Sunday, May 26, 2024


Dhaka Tribune

Atlantic Lithium (LON: ALL) up 20% on Ghana settlement - if it’s a full settlement

There have been varied allegations here and this announcement might put them to be

Update : 08 Sep 2023, 04:33 PM

Atlantic Lithium (LON: ALL) shares are up 20%. ALL share’s rise is on the back of an agreement with the wealth fund of Ghana.The issuance of new shares, the receipt of the money for them, isn’t really the major issue here. Atlantic, providing it really does have those mining licences, will have no trouble raising whatever capital it needs. No, this is more of a political solution than anything else.

Recall back what was being said about Atlantic Lithium: “Atlantic Lithium (LON: ALL) shares are up 15% but then they've also fallen near 50% in recent days to leave the price down overall. The cause of this is a short selling report from Blue Orca. Their particular interest is not in Atlantic Lithium but in Piedmont Lithium, a major shareholder and hopeful business partner. Piedmont wants the putative output from Atlantic's Ghana lithium mine to feed its processing plant in the US. If the mine doesn't open then Piedmont is both out of luck and some chunk of money. Blue Orca's claim is that the mining licences in Ghana were obtained by the illegal deployment of cash and brown envelope payments. They are therefore unlikely to stand and Atlantic, and therefore Piedmont, are out of luck. Of course, the idea of bribery in West Africa brings to mind Captain Renault, we're all shocked, shocked. “”

We have no view on the truth or not of those allegations. As we’ve also said about ALL: The DFS is here. The surprise, to us, is that ALL shares have fallen upon this publication. Because by the numbers shown Ewoyaa is wildly, hugely, profitable. Yes, we know, we've muttered about how we don't expect the lithium price to hold up and all that. So much supply is to come to market that the price will inevitably revert to long term averages and so on. But the surprise, to us at least, is how conservative Atlantic Lithium is being about that future price. The DFS does show that Eqoyaa will make back its capital quickly (19 months perhaps) and so on.” Assuming that Atlantic is left to get on with mining it they should do very well indeed that is.

Atlantic Lithium

Atlantic Lithium share price from Google Finance

The announcement today: “Atlantic Lithium Limited (AIM: ALL, ASX: A11, OTCQX: ALLIF, "Atlantic Lithium" or the "Company"), the African-focused lithium exploration and development company targeting to deliver Ghana's first lithium mine, is pleased to announce that it has agreed non-binding Heads of Terms with the Minerals Income Investment Fund of Ghana ("MIIF") to invest a total of US$32.9 million (A$51.4m / £26.3m) in the Company and its Ghanaian subsidiaries ("Strategic Investment"). MIIF's proposed investment will support the development of the Company's flagship Ewoyaa Lithium Project ("Ewoyaa" or the "Project") and the broader Cape Coast Lithium Portfolio in Ghana ("Ghana Portfolio") towards production.”

The way we read that is that the money isn’t the important thing. Rather, if Ghana the state is investing then Ghana the state doesn’t have any problems with the licences or how they were granted. So the real value here is the removal of that uncertainty. Or, even if Blue Orca was right, originally, it’s of no matter now.

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