(Alliance News) - Atlantic Lithium Ltd has been making progress on its flagship Ewoyaa project in recent months as it seeks to profit from soaring demand for lithium, fuelled by the transition to electric vehicles.
Over the 12 months year, lithium prices have risen significantly as the resource is an essential component of the batteries used in electric cars. Companies around the world have been searching for sources of the new 'white gold' in order to supply the ever-growing demand.
Atlantic Lithium thinks it is well-placed to do so. The Australian mining company recently completed a pre-feasibility study at the Ewoyaa site in Ghana which suggested the project could generate over USD4.84 billion in revenue over a 12 and a half year mine life. Its net present value at a discount rate of 8% was valued at USD1.33 billion.
And those figures, Executive Chair Neil Herbert said in an interview with Alliance News, were based off "quite conservative prices".
In the study, the longer term SC6 price - a pyroxene mineral which is a source of lithium - was assumed to be USD1,359 per tonne. Herbert said the price at the moment, driven by rocketing demand for lithium for electric vehicle batteries, is near USD7,500 per tonne.
Regarding the costs of the project, Herbert said that its capital expenditure is USD125 million while operational expenditure at USD286 a tonne was "industry leading". The combined costs from operational expenditure and capital expenditure was "just about as good as it gets".
He noted that Core Lithium Ltd, which is coming to production now with a similar project in Australia, has a market capitalisation "five or six times" the size of Atlantic Lithium. Herbert said Atlantic Lithium's operational expenditure figures were lower than Core Lithium, which was the best comparative company.
Last Thursday, the company delivered results from the resource and exploration drilling programme, returning "multiple high-grade pegmatite intervals over 1.5% Li2O and over 80 metres long". Results from drilling will continue to filter through over the next year. Herbert said it was "almost dull how consistent it is".
The numbers, Herbert summarised, "are quite insane".
Earlier in the month, the company submitted its mining application to the Ghanian government. While Herbert said that the regulatory steps "are never a formality", the project itself was so straightforward that it was essentially "one-up from quarrying".
The relevant minister was "very keen to receive our mining licence application", Herbert said, while Ghana as an economy is "very keen to diversify from gold" and to participate in the EV sector.
Herbert, who has 16 years experience in growing mining and oil and gas companies, says the project is the "simplest" he has worked on.
Atlantic Lithium has also been trying to burnish its social credentials, claiming on its website that it is "committed to acting responsibly with all stakeholders and delivering long-term benefits within the communities it operates."
Herbert reiterated these aims, saying that the workforce consists "almost entirely (of) Ghanians". He said that the company had engaged with "local communities through local forums" and "very concerned not to impact any of their traditional areas", in particular their hunting areas.
The company expects to receive the mining licence around a year from now and will be able to break ground at the end of next year.
Shares in Atlantic Lithium were trading 10% higher at 34.60 pence in London on Wednesday afternoon. The stock is up 95% over the past twelve months.
By Chris Dorrell; chrisdorrell@alliancenews.com
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