Atlantic Lithium reports positive progress through December

Atlantic Lithium said in an update on Wednesday that the pre-feasibility study (PFS) on its Ewoyaa lithium project had demonstrated significant profitability potential, with life-of-mine revenues exceeding $4.84bn.

The AIM-traded firm also noted a post-tax 8%-discounted net present value of $1.33bn, and an internal rate of return of 224% over 12.5 years.

With a capital cost of $125m and an “industry-leading” payback period of less than five months, the board said the project had a declared maiden ore reserve of 18.9 million tonnes at 1.24% lithium oxide, demonstrating “sound” resources-to-reserve conversion.

The two million tonnes-per-annum conventional dense media separation processing facility, with average 255,000 tonnes-per-annum 6% lithium spodumene concentrate production, would have a 12.5-year mine life, it added.

Atlantic Lithium said it had lodged a mining licence application for the extraction of minerals from the proposed Ewoyaa mine, and awarded the processing plant front-end engineering design contract to Primero Group.

Additionally, the company had completed a 47,000-metre resource infill and extensional reverse circulation and diamond core drilling programme, with the highest-grade assay result of 6.78% lithium oxide over a one-metre interval in drilling at the Ewoyaa Main 'starter pit’.

Keith Muller had been appointed as chief operating officer, and the company had been admitted to trading on the official list of Sydney’s ASX.

Looking at its finances, Atlantic Lithium reported a strong cash position of AUD 19.1m (£10.5m) as at 31 December, down from AUD 23.3m a year earlier.

Exploration and evaluation expenditure held on the balance sheet for the period through December totalled AUD 12.7m, net of Piedmont Lithium’s contributions.

Since the period ended, Atlantic Lithium said there was a “significant” mineral resource estimate upgrade at Ewoyaa, to 35.3 million tonnes at 1.25% lithium oxide, including 28 million tonnes, or 79%, in the measured and indicated categories, which was expected to significantly improve the project’s economics.

Final assay results had been received for a further 10,052 metres of exploration and infill diamond core and reverse circulation drilling, recently completed at Ewoyaa.

“Looking ahead, in the coming months, we hope to receive the grant of the mining licence application that was lodged post-period end, before we commence the EPA process,” said chairperson Neil Herbert.

“The definitive feasibility study is on track for release in the second quarter, and is progressing well.”

Herbert said that, incorporating the increased mineral resource estimate announced post period-end, the study would evaluate an extended mine life and increased throughput to enhance the project's economics.

“Further to the news flow regarding the permitting process, we also continue to explore our licences in Ghana within and outside of the current resource base and we look forward to sharing updates to this regard in due course.”

At 1336 GMT, shares in Atlantic Lithium were up 2.56% at 26p.

Reporting by Josh White for Sharecast.com.