Piedmont Lithium spreads wings with potential to invest US$102m to gain stake in Ghana projects

With its US lithium project at an advanced stage, Piedmont Lithium (ASX: PLL) is taking a staged stake in London-listed IronRidge Resources (IRR) and its portfolio of lithium projects in the West African state of Ghana.

It has agreed to acquire a stake in IRR itself and also has options to earn into 50% ownership of the project and, importantly, its output.

This fits with Piedmont’s strategy to seek spodumene supply from diverse sources to process to lithium hydroxide to meet the expected battery demand as the electric vehicle revolution proceeds.

Piedmont is also working with Sayona Mining (ASX: SYA) to buy the Quebec-based North American Lithium project and develop a lithium hub in the Canadian province.

If this is a success, Sayona and Piedmont have committed to developing downstream processing capability within five years.

These acquisitions are in addition Piedmont Lithium‘s flagship project in North Carolina where it holds a 100% interest in a planned mine and processing plant targeting the manufacturing of 22,700 tonnes per annum of battery-quality lithium hydroxide in North Carolina to support electric vehicle and battery supply chains in the United States and globally.

Ghana lithium portfolio is ‘impressive’

Piedmont says AIM-listed IRR has an “impressive” portfolio of spodumene projects, anchored by the Ewoyaa project which has a current mineral resource of 14.5 million tonnes at 1.31% lithium oxide — and with “vast” exploration potential.

Piedmont is to acquire a 9.47% of AIM-listed IRR by investing US$15 million ($20 million) and will appoint one director to that company’s board.

It also can invest a further US$17 million to finance ongoing exploration and a definitive feasibility study (DFS) which would give Piedmont a 22.5% project interest.

It can then further extend its project ownership to 50% with an additional US$70 million outlay between 2023 and 2025 by financing construction of Ewoyaa.

This will also mean that Piedmont Lithium will have the right to 50% of lithium output at Ewoyaa.

Ewoyaa is expected to produce an average 295,000 tonnes per annum of spodumene concentrate.

The project is located just 70km from the major port of Takoradi, and a major national highway passes just 1km away from the deposit.

Piedmont says Ewoyaa is expected to have a low environmental impact due to its reliance on solar and hydro-electric generated power.

‘Transformative’ year for Piedmont

Piedmont president and chief executive officer Keith D. Phillips says the current resource at Ewoyaa is currently modest but offers substantial exploration potential.

“We consider IRR’s Ewoyaa project to be among the world’s most promising spodumene projects.”

Mr Phillips describes 2021 as a “transformative” year for Piedmont, significantly expanding its Carolina lithium project and becoming a multi-asset company with interests in Quebec and Ghana.

The company has the funds to “comfortably” finance these transactions as well as the DFS in North Carolina.

“We will now evaluate plans to capitalise on our expanded spodumene resource base to become a larger producer of battery-quality lithium hydroxide that America will require to power the ongoing transition to electric vehicles,” he added.