Atlantic Lithium* (LON:ALL) 49p, Mkt Cap £283m – Ewoyaa project set to expand as visible spodumene is observed in new drilling

FLASH NOTE PDF

  • Atlantic Lithium report the visual identification of spodumene in new drilling at the Ewoyaa Lithium Project in Ghana.
  • The new discovery offers potential to significantly expand the resource with spodumene seen over 80m in multiple drill holes indicating a widening of the spodumene at depth.
  • Spodumene is a particularly easy mineral to identify in drill cores though judging its grade probably best left to the assay labs.
  • Drilling was completed below previously reported high-grade intervals:
    • GRC0425: 75m at 1.17% Li2O from 68m in,
    • GRC0426: 64m at 1.28% Li2O from 74m
    • GRC0428: 66m @ 1.26% Li2O from 41m
  • Ewoyaa currently has a 30.1mt mineral resource grading 1.26% Li2O making Ewoyaa one of the world’s better grade lithium resources.
  • PFS ‘Pre-Feasibility Study’ due in Q3 2022 to upgrade the current Scoping Study despite delays in receiving assay results from labs.
  • The project is located on the coast and is relatively close to port infrastructure for shipping concentrates to China for processing.
  • Atlantic have mobilised a further three drill rigs following the new discovery to supplement the single rig currently working on site
  • Two new RC rigs have just arrived with a diamond drilling rig due next week.
  • 52 drill holes have been completed to date for 9,166m with a number of assays pending.
  • The drill program has been expanded to ~37,000m from 19,000m including some infill and geotechnical drilling alongside the extension of the current resource.
  • One of the rigs will also test the depth of a number of new targets which have been defined in auger drilling within the Ewoyaa pegmatite corridor, to the north and south of the current MRE.
  • Infill drilling will also upgrade the inferred to measured and indicated resources for the first 1.5 years of planned mine production.
  • Geotechnical drilling will test the ground conditions for pit wall planning and detailed engineering design.
  • Regional exploration auger drilling is ongoing over Mankessim and Saltpond licenses with just 28sqkm2 tested and 13km2 drilled, within their 560km2 lithium portfolio in Ghana.
  • Increasing the scale of the Ewoyaa lithium project offers the potential for a significant increase in the proposed production rate or for a second stage expansion. Both options should be highly value accretive in a market which is significantly short of spodumene and lithium supply.
  • See press release for maps, cross sections and picture of RC chippings containing visible spodumene. http://www.rns-pdf.londonstockexchange.com/rns/8518M_1-2022-5-26.pdf
  • Management have picked up the pace of development at Ewoyaa highlighting the strength of the team put in place by the late Vince Mascolo. While the sudden passing of ceo was a shocking and tragic event, we feel sure Vince would be proud to see the acceleration of his good work.
  • Alternative lithium supply: We have been examining the potential for new production from DLE ‘Direct Lithium Extraction’ from lithium rich brines in the Atacama in Chile and in Argentina.
  • So far DLE only appears to work commercially after lithium-bearing brines have been concentrated through evaporation ponds and in specific chemical conditions.
  • Extraction of brines from aquifers is an increasing issue in Chile with regulations tightening permission to extract brines along with new indigenous opposition and environmentalists highlighting declining numbers of pink flamingos. We note; Chilean flamingos have a special gland behind the eyes which enables the processing and absorption of near boiling spring water and salt water.
  • Rio Tinto recently acquired Rincon which has a DLE process in testing in Salta Argentina, though we would not be surprised to see some form of pre-concentration applied to the brines to get this to work.
  • Geothermal lithium brines appear to offer potential for DLE extraction as energy from the hot fluids can be used as part of the process assuming the brines flow as intended.
  • We conclude that the world is a long way off the holy grail of commercial DLE lithium extraction which presents significant challenges and Li-ion battery materials processors will continue to rely on spodumene as a primary feedstock for lithium for many more years to come.

Conclusion: Ewoyaa continues to stand out as one of the world’s best hard-rock lithium discoveries in recent years. News today on its further expansion offers potential for a significant increase in production and value going forward.

*SP Angel acts as nomad to Atlantic Lithium. An SP Angel mining analyst recently visited the Ewoyaa Lithium Project in Ghana

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