Atlantic Lithium: A$7million equity placing to contribute to funding Ewoyaa project

Atlantic Lithium Limited has announce the launch of an institutional placement (“Equity Placing”) of new fully paid ordinary shares of no par value each in the Company (“New Shares”) at an offer price of A$0.44 (equivalent to 23.35 pence) per new share (“Issue Price”).

Highlights of the Equity Placing

 The Equity Placing will be undertaken by an institutional placement of New Shares to raise approximately A$7.0 million (£3.7 million), utilising the Company’s existing share authorities, launching today.

As part of the Equity Placing, the Company reserves the ability to accept oversubscriptions for up to A$2.0 million (£1.0 million).

Proceeds from the Equity Placing will be used to contribute to the funding of the Company’s flagship Ewoyaa Lithium Project in Ghana (the “Project”) and provide additional working capital for the Company.

–       The Equity Placing will be undertaken at a fixed issue price of A$0.44 (equivalent to 23.35 pence) per New Share, which, as at the last trading day of 14 December 2023 on the ASX, represents a:

o  10.2% discount to the last closing price of A$0.490; and

o  11.9% discount to the 5-day volume weight average price of A$0.499.

–       Canaccord Genuity (Australia) Limited has been appointed as Lead Manager (“Lead Manager”) in connection with the Equity Placing. Wilsons Advisory & Stockbroking is acting as Co-Manager (“Co-Manager”).

Proposed Use of Proceeds

–       Mining Lease requirements

o  Expenditure associated with the Feldspar Definitive Feasibility Study;

o  Downstream Conversion Study to determine viability of downstream lithium conversion in Ghana and related factors required;

o  Listing by introduction on the Ghana Stock Exchange.

–       Project Expenditure

 EPA permitting process, land acquisition, relocation of powerline and engineering works;

 Atlantic Lithium’s share of the Project’s overall development expenditure is approximately US$38 million, which is expected to be fully funded through (i) this Equity Placing (once completed), (ii) the completion of the agreed, non-binding investment in the Company from the Minerals Income Investment Fund of Ghana (“MIIF”) and (iii) the ongoing off-take financing process, due to complete in Q1 2024.

–       Exploration

o  Additional extensional drilling announced over and above the ongoing 2023 drilling programme.

–       Working capital

Working capital to ramp up the operational readiness team, relevant production processes and systems and associated costs.

Commenting, Neil Herbert, Executive Chairman of Atlantic Lithium, said:

“Under Ewoyaa’s current funding arrangements, which comprise Piedmont’s staged earn-in agreement, the agreed, non-binding Heads of Terms with the Minerals Income Investment Fund of Ghana for its investment in the Company and the process that is underway to secure a partner for a portion of the available off-take, we are in an excellent position to fully fund the Company’s share of the development expenditure for the Project.

 “While we await the completion and receipt of the funds from MIIF’s investment, expected in Q1 2024, and the completion of the offtake process in late Q1 2024, we are undertaking this institutional placing in order to strengthen the Company’s cash balance, notably in light of recent takeover offers from the Company’s largest shareholder, Assore, and to ensure the advancement of Project in line with the current development schedule.

“Funds will be allocated towards advancing the activities agreed under the grant of the Mining Lease and for further drilling following the report of a 106m continuous pegmatite interval and broad intersections of visible spodumene outside of the current MRE. This drilling will contribute to the Company delivering an upgraded Mineral Resource Estimate for the Project in Q3 2024.

“We look forward to the completion of the placing, which we believe represents a major milestone towards fully de-risking the funding of the Project.“

Background to the Equity Placing

On 29 June 2023, the Company published a Definitive Feasibility Study of the Ewoyaa Project (“DFS”) which highlighted economic outcomes placing the Project as an industry-leading asset with a steady state production rate of 365,000 tonnes per annum (“ktpa”) over a 12-year Life of Mine, an All-in Sustaining Cost of US$675/tonne and an NPV₈ of US$1.3bn.

The total development expenditure for the Project is estimated to be US$185 million, of which the Company’s partner, Piedmont Lithium, will sole fund the initial US$70 million, and 50% thereafter. As previously disclosed, MIIF and the Company have entered into a non-binding financing arrangement for US$32.9 million which is currently in the process of completing. Following MIIF’s investment, the Company’s development expenditure requirement for Ewoyaa equates to US$38 million.

In parallel, the Company is undertaking a process to seek an off-take partner for a portion of the available off-take from Ewoyaa, which is expected to provide upfront capital. This process is expected to complete in Q1 2024. Together, the Equity Placing, the off-take financing and MIIF’s intended investment are expected to fully fund the development expenditure for the Project and provide additional capital for the Company to continue its exploration plans for 2024 and broader corporate requirements.

Advisers

Canaccord Genuity (Australia) Limited is acting as Lead Manager to the Equity Placement. Wilsons Advisory & Stockbroking is acting as Co-Manager.

Expected Timetable of Principal Events

The times and dates set out below are subject to change and may be adjusted by the Company in consultation with the Lead Manager. In the event of any significant changes from the below expected timetable, details of the new times and dates will be notified to Company shareholders by an announcement on a Regulatory Information Service.

The timetable is subject to modification at the Lead Manager’s discretion.

Allotment and trading

Allotment for New Shares (ASX and AIM) and admission to trading on AIM is expected to take place on or around 22 December 2023.

The New Shares will be issued fully paid and will rank pari passu in all respects with the Company’s existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Additional Information

The content of this Announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000, as amended (“FSMA”). Reliance on this Announcement for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an appropriate independent financial adviser.

Nothing contained in this announcement constitutes investment, legal, tax or other advice. You should seek appropriate professional advice before making any investment decision.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Company, the Lead Manager or the Co-Manager, or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The New Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the ASX and AIM.