With no end in sight regarding the Russia-Ukraine war, at least for the interim, the Lithium market is benefitting from rising prices due to supply disruptions, and these existing shortages are likely to remain elevated, benefiting Lithium producers more broadly and Atlantic Lithium, specifically, for the next decade.
Currently, trade tensions emanating from the Russia-Ukraine conflict and tightened Covid-19 restrictions in China is disrupting the supply of key metals (lithium) for low-carbon technologies. Due to these uncertainties, end-users such as the automobile industry that is transitioning to electric vehicles (EVs) will be affected, “but higher metals pricing will benefit mining companies’ performance,” according to Fitch Ratings.
Aside this development, Piedmont Lithium’s CEO Keith D. Phillips, said: “It’s really tremendous. I think a lot of us in the industry thought we would have a very strong market for a decade or so to come. I don’t think we expected it to happen so fast. Prices are up 10 times in about 18 months which is staggering.“
“Fundamentally, we have tremendous shortages of lithium chemicals that the battery and car companies need to produce all the electric cars they want to produce. These shortages are likely to last for years and years. I think well into the 2030s.”
Keith D. Phillips
Recently, Atlantic Lithium announced that investors were scrambling to acquire 100 per cent or part of the company’s assets; an action that jolted the share price of the company higher, indicating upside economics of the company’s exploration activities at the Ewoyaa project in Ghana.
With a life of mine (LOM) of approximately 11.4 years, prolonged shortage of Lithium until 2030, reflects sustained higher prices of lithium, offering potentially huge promise for the business of lithium production. This is likely to partly explain the growing requests over the past few months for the acquisition of its assets.
Ewoyaa Project Offers Untapped Potential
To date, approximately 28 square kilometres (sq km) has been auger drill tested, with only 13sq km drill tested within Atlantic’s broader 560sq km portfolio in Ghana, demonstrating that the Ewoyaa project offers vast untapped value potential.
Atlantic Lithium upped its exploration and evaluation expenditure to A$13.1 million in the second half of 2021, making a total for the year of A$15.9 million and reflecting exploration programmes across all its projects in Ghana. Cash in hand was A$23.3 million at the end of December 2021 with losses for the 12 months rising to A$13.2 million from as low as A$1.4 million.
Recently, the lithium miner announced a significant upgrade in the mineral resource estimate at the Ewoyaa project to 30.1Mt at 1.26 per cent Li2O for the Ewoyaa lithium deposit, representing an increase of 42 per cent.
In line with reaching the goal of 12 years of mine life, Atlantic Lithium recently announced the commencement of drilling rounds for 2022, having identified six new target areas for RC drilling testing; all within 3.5km of the current 21.3MT @1.31% Li2O resource footprint. Mineralisation has also been extended within the current mineral resource estimate (MRE).
Together with Piedmont Lithium, which has partial interest (10 per cent) in Atlantic Lithium, the company seeks to be the largest producer of lithium in the West Africa region, a feat that is expected to reflect greater benefits as the world transitions to clean energy.
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