Piedmont Lithium (NASDAQ:PLL) Inc (ASX:PLL, NASDAQ:PLL, XETRA:)’s offtake partner Atlantic Lithium Ltd has revealed a definitive feasibility study (DFS) for the Ewoyaa Lithium Project in Ghana, West Africa, with low capital intensity and expanded annual production.
Piedmont holds a 9.4% interest in Atlantic, with an option to acquire up to a 50% stake in the company’s lithium properties. The deal also includes an offtake agreement covering half of Atlantic’s annual lithium production, on a life-of-mine basis at market prices.
Robust economic metrics
The definitive feasibility study outlines some 3.6 million tonnes of spodumene concentrate production for Ewoyaa, over a 12-year life-of-mine (LoM).
Atlantic describes the project economics as “exceptional”, with a post-tax net present value (NPV8) of US$1.5 billion, free cash flow of US$2.4 billion from LoM revenues of US$6.6 billion, and an average LoM earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$316 million per annum.
The mine’s internal rate of return (IRR) was estimated at 105%, with a short pay-back period of just 19 months.
“The definitive feasibility study has reaffirmed the Ewoyaa Lithium Project’s impressive economic outcomes and profitability potential, providing improved confidence in Ewoyaa’s ability to become a significant, near-term producer of spodumene concentrate,” Atlantic Lithium CEO Keith Muller said.
Expanded annual production
“The increase in capex from the PFS results from the inclusion of the Modular dense media separation (DMS) units and the increased throughput of 2.7 million tonnes per annum,” Muller explained.
“Early revenue generated by the Modular DMS units will reduce peak funding requirement for the mine build, strongly justifying these developments.”
Muller emphasised that this development opens the prospect of enhancing the skills of the local workforce and resolving any issues related to mining, material management or logistics before full-scale operations begin, potentially accelerating the project's start-up phase.
“The deployment of the Modular DMS units has been reallocated from Stage 2 to Stage 1 of the project’s development,” Muller continued.
“Stage 2 includes the evaluation of a Feldspar circuit, a by-product of the DMS process that we intend to supply to the local Ghanaian ceramics market, and a Flotation circuit, further enhancing the project’s economics.”
Overall, the DFS points to a low capital intensity of US$64 per tonne of annualised output and was based on a mineral resource of 35.3 million tonnes at 1.25% lithium, assuming a conservating LoM concentrate pricing of US$1,587/t free on board (FoB) from Ghana Port.