Recent ASX lister Atlantic Lithium (ASX:A11), a company seeking to develop the African country of Ghana’s first lithium mine, is set to only enhance the bankability of its local Ewoyaa Project with a raft of new lithium spodumene hits discovered outside the known mineral resources deposit boundaries.
The drill results come from the Ewoyaa Main and Ewoyaa North-East targets respectively, and the Kaampakrom and Grasscutter West target.
Some new drilling results confirmed today fall outside the boundaries of the area on-site that formed the original JORC-compliant mineral resource, giving the company confidence it can grow the size of the project.
Worth noting is that low-grade mineralisation at the northern end of the Kaampakrom deposit, spodumene mineralisation has been detected starting at surface.
But first, a recap on spodumene.
Spodumene is a mineral formed naturally that is coincident with lithium mineralisation; spodumene itself is chemically recognised as lithium aluminium inosilicate.
For this reason (and spodumene being easier to process downstream than other forms of host mineralisation such as lepidolite,) the price of spodumene tends rise whenever end-product lithium prices rise.
Atlantic’s Ewoyaa project is a lithium spodumene play.
Let’s get onto grades.
Atlantic Lithium reports the following results below.
Worth considering is that most hard-rock lithium operations (as opposed to brine mining projects) often classify high-grade lithium as that in concentrations between 1.5% and 2% and above; and projects with concentrations around 4% or higher often attract strong interest.
Compare that to the following assays reported by Atlantic today:
63.3m @ 1.86% lithium from 14.3m depth
68m @ 1.37% lithium from 15.0m depth
24m @ 1.72% lithium from 38.6m depth
20m @ 1.85% lithium from 72m depth
13m @ 1.91% lithium from 117m depth
14m @ 1.89% lithium from 140m depth
“We have reported approximately 37,000m of the 47,000m programme to date, with 10,000m of assays pending,” company chief Lennard Kolff said.
“This latest batch of results has delivered multiple drill intersections outside the resource footprint…with the Pre-Feasibility Study (PFS) now delivered…ongoing positive drilling results and with the support of our funding agreement with Piedmont Lithium, we feel the Company is ideally positioned.”
A mining licence application has been submitted by the company to the Ghanian government.
That PFS outlined the following key points for the economics of the Ewoyaa project, as below:
Life of Mine (LOM) revenue over US$4.84bn
Rate of return 224% over 12.5 years
Opex of US$278/tonne of 6% lithium spodumene shipped free on board
Expected earnings of US$248mn each year
Investors are liking what Atlantic has to offer: since listing in late September 2022, the company’s year to date performance sits up 37%.
The company has a market cap of $481m and is ranked ‘buy’ by at least 10 different brokers.
Africa is Africa, however, and the mining application permit could become a protracted issue depending on the kind of local relationships Atlantic has.
Ghana's key mining legislation is the Minerals and Mining Act of 2006; that legislation requires foreign mine owners to register a company in Ghana and to pay royalties.
Legalstone Solicitors estimate gold mining makes up nearly half of Ghana's country revenue; and Atlantic is now adopting a novel approach in establishing a lithium mine in Ghana.
Mines must be approved by the Forestry Commission and the Ghanian EPA. Foreign owners of mines must also agree to invest at least US$10m in operations; full ownership can be acquired by paying US$0.50m, according to Legalstone.
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