Atlantic Lithium Limited (AIM:ALL, OTCQX:ALLIF, ASX:A11) said its Ewoyaa lithium project in Ghana, West Africa now has an estimated value of US$1.33bn and will recover its build costs in just five months.
The figures are central to a new pre-feasibility study, managed by Atlantic, that incorporated an upgraded JORC resource of 30.1Mt at 1.26% Li2O announced in March 2022.
Highlights of the PFS in addition to the post-tax NPV of US$1.33bn were free cash flow of US$2bn and life of mine revenues of US$4.84bn.
Maiden ore reserves were calculated at 18.9Mt at 1.24% Li2O and give an initial 12.5-year mine life not allowing for further exploration.
Cash operating costs are US$278 per tonne of SC6 (spodumene) after by-product credits, which will be direct shipping ore fines and feldspar.
Capital costs have risen US$50mln to an estimated US$125mln including an integrated 3-stage crushing facility ahead of the DMS processing facility.
This is a major design change to the scoping study concept of contract crushing, said Atlantic, reducing plant OPEX, improving operational control and reducing lithium losses.
Even with the higher capital spend, the internal rate of return is 224% and payback less than five months, it noted, with average LOM underlying profits [EBITDA] of US$248mln per annum.
Atlantic added it had based the PFS on a long-term average SC6 (lithium in concentrate) price of US$1,359/t FOB over 12.5 years, which is well below the current spot price.
The junior added it would be a conventional open-cut mining operation from the surface with the deep-sea port of Takoradi 110kn away by road.
"First quartile cash costs; low capital and operating costs and low carbon footprint "are due to "outstanding asset processes, logistics and access to infrastructure," it added.
Piedmont Lithium (NASDAQ:PLL) is funding the development and has a 50% earn-in option.
Lennard Kolff, interim CEO, said: "The study outlines a robust 2Mtpa operation which can deliver excellent cash flows, an exceptional 20-week payback and a post-tax NPV8 of 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.
"This PFS moves the project another step closer to becoming Ghana's first lithium-producing mine."