Investment Tips 28-11-2023 09:02 14 Views

Atlantic Lithium

Overview

Despite its long mining history, favourable regulatory climate and stable political backdrop, Ghana remains largely overlooked as an investment jurisdiction for battery metals. Situated on the West African coast, the country boasts a strong strategic location and an abundance of mineral wealth.

In 2023, the country reclaimed its title as Africa’s number one producer of gold. And gold isn’t the only precious metal to be found in the country. Ghana is also home to significant lithium reserves, with c. 180,000 tonnes of estimated resources.

In October 2023, Ghana awarded its historic first mining lease for lithium to Atlantic Lithium and the Ewoyaa Lithium Project, paving the way for Ewoyaa to become one of the next major spodumene concentrate producers. The mining lease is a major endorsement from the Ghanaian Government and a de-risking milestone as the Ewoyaa Project advances towards production.

Located between Europe, the United States and China, Ghana is perfectly positioned to serve as an important hub for the global supply of the battery metal.

A definitive feasibility study (DFS) released in June 2023 shows that, considering its current 35.3 million tons (Mt) @ 1.25 percent lithium oxide JORC Mineral Resource Estimate and conservative life-of-mine concentrate pricing of US$1,587/t, FOB Ghana Port, Ewoyaa has demonstrable economic viability, low capital intensity and excellent profitability. Through simple open-pit mining, three-stage crushing and conventional Dense Media Separation (DMS) processing, the DFS outlines the production of 3.6 Mt of spodumene concentrate over a 12-year mine life, delivering US$6.6 billion life-of-mine revenues.

Atlantic Lithium intends to deploy a Modular DMS plant ahead of commencing operations at the large-scale main plant to generate early revenue. The Modular DMS plant is expected to process 450,000 tonnes of ore as the main 2.7Mt processing plant is being constructed. The project is expected to deliver first spodumene production as early as April 2025.

The development of the project is co-funded under an agreement with NASDAQ and ASX-listed Piedmont Lithium (ASX:PLL), with Piedmont expected to fund c. 70 percent of the US$185 million total capex. In accordance with the agreement, Piedmont is funding US$17 million towards studies and exploration and an initial US$70 million towards the total capex. Costs are split equally between Atlantic Lithium and Piedmont thereafter.

In return, Piedmont will receive 50 percent of the spodumene concentrate produced at Ewoyaa, providing a route to consumers through several major battery manufacturers, including Tesla. With 50 percent of its offtake still available, Atlantic Lithium is one of very few near-term spodumene concentrate producers with uncommitted offtake.

Once in production, the Ewoyaa Lithium Project ownership will be as follows:

Atlantic Lithium

40.5 percent

Piedmont Lithium

40.5 percent

Minerals Income Investment Fund

6 percent

Government of Ghana

13 percent

Already the largest taxpayer and employer in Ghana’s Central Region, Atlantic Lithium is expected to provide direct employment to roughly 800 personnel at Ewoyaa during the construction phase and 900 once in operation. In addition, through its community development fund, 1 percent of the project’s revenue will be allocated to local initiatives to deliver long-lasting benefits to the Central Region and Ghana as a whole.

Atlantic Lithium also has the potential to capitalise upon considerable additional upside across its extensive exploration portfolio — potential it intends to leverage to the fullest as it becomes an early mover in West African lithium production.

Company Highlights

An exploration and development company operating in West Africa, Atlantic Lithium is set to deliver Ghana’s first lithium-producing mine with its flagship Ewoyaa Lithium Project.The company’s flagship Ewoyaa Lithium Project is set to become one of the top 10 largest spodumene concentrate producers globally. The Ewoyaa Project secured its mining lease in October 2023, representing a considerable de-risking milestone in the development of the project. The Minerals Income Investment Fund (MIIF) of Ghana has committed to invest a total of US$32.9 million in Atlantic Lithium and its Ghanaian subsidiaries to support the development of the Ewoyaa Lithium Project and broader Cape Coast Lithium Portfolio in Ghana. Ghana is a well-established mining region with access to reliable, existing infrastructure and a significant mining workforce. There are currently 16 operating mines in the country.There is significant government interest in getting Ewoyaa operational to diversify the country’s production from gold.Atlantic Lithium is already the leading taxpayer and employer in the region and, through Ewoyaa, expects to bring significant business and development locally.The June 2023 definitive feasibility study proves Ewoyaa to be a financially viable, major near-term lithium-producing asset.The project is co-funded under an agreement with Piedmont Lithium.With 50 percent of offtake still uncommitted, the company is one of few near-term spodumene producers with offtake available.Situated on the West African coast, Atlantic Lithium is well-positioned to serve the global electric vehicle markets.

Key Assets

Ewoyaa

Set to be Ghana’s first lithium-producing mine, Atlantic Lithium’s flagship Ewoyaa Project is situated within 110 kilometres of Takoradi Port and 100 kilometres of Accra, with access to excellent infrastructure and a skilled local workforce.

Highlights:

Grant of the mining lease represents a considerable de-risking milestone and maintains the project’s position as one of the lowest capital and operating cost hard rock lithium projects globally, indicating exceptional profitability potential.MIIF’s Strategic Investment highlights the desirability of the Ewoyaa Lithium Project as an investment, derisks the success of the project and sees MIIF contribute towards the development expenditure for the Project.Promising DFS Results: Atlantic Lithium’s recent DFS reaffirmed Ewoyaa as an industry-leading asset with low capital intensity and excellent profitability. Highlights include:Estimated 12-year life of mine, producing 3.6 Mt spodumene concentrate.365 ktpa steady state productionLife-of-mine revenues of US$6.6 billionModest $185 million capital cost4.6-Mt low-grade lithium secondary productExceptional Financial Outcomes:NPV8 of US$1.3 billionC1 cash operating costs of US$377/t FOB Ghana and all-in sustaining cost of US$675/tPayback of the main plant within 9.5 monthsIRR of 94 percentFavourable Location: The project’s starter pits are positioned within one kilometre of its processing plant. Additionally, Ewoyaa has access to reliable existing infrastructure, located within 800 metres from the N1 highway and adjacent to grid power.Promising Reserves: Ewoyaa’s current mineral resource estimate is 35.3 Mt at 1.25 percent lithium oxide, with ore reserves of 25.6 Mt at 1.22 percent lithium oxide.Potential for Further Exploration: There remains significant exploration potential, with only 15 square kilometres of Atlantic Lithium’s entire tenure having been drilled to date.Strong Partnerships: Atlantic Lithium has a 50-percent offtake deal with Piedmont Lithium, which itself has offtake agreements with both Tesla and LG Chem.Positive Presence: Atlantic Lithium will generate significant economic benefits to the region. Once operational, the project is expected to employ over 800 personnel during construction and 900 once in production.

Côte d’Ivoire

Atlantic Lithium currently has two applications pending for an area of roughly 774 square kilometres in the West African country of Côte d’Ivoire. The underexplored yet highly prospective region is known to be underlain by prolific birimian greenstone belts, characterised by fractionated granitic intrusive centres with lithium and colombite-tantalum occurrences and outcropping pegmatites. The area is also incredibly well-served, with extensive road infrastructure, well-established cellular network and high-voltage transmission line within roughly 100 kilometres of the country’s capital, Abidjan.

Management Team

Neil Herbert – Executive Chairman

Neil Herbert is a fellow of the Association of Chartered Certified Accountants and has over 30 years of experience in finance. He has been involved in growing mining and oil and gas companies both as an executive and as an investor for over 25 years. Until May 2013, he was co-chairman and managing director of AIM-quoted Polo Resources, a natural resources investment company.

Prior to this, Herbert was a director of resource investment company Galahad Gold, after which he became finance director of its most successful investment, the start-up uranium company UraMin, from 2005 to 2007. During this period, he worked to float the company on AIM and the Toronto Stock Exchange in 2006, raise US$400 million in equity financing and negotiate the sale of the group for US$2.5 billion.

Herbert has held board positions at a number of resource companies where he has been involved in managing numerous acquisitions, disposals, stock market listings and fundraisings. He holds a joint honours degree in economics and economic history from the University of Leicester.

Keith Muller – Chief Executive Officer

Keith Muller is a mining engineer with over 20 years of operational and leadership experience across domestic and international mining, including in the lithium sector. He has a strong operational background in hard rock lithium mining and processing, particularly in DMS spodumene processing. Before joining Atlantic Lithium, he held roles as both a business leader and general manager at Allkem, where he worked on the Mt Cattlin lithium mine in Western Australia.

Prior to that, Muller served as operations manager and senior mining engineer at Simec. He holds a Master of Mining Engineering from the University of New South Wales and a Bachelor of Engineering from the University of Pretoria. He is also a member of the Australian Institute of Mining and Metallurgy, the Board of Professional Engineers of Queensland, and the Engineering Council of South Africa.

Amanda Harsas – Finance Director and Company Secretary

Amanda Harsas is a senior finance executive with a demonstrable track record and over 25 years’ experience in strategic finance, business transformation, commercial finance, customer and supplier negotiations and capital management. Prior to joining Atlantic Lithium, she worked across several sectors including healthcare, insurance, retail and professional services. Harsas is a chartered accountant, holds a Bachelor of Business and has international experience in Asia, Europe and the US.

Len Kolff – Head of Business Development and Chief Geologist

Len Kolff has over 25 years of mining industry experience in the major and junior resources sector. With a proven track record in deposit discovery and a particular focus on Africa, Kolff most recently worked in West Africa and was instrumental in the discovery and evaluation of the company’s Ewoyaa Lithium Project in Ghana, as well as the discovery and evaluation of the Mofe Creek iron ore project in Liberia. Prior to this, he worked at Rio Tinto with a focus on Africa, including the Simandou iron ore project in Guinea and the Northparkes Copper-Gold mine in Australia.

Kolff holds a Master of Economic Geology from CODES, University of Tasmania and a Bachelor of Science (Honours) degree from the Royal School of Mines, Imperial College, London.

Patrick Brindle – Non-executive Director

Patrick Brindle currently serves as executive vice-president and chief operating officer at Piedmont Lithium. He joined Piedmont in January 2018. Prior to this, he held roles as vice-president of project management and subsequently as chief development officer.

Brindle has more than 20 years’ experience in senior management and engineering roles and has completed EPC projects in diverse jurisdictions including the United States, Canada, China, Mongolia, Australia and Brazil. Before joining Piedmont, he was vice-president of engineering for DRA Taggart, a subsidiary of DRA Global, an engineering firm specialising in project delivery of mining and mineral processing projects globally.

Kieran Daly – Non-executive Director

Kieran Daly is the executive of growth and strategic development at Assore. He holds a BSc Mining Engineering from Camborne School of Mines (1991) and an MBA from Wits Business School (2001) and worked in investment banking/equity research for more than 10 years at UBS, Macquarie and Investec prior to joining Assore in 2018.

Daly spent the first 15 years of his mining career at Anglo American’s coal division (Anglo Coal) in a number of international roles including operations, sales and marketing, strategy and business development. Among his key roles were leading and developing Anglo Coal’s marketing efforts in Asia and to steel industry customers globally. He was also the global head of strategy for Anglo Coal immediately prior to leaving Anglo in 2007.

Christelle Van Der Merwe – Non-executive Director

Christelle Van Der Merwe is a mining geologist responsible for the mining-related geology and resources of Assore’s subsidiary companies (comprising the pyrophyllite and chromite mines) and is also concerned with the company’s iron and manganese mines. She has been the Assore group geologist since 2013 and involved with strategic and resource investment decisions of the company. Van Der Merwe is a member of SACNASP and the GSSA.

Aaron Maurer – Head of Operational Readiness

Aaron Maurer is a senior-level business executive with over 25 years’ international multi-commodity mining experience, overseeing strategic, operational and financial performance. Over his career, he has held several engineering, production, operational and senior executive roles. Before joining Atlantic Lithium, he served as executive general manager – operations at Minerals Resources, where he oversaw the Mt Marion Lithium mine and three iron ore mines in Western Australia. He was previously the managing director and CEO of PVW Resources and general manager (site senior executive) at Peabody Energy Australia.His significant expertise spans the development and implementation of safety and cost-saving initiatives, change management, strategic planning, business development and employee development. Maurer holds a Master in Corporate Finance and a Bachelor of Engineering (Mining).

Roux Terblanche – Project Manager

Roux Terblanche is a mineral resource project delivery specialist with proven African and Australian experience working for owners, EPCMs, consultants and contractors. He has a wide range of commodity experiences, including lithium, gold, copper, diamonds and platinum. He has proven to add value and deliver projects safely, on time and within budget.

Terblanche has worked in the UAE and across Africa, including Ghana, the DRC, Burkina Faso, Zambia, Rwanda, Botswana and Senegal. He was instrumental in increasing the operating footprint of an international construction company across Africa and was integral to the building of the Akyem, Tarkwa Phase 4 and Chirano mines in Ghana.

Terblanche holds a national diploma in mechanical engineering, a diploma in project management and a Bachelor of Commerce from the University of South Africa.

Iwan Williams – Exploration Manager

Iwan Williams is an exploration geologist with over 20 years’ experience across a broad range of commodities, principally iron ore, manganese, gold, copper (porphyry and sed. hosted), PGE’s, nickel and other base metals, as well as chromitite, phosphates, coal and diamond.

Williams has extensive southern and west African experience and has worked in Central and South America. His experience includes all aspects of exploration management, project generation, opportunity reviews, due diligence and mine geology. He has extensive studies experience having participated in the delivery of multiple project studies including resource, mine design criteria, baseline environmental and social studies and metallurgical test-work programmes. He is very familiar with working in Africa having spent 23 years of his 28-year geological career in Africa. Williams is a graduate of the University of Liverpool.

Abdul Razak – Country Manager

Abdul Razak has extensive exploration, resource evaluation and project management experience throughout West Africa with a strong focus on data-rich environments. He has extensive gold experience having worked throughout Ghana with AngloGold Ashanti, Goldfields Ghana, Perseus and Golden Star, as well as international exploration and resource evaluation experience in Burkina Faso, Liberia, Ivory Coast, Republic of Congo, Nigeria and Guinea.

Razak is an integral member of the team, managing all site activities including drilling, laboratory, local teams, geotech and hydro, community consultations and stakeholder engagements and was instrumental in establishment of the current development team and defining Ghana’s maiden lithium resource estimate. He is based at the project site in Ghana.

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