Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Inc welcomes the awarding of Ghana’s first Mining Lease for lithium covering the Ewoyaa Lithium Project of its partner Atlantic Lithium Ltd (AIM:ALL, OTCQX:ALLIF, ASX:A11).
Ghana’s Ministry of Lands and Natural Resources has granted the lease for Atlantic’s flagship project, which comprises the proposed Ewoyaa Lithium Mine and Processing Plant.
Toward commercial production
This move is in line with Ghana’s new Green Minerals Policy and will enable the advancement of the Ewoyaa project toward commercial production.
It also maintains the project’s position as one of the lowest capital and operating cost hard rock lithium projects globally which has strong commercial viability and profitability potential.
A 2.7 million tonnes per annum steady state operation is proposed for Ewoyaa, producing a total of 3.6 million tonnes of spodumene concentrate or approximately 350,000 tonnes per annum over a 12-year mine life.
Piedmont agreement
On July 1, 2021, Atlantic announced a staged investment agreement with Piedmont Lithium, whereby, through the fast-tracked development of the project, Piedmont will earn up to a 50% interest in the company’s share of its lithium projects in Ghana and 50% of the total spodumene concentrate (SC6) offtake at market rates.
After satisfying the terms set out in Stage 2 of the agreement, Piedmont has exercised its option to acquire an initial 22.5% interest in the Ghana portfolio.
To earn the full 50% interest, as set out in Stage 3, Piedmont has committed to sole fund the first US$70 million, and 50% of any additional development expenditure, towards the total US$185 million development expenditure for the project indicated in the DFS.
About the Mining Lease
Atlantic Lithium and its partners have been granted exclusive rights to carry out mining and commercial production activities over the Mining Lease area for an initial 15-year period, renewable in accordance with Ghanaian legislation.
This is the Mining Lease to be granted for lithium in Ghana, which demonstrates the Government’s strong support in Atlantic Lithium as its ‘partner of choice’ to deliver long-term lithium production and serving as a major landmark in the country’s efforts to reaffirm its status as a leading mining destination and establish itself as a key player in the global decarbonisation drive in Africa.
Strong economics
Ewoyaa is set to become one of the top 10 largest spodumene concentrate producers globally and the payback period of the main processing plant is estimated at just 9.5 months.
C1 cash operating costs of US$377 per tonne have been outlined Free-On-Board (FOB) Ghana Port, after by-product credits with an All in Sustaining Cost (AISC) of US$675/tonne.
Post-tax NPV8 of US$1.3 billion has been estimated with free cash flow of US$2.1 billion from Life of Mine (LOM) revenues of US$6.6 billion.
The US$185 million development cost is to be substantially funded by Piedmont Lithium and planned investment by Ghana’s sovereign wealth fund, the Minerals Income Investment Fund (MIIF).
A competitive offake partnering process is underway to secure project funding for a portion of the remaining 50% available feedstock.
Under the terms of the Mining Lease, Atlantic agrees to list on Ghana Stock Exchange and is provided the opportunity, with incentives offered by the Government as support, to participate in further value addition by undertaking studies to assess the viability of the production of feldspar at Ewoyaa and for downstream conversion in Ghana, offering the potential to significantly enhance shareholder value.
“Auspicious”
Atlantic Lithium executive chairman Neil Herbert said: “As the first to be granted for lithium in the country, the award of the Mining Lease for the Ewoyaa Lithium Project is auspicious for both Ghana and Atlantic Lithium.
"It serves as Ghana’s statement of intent to establish itself as a leading hub in Africa in the EV supply chain through the long-term production of lithium, with Atlantic Lithium as its partner of choice in this objective.
“The Mining Lease is a major endorsement of the viability of the project and a landmark de-risking milestone in its advancement towards production.”