Atlantic Lithium and Piedmont report ‘impressive’ economic returns from Ewoyaa project DFS

A definitive feasibility study for the Ewoyaa lithium project in West Africa has confirmed its economic viability, low capital intensity and “exceptional” profitability potential for joint venture partners Atlantic Lithium (ASX: A11) and Piedmont Lithium (ASX: PLL).

The study was based on a mineral resource estimate of 35.3 million tonnes grading 1.25% lithium oxide and a conservative life of mine (LOM) concentrate pricing of US$1587 per tonne, free on board from Ghana Port.

It highlighted a spodumene concentrate production of 3.6 million tonnes over a 12-year life of mine at a modest capital cost estimate of US$185 million.

Plant throughput increased by 35% following a significant uplift in ore reserves to 25.6Mt grading 1.22% lithium oxide.

Post-tax net present value was reported to be US$1.5 billion with free cash flow of US$2.4 billion from life of mine (LOM) revenues totalling US$6.6 billion.

Average LOM earnings before interest taxation depreciation and amortisation (EBITDA) hit US$316 million per year while the internal rate of return was 105% with a short payback of 19 months.

Dense media separation

The DFS incorporated modular dense media separation (DMS) units to generate early cash flow and increase throughput from 2 million tonnes per annum to 2.7Mtpa.

The cash flow is expected to reduce the peak funding requirement while the capital expenditure will be paid back prior to full completion of plant build.

An additional 4.7Mt of secondary ore will be generated as by-product from the DMS concentrator, with an average grade of 1.16% lithium oxide.

The DFS is expected to maintain a low capital intensity of US$64 per tonne of annualised throughput.

Near-term producer

Atlantic chief executive officer Keith Muller said the “impressive” economic outcomes offered improved confidence in Ewoyaa’s ability to become a significant, near-term producer of spodumene concentrate.

“The DFS indicates a payback within only 19 months and maintains a low capital intensity, which further reinforces Ewoyaa’s position among the leading pre-production hard rock lithium assets globally,” he said.

“As we set our sights on first production, we firmly believe that Ewoyaa will deliver long-lasting benefits for the Central Region, to Ghana and to West Africa.”

Open cut mining

The Ewoyaa development involves open cut mining of several lithium-bearing pegmatite deposits, conventional DMS processing, and supporting infrastructure to target the production of spodumene concentrate and secondary ores by mid-2025.

Over the first nine months of operation, Atlantic plans to feed approximately 450,000 tonnes of ore through an early processing plant fed from the Ewoyaa South 2 pit, prior to sending it through the main 2.7Mtpa processing facility.

The main facility will process ore from 2026 for the remaining 11 years.

Over the LOM, Ewoyaa is estimated to produce 3.58Mt of 6% (SC6) and 5.5% (SC5.5) grade spodumene concentrate, as well as 4.7Mt of secondary product, which are saleable given current and forecast lithium demand projections.

Piedmont stake

Piedmont is earning a 50% stake in the Ewoyaa project through a staged deal struck in 2021, before Atlantic changed its name from IronRidge Resources.

The deal includes an offtake agreement for half of the project’s annual production at market prices on a LOM basis.

Piedmont also owns a 9.4% equity interest in Atlantic.