Atlantic Lithium inks heads of terms for Ghana sovereign fund investment

Atlantic Lithium announced a non-binding heads of terms with Ghana's Minerals Income Investment Fund (MIIF) on Friday, which if finalised, would see MIIF invest $32.9m in both Atlantic Lithium and its Ghanaian operations, to further the Ewoyaa Lithium Project and the encompassing Cape Coast Lithium Portfolio.

The AIM-traded firm said the investment breakdown would consist of MIIF channelling $27.9m into the company's Ghanaian affiliates, enabling them to acquire a 6% contributing interest in the Ghana Portfolio, including the Ewoyaa Project.

That interest mainly consisted of the funding for the project's development, exploration, and associated studies.

Looking at the equity arrangement, Atlantic said MIIF was planning to purchase 19,245,574 shares of Atlantic Lithium for 25.98 US cents per share, totalling $5m.

That would account for 3.05% of the total shares issued by the company.

If the strategic investment agreement was actualised, MIIF would secure rights to nominate one individual to the boards of each Ghanaian subsidiary.

Additionally, they would participate in the upcoming competitive process for Ewoyaa's off-take, and also receive one warrant for every two shares they acquire, priced at a 40% premium.

Atlantic Lithium said MIIF's proposed strategic involvement signified strong support from an African sovereign wealth fund.

The company did note, however, that the current agreement was non-binding, with no guaranteed assurance that MIIF's proposed strategic investment would materialise or, if it did , under what terms.

“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 $32.9m in the company to support of Atlantic Lithium's flagship Ewoyaa Lithium Project and broader lithium portfolio in Ghana,” said executive chairman Neil Herbert.

“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.”

Herbert said the company considered 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.”

Neil Herbert added that MIIF's investment in the company's Ghanaian subsidiaries would 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 electric vehicle supply chain.”

At 1008 BST, shares in Atlantic Lithium were up 19.71% at 24.9p.

Reporting by Josh White for Sharecast.com.