Atlantic Lithium (ALL) , an Africa-focused lithium explorer, issued an update on activities in Q2 2023 ended 30 June 2023. During the quarter, the company conducted a Definitive Feasibility Study (DFS) for its flagship Ewoyaa Lithium Project in Ghana, which reaffirmed the project's economic viability.
The Ewoyaa Definitive Feasibility Study outlined a 3.6Mt spodumene concentrate production over a 12-year Life of Mine (LOM). The DFS established exceptional project economics with a post-tax NPV8 of US$1.5bn and a free cash flow of US$2.4bn from LOM revenues of US$6.6bn, an average LOM EBITDA of US$316m/year, and an internal rate of return (IRR) of 105% with a short payback of 19 months.
Capital costs were low at an estimated US$185m, with US$127.5m to be provided by funding partner Piedmont Lithium. C1 cash operating costs were US$377/t of concentrate Free-On-Board Ghana Port, after by-product credits from conventional open cut mining operation. All in Sustaining Cost (AISC) was US$610/t.
The study incorporated modular DMS units to generate early cash flow, and increased throughput from 2Mtpa to 2.7Mtpa. Early modular DMS revenues will reduce the mine build peak funding requirement, with capex paid back prior to full completion of the plant build. An additional 4.7Mt of secondary product is anticipated as by-product from the DMS concentrator, with average grade of 1.16% Li2O.
The DFS maintains low capital intensity of US$64/t of annualised throughput. Throughput increased by 35% following a significant uplift in ore reserves to 25.6Mt @ 1.22% Li2O. The DFS uses a Mineral Resource Estimate (MRE) of 35.3Mt @ 1.25 Li2O and a conservative LOM concentrate pricing of US$1,587/t, FOB Ghana Port.
Post-period, Atlantic appointed DRA Global to conduct a scoping study to assess the viability of including an additional flotation circuit downstream to the main DMS plant. The scoping study's results are expected in Q4 2023.
On the exploration front, Atlantic continued to advance its 2023 drilling programme at Ewoyaa, with initial assay results received for 2,208m of infill RC drilling confirming mineralisation continuity at the Ewoyaa South-2 deposit. Multiple high-grade drill intersections were reported as downhole intercepts.
Atlantic's cash on hand at end of quarter was A$15.3m.
Conclusion
In summary, the clear highlight of Atlantic's June quarter was Ewoyaa's Definitive Feasibility Study. The DFS derisked the project significantly, establishing an attractive value proposition with long-term robust economics and profitability potential.
Using conservative pricing, the DFS outlines 3.6Mt concentrate production over a 12-year mine life, delivering US$6.6bn in revenues with a post-tax NPV8 of US$1.5bn and an IRR of 105%. Moreover, the study indicates payback within only 19 months and maintains a low capital intensity.
It should be noted that the increase in capex from Ewoyaa's earlier pre-feasibility study comes from the inclusion of the modular DMS units and the increased throughput of 2.7Mtpa. Early revenue generated by the modular DMS units will reduce the peak funding requirement for the mine build, which is Atlantic's justification for choosing the technology.
Stage 2 of Ewoyaa's development will also incorporate a feldspar circuit. Feldspar is a by-product of the DMS process that Atlantic intends to supply to the Ghanaian ceramics market.
The project also benefits from close proximity to operational infrastructure, a low-water and low-energy plant, and proximity to potential off-takers. "Due to its grade, the Project's coastal location and against the backdrop of the global decarbonisation movement, demand from off-takers for product from Ewoyaa has been strong." said Keith Muller, CEO of Atlantic Lithium.
With the DFS delivered, 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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