Ghana’s sovereign wealth fund backs Atlantic Lithium and Piedmont’s mine

Atlantic Lithium (ASX: A11) and Piedmont Lithium (ASX: PLL) have welcomed a decision by Ghana’s Minerals Income Investment Fund (MIFF) to invest approximately $51.4 million in support for the development of the Ewoyaa lithium project.

Atlantic’s game changing Ewoyaa project is located just 100km southwest of Ghana’s capital city Accra. The project is on target to become the nation’s first lithium mine.

Under the agreement MIIF will invest $43.6 million in Atlantic’s Ghanaian subsidiaries to acquire a 6% contributing interest in the company’s Ghana portfolio, including the Ewoyaa project.

It will also subscribe for $7.8 million in Atlantic shares, or around 3.05% of the total issued share capital of the company.

Piedmont lifts interest to 22.5%

This is the second major funding injection into Atlantic and its Ghanaian lithium plans in under a month.

In mid-August, Piedmont, already a major stakeholder in Atlantic, increased its interest in the latter to 22.5% as part of a staged investment agreement to earn a 50% equity interest in the Ewoyaa project.

Having funded the completion of the project’s definitive feasibility study (DFS), Piedmont also plans to provide a further $70 million in Ewoyaa development capital to acquire an additional 27.5% interest in the project.

Piedmont sees Ewoyaa as a future supplier of high-purity lithium ore for feedstock for the company’s proposed, 30,000 tonnes per year lithium hydroxide conversion facility in Tennessee, USA.

Ewoyaa receives major endorsement

Atlantic’s executive chairman, Neil Herbert, said MIIF’s strategic investment is a major show of support by an African sovereign wealth fund in Ewoyaa.

“MIIF’s investment, at both the listed company level and via Atlantic Lithium’s Ghanaian subsidiaries, represents a huge endorsement of the company’s work to date and its belief in Atlantic Lithium to establish Ghana as a major producer of spodumene concentrate.”

“We consider Ewoyaa as a Ghanaian project for Ghanaians. Having MIIF as a shareholder not only de-risks the project from a funding perspective but, equally importantly, further aligns the company with the best interests of its Ghanaian stakeholders, who we are proud to represent.”

Mr Herbert added the investment demonstrates the government of Ghana’s conviction in the project and the benefits it can bring.

“In Ewoyaa, Ghana has a new pillar in its diversified minerals offering, further developing its esteemed mining credentials, which date back over a century.”

The new investment will be invested in ongoing development, exploration and study expenditure across Ewoyaa and the company’s broader portfolio.

MIIF offered board positions

Under the strategic investment deal MIIF will be entitled to nominate one person to each of the boards of Atlantic’s Ghanaian subsidiaries and will be able to participate in the near-term competitive process for Ewoyaa’s available off-take.

MIIF’s chief executive officer, Edward Nana Yaw Koranteng, said the sovereign wealth fund’s underlying objective is to support the growth of mining in Ghana, while providing a de-risking option for investors in the country’s mining space.

“The investment in Atlantic Lithium underscores this underlying objective and is indeed a watershed moment as this is our first investment in the lithium space globally. The Ewoyaa project is world class, with huge prospects in the other tenements under Atlantic Lithium.”

“The acquisition of a 6% contributing interest in the company’s Ghanaian subsidiaries will support the funding of ongoing capital and exploration expenditure requirements across Ewoyaa and the broader Atlantic Lithium portfolio.”

“This is just our initial investment in Atlantic Lithium and its Ghanaian subsidiaries. We hope to later invest in the value chain and the development of other by-products, such as feldspar, in line with the government of Ghana’s critical minerals policy.”