Atlantic Lithium responds to 'false and misleading' short-seller's report

Atlantic Lithium responded to what it called a “false and misleading report” from Blue Orca Capital on Thursday, regarding its partner Piedmont Lithium.

The AIM-traded lithium exploration and development company, targeting to deliver Ghana's first lithium mine, refuted the allegations made by the report, adding that it held valid prospecting licences with operating permits for all of its current activities.

Atlantic Lithium's Ewoyaa lithium project sits within the Mankessim licence, owned by Barari DV Ghana, which is 90%-owned by the company, and the Mankessim South licence, owned by Green Metals Resources, which is 100%-owned by the company.

The firm lodged applications for a mining licence for the Ewoyaa project with Ghana's Minerals Commission, which excludes the Joy Transporters licences.

Atlantic Lithium said it entered into conditional and binding terms with Joy Transporters on 17 January 2018, which held exclusive rights to the Saltpond and Cape Coast prospecting licences.

The consideration for the purchase of 100% of the ownership of Joy Transporters, announced on 12 March 2020, was the issue of 2,360,035 shares in the company valued at approximately £0.28m at the time.

Completion of the acquisition was subject to regulatory and ministerial approvals, which were received, and announced by the company on 4 February 2021.

The company said the Joy Transporters licences currently contain no defined resources, and form part of its wider exploration portfolio in Ghana.

It said the licences were excluded from its mining licence application for the Ewoyaa lithium project, and no revenue was expected from them.

The selling party retained its net smelter return of 2.5%, of which 50% could be acquired by the company for $3m, although no royalty would be payable.

Atlantic Lithium said it believed that the Minerals Commission would grant the mining licence for the Ewoyaa project, and Ghana's parliament would ratify the licence in due course.

It described Ghana as an established mining jurisdiction with a “robust” mining framework, adding that it had a “zero-tolerance policy” on bribery and corruption.

“All allegations in the report have been taken seriously by the company and are ungrounded - the company will seek legal advice to address the claims made by the report,” the board said in its statement,

“The report is clearly intended to benefit Blue Orca Capital, which, in the report itself, has disclosed that it is short selling and stands to profit in the event that the stock price of Piedmont Lithium declines.

“Atlantic Lithium cautions investors not to make decisions based on the report, which it considers factually untrue.”

At 1312 GMT, shares in Atlantic Lithium were up 28.54% at 29.05p.

Reporting by Josh White for Sharecast.com.