non-binding Heads of Terms agreed, MIIF will invest in the Company's
Ghanaian subsidiaries Barari DV Ghana Ltd, Green Metals Resources Limited,
Moda Minerals Limited and Joy Transporters Ltd, which hold the Company's
lithium tenements. MIIF will acquire a 6% contributing interest of the Ghana
Portfolio for a total consideration of US$27.9 million (A$43.6m / £22.3m),
payable on completion of the Strategic Investment.

The contributing interest will take the form of funding of development,
exploration and studies expenditure incurred via monthly cash calls.

MIIF has 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.

In line with the subscription, MIIF agrees not to sell any of the Atlantic
Lithium Shares for:

(1)        in respect of 6.5 million Atlantic Lithium Shares, 24 months
from the date of issue;

(2)        in respect of 6.5 million Atlantic Lithium Shares, 36 months
from the date of issue;

(3)        in respect of 6,245,574 Atlantic Lithium Shares, 48 months
from the date of issue.

The Company will be granted the right to buy back MIIF's interest in the
Company's Ghanaian subsidiaries if MIIF notifies of its interest to sell.

MIIF will also be granted one warrant for every two Atlantic Lithium shares at
a price of US$0.3637, which will expire after a period of 18 months. Any
shares issued on the exercise of the warrants will be escrowed for two years.

Under the terms of the Strategic Investment, MIIF will be entitled to nominate
one person to be a director of each of the Company's Ghana Portfolio
subsidiaries.

MIIF will also be invited to participate in the near-term competitive process
for Ewoyaa's available off-take, expected to commence imminently.

The exchange rates used in the announcement are as follows:

USD-GBP: 0.80

AUD-USD: 0.64

 

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. At the Ewoyaa
Project, Atlantic Lithium intends to be producing spodumene concentrate via a
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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