Piedmont Lithium and Atlantic Lithium announce positive PFS for Ewoyaa project

Global lithium developer Piedmont Lithium (ASX: PLL) has announced its project partner and investee, Atlantic Lithium (ASX: A11), has completed a prefeasibility study (PFS) for the Ewoyaa project in Ghana.

The PFS demonstrates a production target of approximately 255,000 tonnes per year of 6% lithium spodumene concentrate over a 12.5-year mine life from ore reserves of 18.9 million tonnes at 1.24% lithium oxide.

Estimated capital costs for the project increased from US$70 million (A$109 million) to US$125 million (A$195 million), which Atlantic interim chief executive officer Lennard Kolff said was primarily due to bringing the crushing circuit in-house – for improved operational control and reduced lithium losses – rather than contract crushing.

“Additionally, the increased resource footprint resulted in increased costs, including the extended high-voltage powerline realignment and inflationary cost pressures in line with the current market,” he added, noting the financial model shows the project is “currently not sensitive” to inflationary and capital cost increases.

On the contrary, operating expenditures are expected to decrease at the planned production plant.

Piedmont is earning a 50% stake in the project through a deal struck in 2021 (when Atlantic was formerly known as IronRidge Resources) that includes an offtake agreement for half of the annual production at market prices on a life-of-mine basis.

The company also owns a 9.4% equity interest in Atlantic.

Ewoyaa expected to be Ghana’s first lithium-producing mine

The PFS moves the Ewoyaa project another step closer to becoming Ghana’s first lithium-producing mine.

“Against the backdrop of buoyant global lithium demand, driven particularly by electric vehicle demand, we believe Ewoyaa will play a significant role in sustainable lithium production,” Mr Kolff said.

Piedmont executive vice president and chief operating officer Patrick Brindle said the combination of “robust economics and commitment to best practices” has strengthened the project’s position as an industry-leading asset.

“We expect the project in Ghana to play a critical role in our ability to ramp-up production of lithium hydroxide in the United States. This proposed operation is underpinned by high-grade mineral resources, critical infrastructure, access to a deep-water port, and available labour.”

“The study also highlights Atlantic Lithium’s plans related to community engagement and environmental stewardship,” Mr Brindle added.

Next stages

With the completion of the PFS, the Ewoyaa project will now advance to the next stage of studies and permitting.

A resource infill and extensional drilling program is nearing completion and Atlantic is working to submit a mining licence application and scoping-level environmental and social impact assessment report to the Ghanaian government.

Atlantic is working toward a targeted first production of spodumene concentrate in the third quarter of 2024, subject to receipt of a mining licence within the 2023 third quarter and the project meeting all other statutory requirements.

When Ewoyaa is operational, Piedmont plans to import spodumene concentrate from the project to supply the company’s newly-announced Tennessee lithium project in the US for conversion to lithium hydroxide.

Ewoyaa is located near Ghana’s deep-water port of Takoradi, which provides the benefit of simple transport logistics for bringing the material to Piedmont’s Tennessee plant.