Expanding Ewoyaa's potential
Atlantic Lithium recently published a series of assay results from drilling that lies outside the mineral resource estimate for the Ewoyaa Lithium Project, in Ghana, West Africa.
These results are likely to further expand the size of the resource base at Ewoyaa beyond the current JORC 2012-compliant mineral resource estimate of 30.1mln tonnes (mt) at an average grade of 1.26% Li2O.
While we are expecting the upcoming pre-feasibility study (PFS) to be based on the current mineral resource estimate of 30.1mt, these recent drill results demonstrate that Ewoyaa is likely to be a much bigger deposit than will be defined in the PFS.
We would anticipate further resource upgrades at Ewoyaa post the PFS, as the company begins work on the definitive feasibility study (DFS) for the project.
The PFS remains on target for completion in Q3 2022. The PFS is expected to be based on a resource base that is around 30% larger than the one used for the December 2021 scoping study (SS).
The SS returned a post-tax NPV8 of US$789mln and a post-tax IRR of 194%, and we would anticipate an extension to the mine life, or processing capacity of the plant, resulting in a significant improvement to the project's economics in the SS, as a result of the larger resource base.
The SS was also completed using a spodumene concentrate (SC6) price of US$900/t, this appears to be conservative when compared to August sales prices, which have been as high as US$7,012/t. A higher SC6 price in the PFS would result in a significant improvement to the project's economics.
However, there are still plenty more drill results to come from Atlantic Lithium with around 27,000 meters of the planned 37,000 meters of resource evaluation and exploration drilling programme completed and assay results reported from only 11,460 meters.
Drilling is expected to be completed in Q3 2022.
Another potential value uplift event is expected to occur in Q3 2022 when the Company completes its listing on the Australian Securities Exchange (ASX).
This listing is expected to provide additional liquidity, allowing Australian investors, that have a familiarity with the lithium spaces and the value of lithium equities, to easily trade Atlantic's shares.
Importantly, Atlantic Lithium is different to other lithium development plays in that the Ewoyaa Spodumene Project is funded to production through the Company's agreement with Piedmont Lithium.
In addition to this, the Company retains the sales rights to around 50% of its spodumene concentrate product, allowing it to benefit from higher lithium prices, or lock in additional offtakes to provide novel value additions.
The other 50% of its spodumene concentrate product is committed through an off-take to Piedmont Lithium which is uncapped and at market rates.
Atlantic lithium has already reported the results of 11,460 meters of drilling at the Ewoyaa Main Deposit and the Grasscutter North Target over the summer and an additional 25,540 meters is expected to be announced before the end of the year (Figure 1).
Figure 1 - Resource Base and Exploration Results at Ewoyaa
Source: Atlantic Lithium
Figure 2 - Cross Section EWM_25a Ewoyaa Main
Source: Atlantic Lithium
Figure 3 - Cross Section EWM_26 Ewoyaa Main
Source: Atlantic Lithium
Figure 4 - Cross Section EWM_27 Ewoyaa Main
Source: Atlantic Lithium
Figure 5 - Cross Section EWM_27 Grasscutter
Source: Atlantic Lithium
Ewoyaa Main Deposit
At the Ewoyaa Main Deposit, high-grade results from outside the current resource estimate include:
- 69 meters at a grade of 1.34% Li2O from a depth of 129 meters (GRC0667)
- 67 meters at a grade of 1.2% Li2O from a depth of 112 meters (GRC0666)
- 59 meters at a grade of 1.07% Li2O from a depth of 125 meters (GRC0670)
- 59 meters at a grade of 0.95% Li2O from a depth of 113 meters (GRC0669)
- 46 meters at a grade of 1.21% Li2O from a depth of 115 meters (GRC0665)
- 43 meters at a grade of 1.08% Li2O from a depth of 126 meters (GRC0668)
- 31 meters at a grade of 1.43% Li2O from a depth of 179 meters (GRC0672)
*mineralisation open at depth; further assays pending
These results have extended spodumene mineralisation a further 75 meters down-dip at the Ewoyaa Main Deposit (Figures 2, 3 and 4), highlighting the potential for additional resource to be defined.
Grasscutter North Target
The Grasscutter North Target, lies outside the current mineral resource estimate and all drill results are adding mineralisation that could expand the resource base (Figure 5). Results to date include:
- 22 meters at a grade of 1.25% Li2O from a depth of 104 meters (GRC0647)
- 15 meters at a grade of 1.35% Li2O from a depth of 71 meters (GRC0646)
- 13 meters at a grade of1.26% Li2O from a depth of 185 meters (GRC0642)
- 9 meters at a grade of1.24% Li2O from a depth of 131 meters (GRC0636)
- 9 meters at a grade of 1.09% Li2O from a depth of 182 meters (GRC0649)
- 9 meters at a grade of0.68% Li2O from a depth of 157 meters (GRC0655)
- 7 meters at a grade of 1.16% Li2O from a depth of 129 meters (GRC0653)
- 4 meters at a grade of1.12% Li2O from a depth of 96 meters (GRC0654)