Atlantic Lithium (ALL) , an Africa-focused lithium explorer, updated markets on the development of its flagship Ewoyaa lithium project in Ghana. A number of key contracts have been advanced recently to move the project along:
Atlantic is in advanced discussions for the award of an Engineering, Procurement, Construction and Management (EPCM) contract for Ewoyaa's main processing plant and all non-processing infrastructure.
Additionally, the award of a contract to divert transmission lines crossing the project site is expected in Q2 2024. Atlantic said it expects a 30-50% overall electricity cost reduction for Ewoyaa following the award of a Bulk Customer Permit.
Furthermore, tender stage is underway to appoint a mining contractor and for the procurement of a modular Dense Media Separation (DMS) unit. Tender stage is also to commence imminently for the procurement of a mobile crusher to feed the modular DMS unit.
Atlantic has finalised the Ewoyaa flotation scoping study, confirming the viability of the inclusion of a downstream flotation circuit for future value addition. The project may also benefit from feldspar production as a byproduct of spodumene production, with a feldspar study underway and a maiden feldspar Mineral Resource Estimate expected in Q4 2023.
Atlantic has also contracted Engineering Procurement and Construction firm Mincore to assess the potential to establish a downstream lithium conversion plant in Ghana, as agreed under the terms of the recently granted Mining Lease for the project.
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Ewoyaa is firmly on the path to production following last month's historic grant of a Mining Lease by the government of Ghana that made Atlantic the first company to be given permission to mine lithium in the country. Alongside recently extended exploration programmes, good progress is being made toward shovel readiness, with permitting well underway. Commencement of construction is targeted for late 2024, and initial production for early 2025.
The Flotation Scoping Study established significantly enhanced recovery of P2 finer-grained pegmatite material and confirmed the case for the inclusion of a flotation circuit, to operate independently and downstream from the main DMS plant. The flotation circuit is expected to be built after the main processing plant achieves 2.7Mt steady annualised throughput, and should enhance the project's already robust economics.
As agreed under the terms of the Mining Lease, work on feldspar and downstream conversion studies is also progressing. Simultaneously, discussions are advancing with regards to commercial contracts critical to the development of the project, now being within 2 years of initial production.
Ewoyaa has strong economics as one of the lowest capex and opex hard lithium projects globally - with strong commercial metrics and profitability potential for a 2.7Mtpa operation, producing a total of 3.6Mt of spodumene concentrate (approx. 350,000tpa) over a 12-year mine life (LOM).
Specifically, per Ewoyaa's updated definitive feasibility study (DFS), the project boasts a post-tax NPV8 of US$1.3bn, with free cash flow of US$2.1bn from LOM revenues of US$6.6bn and average LOM EBITDA of US$280m per year. C1 cash operating costs are estimated at US$377/t of concentrate Free-On-Board Ghana Port, after by-product credits, with an AISC of US$675/t.
Ewoyaa's development cost is estimated at US$185m. The project continues to gain funding, as existing US-based partner Piedmont recently committed US$70m and 50% thereafter of the total capex, and Ghana's Mineral Income Investment Fund provisionally agreed to invest US$32.9m. Atlantic has also commenced an offtake partnering process with a "major investment bank", aiming to attract offers to further expediate and derisk the project. As it stands, once in production Atlantic will own 40.5% of Ewoyaa, Piedmont will own an equal 40.5%, Ghana's Mineral Income Investment Fund will own 6%, and the government of Ghana will own 13%.
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