September 2022
Pre-Feasibility Study Delivers Robust Project Economics
Ewoyaa Lithium Project, Ghana, West Africa
Post-Tax NPV Increases to US$1.33bn
Internal Rate of Return Increases to 224%
Maiden Ore Reserve of 18.9Mt at 1.24% Li2O Declared
Atlantic Lithium Limited(AIM: ALL, ASX: A11, OTC: ALLIF, "Atlantic Lithium", the "Company" or "ALL"),the funded African-focussed lithium exploration and development companytargeting to deliver Ghana's first lithium mine,is pleasedto announce the completion of the Pre-Feasibility Study ("PFS") on the Ewoyaa Lithium Project ("Ewoyaa", "ELP" or the "Project") in Ghana, West Africa, demonstrating the significant profitability potential of this stand-out project.
Figures and Tables referred to in this release can be viewed in the PDF version available via this link:
http://www.rns-pdf.londonstockexchange.com/rns/2798A_1-2022-9-22.pdf
The PFS was managed directly by the Company, engaging experienced internationally recognised consultants, and incorporates the increased JORC resource of 30.1Mt at 1.26% Li2O, as announced on 24 March 2022.
HIGHLIGHTS:
ØPost-tax NPV8of US$1.33bn with free cash flow of US$2bn from Life of Mine ("LOM") revenues of US$4.84bn.
ØInternal rate of return of 224% and payback less than five months, with average LOM EBITDA of $248 million per annum.
ØMaiden Ore Reserve of 18.9Mt at 1.24% Li2O declared, demonstrating sound resource to reserve conversion.
Ø12.5-year mine life, 2Mtpa conventional dense media separation ("DMS") processing facility with average 255,000tpa 6% lithium spodumene concentrate ("SC6") production.
ØC1 cash operating costs of US$278 per tonne of SC6 Free-On-Board ("FOB") Ghana Port, after by-product credits.
ØIn addition to SC6 production, the PFS incorporates two additional revenue streams from by-products:
o A saleable direct shipping ore fines product ("DSO fines")
o A saleable Feldspar by-product
ØCapital cost estimate of US$125 million, including integrated 3-stage crushing facility ahead of the DMS processing facility; a major design change to the Scoping Study concept of contract crushing, reducing plant OPEX, improving operational control and reducing lithium losses.
ØKey assumptions: Long-term average SC6 price of US$1,359/t FOBover 12.5 years, project funding via Piedmont agreement (refer RNS of 31 August 2021) and cost estimation at +/- 20% level of accuracy.
ØFirst quartile cash costs; low capital and operating costs and low carbon footprint due to outstanding asset processes, logistics and access to infrastructure:
o Conventional open cut mining operation from surface, LOM strip ratio of 8:1
o Simple processing via conventional DMS only, producing a premium SC6 saleable product at a 10mm top size crush
o Simple mineralogy and metallurgy with potential upside for improved DMS recoveries
o Significant exploration upside potential within the 560km2portfolio
o Skilled Ghanaian workforce readily available within the surrounding communities
o Close proximity to excellent logistics and infrastructure - 110km by road from the deep-sea port of Takoradi, adjacent to highway and high voltage powerlines, including hydroelectric sources.
Commenting on the Company's latest progress,Lennard Kolff, Interim Chief Executive Officer of Atlantic Lithium, said:
"We are delighted to release our Pre-Feasibility Study for the Ewoyaa Lithium Project in Ghana, which further illustrates Ewoyaa as an industry-leading lithium asset, generating in excess of US$4.84bn in revenues over a 12.5-year mine life.
"The Study outlines a robust 2Mtpa operation which can deliver excellent cash flows, an exceptional 20-week payback and a post-tax NPV8of US$1.33bn producing a coarse, premium DMS SC6 product including credits from DSO fines and feldspar by-products.
"The study used a long-term average SC6 price of US$1,359/t FOB Ghana, with recent equivalent grade prices as high as US$7,708/t being achieved on Pilbara Minerals Limited BMX platform and representing a mid-range forecast when compared to other commentators.
"Every US$100/t increase in SC6 price forecast results in an additional 9% increase to the post-tax NPV8, highlighting the significant potential value uplift to the Project.
"We are also pleased to declare a maiden Ore Reserve of 18.9Mt at 1.24% Li2O, presenting sound resource to reserve conversion and confirming the robust project fundamentals.
"Operating costs of US$278/t SC6, which include a discount of US$165/t for by-products, further demonstrate the attractive fundamentals of the Project. Ewoyaa benefits from simple mineralogy, low power and water consumption, a DMS-only process flow-sheet design, skilled workforce and proximity to operational infrastructure, including grid power, sealed road and deep-sea port. These fundamentals are arguably among the best in the world and enable a low carbon footprint project.
"CAPEX has increased from US$70 million to US$125 million in the PFS, primarily due to bringing the crushing circuit in-house as opposed to contract crushing. Additionally, the increased resource footprint resulted in increased costs, including the extended high-voltage power line re-alignment and inflationary cost pressures in line with the current market. The financial model, however, shows that the Project is currently not sensitive to inflationary and capital cost increases.
"Against the backdrop of buoyant global lithium demand, driven particularly by electric vehicle demand, we believe Ewoyaa will play a significant role in the role of sustainable lithium production. This PFS moves the Project another step closer to becoming Ghana's first lithium-producing mine.
"Supported by our funding agreement with Piedmont Lithium Inc., we are excited to continue advancing the Ewoyaa Lithium Project through the next stages of studies and permitting towards production. The resource infill and extensional drilling programme underway is nearing completion and we look forward to sharing updates on this and further Project developments shortly."
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.
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