Targeting to deliver Ghana’s first lithium mine, Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Ltd’s investee Atlantic Lithium has agreed to a non-binding head of terms with the minerals income investment fund of Ghana (MIIF) to invest a total of US$32.9 million (AU$54.1M) in the company and its Ghanaian subsidiaries.
MIIF’s proposed investment will support the development of the company’s flagship Ewoyaa Lithium Project and the broader Cape Coast Lithium Portfolio in Ghana towards production.
As part of the agreement, MIIF will invest US$27.9 million in the company’s Ghanaian subsidiaries to acquire a 6% contributing interest in the company’s Ghana Portfolio, inclusive of the Ewoyaa Lithium Project.
The Strategic Investment highlights the desirability of the Ewoyaa Lithium Project, de-risks the success of the project and sees MIIF contribute towards the development expenditure for the Project.
Furthermore, this investment serves as a major endorsement from an African sovereign wealth fund and highlights Ghana as a promising mining jurisdiction and a pioneer in the decarbonisation theme.
Leading mining investment jurisdiction
Atlantic executive chairman Neil Herbert said: “At this important stage in the Project’s development, as we advance towards first production, we are delighted that the Minerals Income Investment Fund of Ghana has agreed to invest US$32.9 million in the company to support Atlantic Lithium’s flagship Ewoyaa Lithium Project and broader lithium portfolio in Ghana.
“We strongly welcome MIIF’s ongoing support as a key shareholder.
“MIIF’s investment, at both the listed company level and via Atlantic Lithium’s Ghanaian subsidiaries, represents a huge endorsement of the company’s work to date and its belief in Atlantic Lithium to establish Ghana as a major producer of spodumene concentrate.
“We consider Ewoyaa as a Ghanaian project for Ghanaians.
“Having MIIF as a shareholder not only de-risks the Project from a funding perspective but, equally importantly, further aligns the company with the best interests of its Ghanaian stakeholders, whom we are proud to represent.
“Furthermore, an investment by Ghana’s sovereign wealth fund demonstrates the Government of Ghana’s conviction in the Project, showcasing its intent to support the critical minerals agenda and position the country as a leading mining investment jurisdiction in Africa.”
Investment summary
MIIF has agreed to subscribe for 19,245,574 Atlantic shares at a price of US$0.2598 per share, for a value of US$5 million, to be held in escrow, equating to 3.05% of the total issued share capital of the company.
Under the non-binding terms of the strategic investment:
- MIIF will be entitled to nominate one person to each of the boards of the company’s Ghanaian subsidiaries;
- invited to participate in the near-term competitive process for Ewoyaa’s available off-take; and
- granted one warrant for every two Atlantic shares subscribed for under the subscription at a 40% premium to the subscription price.
MIIF’s Strategic Investment further aligns the company and its spodumene concentrate production ambitions at Ewoyaa and its Ghana portfolio with its Ghanaian shareholders.
Herbert added: “In Ewoyaa, Ghana has a new pillar in its diversified minerals offering, further developing its esteemed mining credentials, which date back over a century.
“MIIF’s investment in the company’s Ghanaian subsidiaries will be used towards ongoing development, exploration and study expenditure across Ewoyaa and the company’s broader portfolio.
“MIIF’s contributions will significantly derisk the success of the Project. In this way, we feel MIIF will share ownership in Ghana’s efforts to drive the country’s position in the global EV supply chain.”