Atlantic Lithium shares gain on Ewoyaa resource upgrade
( ), an Africa-focused lithium explorer, announced an upgrade to the mineral resource estimate (MRE) for its flagship Ewoyaa lithium project in Ghana.
Ewoyaa's MRE has been increased to 35.3Mt at 1.25% Li2O, including 28Mt or 79% in the higher-confidence Measured and Indicated categories. The MRE upgrade was based on a total 137km of drilling, including a 47km resource evaluation and exploration programme completed in 2022.
Specifically, 3.5Mt at 1.37% Li2O was reported in the Measured category and 24.5Mt at 1.25% Li2O in the Indicated category. Atlantic also said a definitive feasibility study (DFS) was progressing well and aimed for release in Q2 2023.
Atlantic reported "significant exploration upside" within Ewoyaa's immediate resource area, with some pegmatites open along strike and at depth and only 15 km2 drilled to date within the broader 560km2 Cape Coast lithium portfolio.
Lennard Kolff, Interim CEO, commented: "The Resource upgrade represents a significant de-risking milestone for the Company, with 79% of the Resource now in the higher confidence Measured and Indicated categories with potential for further exploration growth. This, in addition to the larger overall tonnage, will provide the opportunity to evaluate extended mine life and increased throughput to enhance project economics."
View from Vox
Today's MRE resource upgrade is expected to significantly improve Ewoyaa's economics. The project'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 a 30.1Mt at 1.26% Li2O 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 <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 new MRE reported Measured Resources for the first time and added Indicated Resources converted from the Inferred category, highlighting strong mineralisation continuity favourable for ongoing studies. Together, the higher-confidence Measured and Resources categories constitute 79% of the new MRE, de-risking the project further.
Investors welcomed the MRE upgrade, driving shares 5.2% higher in early trading.
The next step for Ewoyaa is a definitive feasibility study (DFS) targeted for Q2 2023, to evaluate an extended mine life and increased throughout, to further enhance the project's economics.
Ewoyaa has great ESG credentials - a local highly skilled workforce, low power requirements, and strategic location with adjacent power infrastructure, within 1km of a national highway, and 110km of the operating deep-sea port of Takoradi. For ESG minded investors, Atlantic is a company to .
Ewoyaa is funded to production through Atlantic's agreement with Piedmont, and a Mining License application for the project has been submitted. Atlantic summarised its Q4 activities at Ewoyaa in its recently issued trading update.
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.