Piedmont Lithium Inc (ASX:PLL, NASDAQ:PLL, XETRA:) partner Atlantic Lithium has upgraded the mineral resource estimate (MRE) to 30.1 million tonnes at 1.26% Li2O for the Ewoyaa deposit within the Cape Coast Lithium Portfolio in Ghana, West Africa.
PLL has an earn-in right to a 50% interest in Atlantic’s Ghanaian projects including Eyowaa and an equity interest of approximately 10% in Atlantic.
Atlantic is fully funded and on track to become West Africa's first lithium producing mine.
“We are very pleased with the reported increase in mineral resources for the Eyowaa Project, notably the increase in mineral resource in the indicated category,” PLL chief operating officer Patrick Brindle said.
“The Eyowaa Project is one of the best-located spodumene projects in Africa and its development is fundamental to our growth strategy as an important source of spodumene concentrate for our LHP-2 Project.
“We look forward to Atlantic Lithium’s completion of a pre-feasibility study for the Eyowaa Project, which will both increase the level of engineering definition for the project as well as provide important data needed to advance regulatory approvals for the project.”
The mineral resources update
There were several highlights to Atlantic’s announcement including:
- 42% increase in MRE to 30.1 million tonnes at 1.26% Li2O, reported in accordance with the JORC Code (2012) in indicated and inferred status at the Ewoyaa deposit.
- Total resource grade remains largely unchanged, highlighting its robust geological fundamentals, and includes a 294% increase to 20.5 million tonnes at 1.29% Li2O in the indicated category and 9.6 million tonnes at 1.19% Li2O in the inferred category.
- Mineralisation remains open at depth and along strike with additional untested pegmatites within the immediate deposit area, providing confidence for further resource upgrades.
- The MRE upgrade is based on a total 90,308 metres of reverse circulation (RC) and diamond core (DD) drilling which includes an additional c. 37,500 metres of drilling completed to end December 2021 (including c. 10,750 metres of DD).
- Resource expansion and exploration RC drilling underway with one RC drill rig active on site. Regional exploration auger drilling underway with six rigs active over the portfolio; detailed airborne geophysical survey awarded and soil sampling surveys underway over newly granted Cape Coast licence.
- Significant exploration upside within broader 560 square kilometre Cape Coast lithium portfolio, including historic 1.48 million tonnes at 1.67% Li2O Egyasimanku Hill deposit (non JORC).
- Resource exceptionally well located; adjacent high-power transmission lines, within 1-kilometre of national highway and within 110 kilometres to the operating deep-sea port of Takoradi.
- Resource upgrade expected to significantly improve project economics. Previously announced scoping study update based on 21.3 million tonnes at 1.31% Li2O resource, delivered robust financial outcomes for a 2Mtpa operation, producing an average c. 300,000tpa of 6% Li2O spodumene concentrate (SC6) over a 11.4-year operation:
- Life of Mine (LOM) revenues exceeding US$3.43 billion, Post-tax NPV8 of US$789 million, IRR of 194% over 11.4 years;
- US$70 million capital cost with industry-leading payback period of <1 year;
- C1 cash operating costs of US$249 per tonne of 6% lithium spodumene concentrate Free on Board (FOB) Ghana Port, after by-product credits;
- Pre-tax NPV8 of US$1.23 billion and EBITDA of US$2.02 billion for LOM; and
- Average EBITDA of US$178 million per annum.
9. Significant potential for further resource upgrades to extend the planned LOM; Project metrics substantially improve with a LOM of 15 years and beyond.
"We are delighted to have increased the Ewoyaa Resource by a further 42% to 30.1 million tonnes at 1.26% Li2O and will continue to grow this robust project with ongoing drilling programs," Atlantic Lithium interim CEO Lennard Kolff said.
"Our goal was to increase the resource to support a >12-year mine life and to convert >80% of the previous resource from inferred to indicated status. We have comfortably achieved both goals, demonstrating the robust geological fundamentals of the project.
"With the commencement of additional resource estimation and exploration drilling along strike and at depth, we are confident of further resource upgrades.
"In conjunction with the ongoing drilling, mining studies in support of the pre-feasibility study are well advanced.
"Due to the coarse nature of the spodumene dominant mineralisation, metallurgical test-work to date has consistently delivered high-purity, low contaminants >6% Li2O spodumene concentrate utilising dense medium gravity separation, boding well for low capital, operating and carbon intensities.
"The resource is exceptionally well located, being only 1-kilometre from the sealed national highway and 110 kilometres from the operating deep-sea port of Takoradi with adjacent grid power; it is challenging to find other lithium pegmatite projects better located.
"Delivery of the upgraded 30.14 million tonnes at 1.26% Li2O mineral resource estimate including 20.5 million tonnes at 1.29% Li2O in the indicated category, is an important de-risking milestone for this industry standout project.
"With Ewoyaa being fully funded to production through our agreement with Piedmont Lithium, this upgrade highlights the exceptional potential of the project and the value that it brings to the company."