Atlantic Lithium commences auger drilling at Ewoyaa lithium project, details 2023 work programme
( ), an Africa-focused lithium explorer, announced commencement of auger drilling at its flagship Ewoyaa lithium project in Ghana.
The drilling kicks off Atlantic's 2023 exploration and drilling programme at the site and its broader 560 km2 Cape Coast lithium portfolio. The programme entails approximately 20km of auger drilling over a 5-month period to test multiple targets. Auger drilling has now commenced at the Assan target north of the project area, with 4 rigs active to test for pegmatite footprints.
Overview of planned 2023 exploration and resource programmes' targets
Additionally, a passive seismic geophysics survey to test for concealed targets will be carried out, as well as approx. 6.5km of follow-up exploration RC drilling on new targets, dependent on results.
An additional drilling programme is to run concurrently consisting of 3km of infill drilling to convert Inferred resources to the higher confidence Indicated category at Ewoyaa South 2, and 7km of step out extensional drilling along strike, aiming to grow the current MRE.
Atlantic noted that the FEED and definitive feasibility study (DFS) for Ewoyaa were "well progressed".
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Atlantic Ewoyaa lithium project aims to become Ghana's first lithium-producing mine, having secured a US$103m funding via a partnership with US-based Piedmont Lithium. The project, located approximately 100km southwest of the capital Accra, has proven to produce a premium SC6 product suitable for conversion to battery-grade lithium carbonate and hydroxide.
As stated, the 2023 programme's objectives are to test for concealed pegmatites, improve resource confidence, add new targets, and potentially further expand the current MRE. Markets welcomed the update, pushing shares up 4% this morning.
Last month, Atlantic announced a much improved mineral resource estimate (MRE) for Ewoyaa of 35.3Mt at 1.25% Li2O, including 28Mt or 79% in the high-confidence Measured and Indicated categories, building on an already impressive maiden MRE. In today's update, Atlantic expressed confidence that the 2023 work programme will result in further resource upgrades.
Ewoyaa's recently announced pre-feasibility study forecasts significant profitability potential for a 2 Mtpa operation, producing an average of 255,000 tpa of 6% Li2O spodumene concentrate (SC6) over a 12.5-year life of mine (LOM), based on the maiden MRE.
Specifically, the pre-feasibility study delivers LOM revenues exceeding US$4.84bn, a post-tax NPV8 of US$1.33bn, and IRR of 224% over 12.5 years. Capital costs were US$125m with a short payback period of less than 5 months , and average LOM EBITDA was US$248m/year. The study used average annualised US$1,359/dry metric tonne SC6 pricing and US$1,200/dry metric tonne long-term pricing.
The 2023 work programme should not interfere with the delivery of Ewoyaa's definitive feasibility study (DFS), still targeted for release in Q2 2023.
Both the DFS and Front-End Engineering Design (FEED) are "well progressed" according to Atlantic, representing major steps toward mine build. With a pre-feasibility study delivered, a mining license application submitted, FEED contract awarded, and US$103m funding from Piedmont Lithium in place, Atlantic is on track to achieve production in the near term.
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