Atlantic Lithium (ALL ), an Africa-focused lithium explorer, issued a Q1 update for the period ended 31 March 2023 which included a significant Mineral Resource Estimate (MRE) upgrade for its flagship Ewoyaa Lithium Project in Ghana. 

The resource now stands at 35.3Mt at 1.25% Li2O with 79% of the overall MRE now in the higher-confidence Measured and Indicated categories. The new MRE incorporates all results from the Atlantic's 47,000m 2022 work programme.

Meanwhile, the 2023 programme has commenced, comprising of 20,000m of auger drilling to test multiple targets, preceded by a 100x100m geochemistry survey over the Cape Coast licence, as well as a passive seismic survey to test for potential concealed pegmatite targets.

Additionally, 10,000m of infill drilling commenced post-period and approx. 2,000m of diamond core (DD) drilling for proejct studies, including water monitoring, metallurgy, and resource twinning of reverse circulation (RC) holes.

Atlantic also unveiled in Q1 a staged project development plan, part of its upcoming Definitive Feasibility Study (DFS) for the project, focusing on improving plant efficiency and increased metal recovery to optimise the project's economics.

Atlantic's cash on hand at end of Q1 was A$16m (£8.44m). Ewoyaa's Definitive Feasibility Study (DFS) is underway and targeted for release in Q2 2023.

 

View from Vox

Atlantic's Q1 2023 built on the strong momentum of 2022 that saw a 47km work programme lead to a material upgrade in Ewoyaa's MRE. The new MRE shows 35.3Mt at 1.25% Li2O, including 28Mt in the higher-confidence Measured and Indicated categories. The updated MRE will be incorporated into Ewoyaa's Definitive Feasibility Study (DFS) due in Q2 2023.

During the period, Atlantic provided an update on the ongoing DFS. The abovementioned planned staged developments aim to increase metal recovery and improve plant efficiency, which is expected to significantly enhance the project's economics. These planned developments include evaluating the potential for early-stage lithium spodumene concentrate production and establishing a route to market for the feldspar byproduct.

While the DFS is targeted for release next quarter, Ewoyaa's pre-feasibility study (PFS) was announced in January. The PFS forecast significant profitability potential for a 2 Mtpa operation, producing an average of 255,000 tpa of 6% Li2O spodumene concentrate (SC6) over a 12.5-year life of mine (LOM), based on the maiden MRE.

Specifically, the pre-feasibility study delivers LOM revenues exceeding US$4.84bn, a post-tax NPV8 of US$1.33bn, and IRR of 224% over 12.5 years. Capital costs were US$125m with a short payback period of  less than 5 months, and average LOM EBITDA was US$248m/year. The study used average annualised US$1,359/dry metric tonne SC6 pricing and US$1,200/dry metric tonne long-term pricing.

Atlantic's 2023 exploration and resource drilling programme for Ewoyaa is even more ambitious than its 2022 programme, with three main objectives: target and test for potential concealed pegmatites, improve resource confidence and add potential tonnes to the MRE, and expand the regional exploration pipeline of targets.

Overview of planned 2023 exploration and resource programmes' targets

Looking ahead, investors should note the upcoming release of the DFS and completion of the Front-End Engineering Design (FEED). Atlantic is also in regular contact with the Ghanaian government regarding a Mining Lease it applied for last autumn.

With a pre-feasibility study delivered and DFS in progress, a mining license application submitted, FEED contract awarded, and US$103m funding from Piedmont Lithium in place, Atlantic is on track to achieve production in the near term.

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