Atlantic reports highest lithium grade from Ewoyaa to date

Atlantic Lithium reported its highest lithium oxide grade to date at the Ewoyaa Project in Ghana on Wednesday, as part of its latest assay results.

The AIM-traded firm said assay results had been reported for 5,668 metres of infill and exploration reverse circulation drilling at the Ewoyaa Main, Grasscutter East, Grasscutter West and Anokyi deposits, as part of the now-completed resource evaluation and exploration reverse circulation and diamond drilling programme.

It said the newly-reported results fell both within and outside the currently-defined 30.1 million tonnes at 1.26% lithium oxide Ewoyaa mineral resource estimate, providing further confidence in resource conversion at the Ewoyaa Main deposit, and extending mineralisation downdip at the Grasscutter East, Grasscutter West and Anokyi deposits.

The highest reported single reverse circulation assay result to date was for 4.52% lithium oxide over one metre in hole GRC0704 from 54 metres, and 3.99% lithium oxide from 53 metres.

Around 21,000 metres of results from the 47,000 metre drilling programme had been reported to date, with the company’s recently-announced pre-feasibility study delivering “exceptional” financial outcomes for a two million tonnes-per-annum operation, producing an average 255,000 tonnes of 6% lithium oxide spodumene concentrate per year, over a 12.5-year operation.

Life-of-mine revenues would exceed $4.84bn, with a post-tax 8% discounted net present value of $1.33bn, and an internal rate of return of 224% over 12.5 years.

The capital cost estimate was $125m, with an industry-leading payback period of less than five months, while C1 cash operating costs were set to be $278 per tonne of 6% lithium spodumene concentrate free-on-board at the Ghana Port, after by-product credits.

Average life-of-mine EBITDA was expected to come in at $248m per annum, with a maiden ore reserve of 18.9 million tonnes at 1.24% lithium oxide.

The firm said it used average annualised pricing of $1,359 per dry metric tonne of lithium oxide spodumene, adding that there was “significant potential” for resource upgrades and exploration upside, and the potential for the project’s metrics to “substantially improve” with increased scale.

“We are delighted to report ongoing high-grade drill intersections, both within the infill programme targeting conversion of indicated to measured resources and within the exploration programme targeting resource growth outside the current mineral resource estimate,” said interim chief executive officer Lennard Kolff.

“The latest infill drilling results from within the current resource at the Ewoyaa Main deposit have returned multiple high-grade pegmatite intervals over 1.5% lithium oxide and up to 95 metres long with the hole ending in mineralisation, providing further confidence in future resource-to-reserve conversion.

“Exploration drilling outside of the current Resource has returned multiple intersections, including highlights of 29 metres at 1.72% lithium oxide and 25 metres at 1.49% at the Anokyi deposit, 45 metres at 1.16% at the Grasscutter West deposit, and 23 metres at 1.18% at the Grasscutter East deposit.”

Kolff said the results reaffirmed the “significant growth potential” at Ewoyaa, which the company hoped to unlock.

“We anticipate further news flow from pending drilling results into the end of the year and are targeting a resource upgrade at the end of 2022 or early 2023, dependent on lab turn-around time.

“The increased resource estimate will inform a definitive feasibility study, targeted for completion in mid-2023.

“With the pre-feasibility Study now delivered, the mining licence application submitted, ongoing positive drilling results and with the support of our funding agreement with Piedmont Lithium, we feel the company is ideally positioned to benefit from the unprecedented levels of lithium demand that are expected over the coming years.”

At 1229 GMT, shares in Atlantic Lithium were up 10.71% at 43.4p.

Reporting by Josh White for Sharecast.com.