News: A11 Atlantic Lithium's Ghana mine poised to begin production by 2024, page-205

Well almost. Because the fines represent lithium bearing ore that has broken up sizes smaller than 1mm that won't work with DMS, ideally the lithium percentage is lower rather than higher. The grade with good crushing (now in-house) is ideally at the bottom of the range (1.2%) or even below the bottom of the range as that would represent the lithium units being part of the run of mine crushed ore going into the DMS.

DSO fines at 1.2% would broadly be expected to provide $815/t [$951*(1.2%/1.4%)]. If the lithium crystals break free of the surrounding non-Spod ore cleanly in the crushing process, the DSO fines grade will drop below the head grade. Two examples of this grade difference are:

• Core's Scoping study on DSO fines (July 2021) notes 1.06% and approximately 1.0% grades, while the head grade is 1.4%
• GT1's recent Met work (Dec 2022) notes Flotation feed fines and middlings of 0.6% grade while the head grade is 1.1%

[Note - Core's recent DSO shipping is not the DSO fines scoping study being implemented but run of mine pre-DMS crushed ore]

The link you reference uses current market prices and if they are pumped through the scoping study, the revenue and NPV figures explore. Given the assumption of collapsing Spod prices, the DSO figure used is broadly sensible in that you will not be selling DSO at anything like Core's figure if Spod prices have fallen to $2,300/t in 2025 (as the scoping study assumes). If Spod fall down to a long-run price of $1,200/t assumed from 2030 in the scoping study, a DSO fines of $85/t is only slightly conservative.

Upside for Atlantic
There is obviously a lot of Spod/fines price upside if prices don't collapse.

There may be recovery upside because assuming fines at 1.2-1.5% is relatively conservative. A good crushing operation may get this lower with more spod being DMS feed.

As cash flow starts to come in and it becomes clear Spod prices aren't going back to near $1000 levels I'd expect that Atlantic will look at building a back-end flotation circuit. This will concentrate fines to a spod product in the same way that LTR is using a full flotation circuit to concentrate their ore to SC6. This will also increase SC6 volumes and revenues while keeping transportation costs lower. As the scoping study was based on lower capex (DMS only), fines could only be included as a byproduct. If early phase cash flows are particularly strong (as seems increasingly likely), no DMS fine sales may occur with the material instead stockpiled till the flotation circuit is built and commissioned with funding from operating cash flow.

If the 300kt of DSO fines was 1.35% (mid-point of 1.2-1.5) was also able to be concentrated with 70% recovery to SC6, it could become 47.3kt of SC6.

• 300kt @ $85/t = $25.5m/yr
• 47.3kt @ $2,500/t = $118.3m/yr [$56.8m @ $1,200/yr, and $236.5m @ $5,000/t]