Why Did Atlantic Lithium Request a Trading Halt?
Atlantic Lithium Limited
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Why Did Atlantic Lithium Request a Trading Halt?

Atlantic Lithium Limited Announces Trading Halt and Proposed Equity Placing

Atlantic Lithium Limited (ASX: A11), the African-focused lithium exploration, and development company, has requested a trading halt from ASX, pending a material announcement to the market. This halt will remain in place until the earlier of normal trading commencement on Monday, December 18, 2023, or the release of the pending announcement.

The company cites ASX Listing Rule 17. 1 as the basis for this trading halt request and emphasizes its lack of awareness of any reason that would warrant denying the request or any undisclosed information relevant to the trading halt.

Atlantic Lithium's Focus on Lithium Exploration and Development

Atlantic Lithium is a lithium-focused exploration and development company with a strategic interest in becoming Ghana's first lithium mine operator. The company is aggressively advancing its flagship Ewoyaa Project in Ghana, West Africa, toward production. This project boasts a substantial 35.

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3Mt lithium resource, with a Li₂O grade of 1. 25% in spodumene pegmatite deposits, positioning it as a potentially significant lithium source for Ghana.

The project benefits from a co-development agreement with NASDAQ and ASX-listed Piedmont Lithium, which aids in funding and development. It also enjoys governmental support, robust local infrastructure, and proximity to potential off-takers, all of which contribute to the project's economic viability.

As a modern mining company, Atlantic Lithium places a strong emphasis on responsible practices, focusing on creating long-term benefits for the communities in which it operates. The company holds extensive tenure spanning 1,283km² across Ghana and Côte d’Ivoire.

Growing Lithium Demand and Project Funding

The demand for lithium is projected to surge, driven by the adoption of electric vehicles and the increased use of lithium in energy storage, aligned with global climate change objectives.

Atlantic Lithium has launched an institutional placement, referred to as the "Equity Placing," with the goal of raising approximately A$7. 0 million (£3. 7 million). This placement involves the issuance of new fully paid ordinary shares at an offer price of A$0. 44 (approximately 23. 35 pence) per share. The company also reserves the option to accept oversubscriptions of up to A$2. 0 million (£1. 0 million).

The proceeds from the Equity Placing will be allocated for several purposes:

Meeting mining lease requirements, including expenditures related to the Feldspar Definitive Feasibility Study, downstream conversion studies, and listing on the Ghana Stock Exchange.

Funding various aspects of the Project, such as EPA permitting processes, land acquisition, powerline relocation, engineering works, and other development expenditures.

Expanding exploration efforts, including additional drilling activities.
Bolstering working capital to support operational readiness, production processes, and associated costs.

Canaccord Genuity (Australia) Limited has been appointed as the Lead Manager, while Wilsons Advisory & Stockbroking is acting as Co-Manager for the Equity Placing.

Comments from Neil Herbert, Executive Chairman of Atlantic Lithium

Neil Herbert, Executive Chairman of Atlantic Lithium, expressed confidence in the company's current funding arrangements, which include partnerships and investments. These arrangements provide substantial funding for the Ewoyaa Lithium Project. He emphasized the company's commitment to securing additional capital through the Equity Placing to further strengthen the company's cash balance. The objective is to advance the project in line with the current development schedule.

Funds raised through the placement will support activities related to the grant of the Mining Lease, additional drilling, and upgrading the Mineral Resource Estimate for the Project in Q3 2024.

Herbert underscored the significance of this placement as a critical milestone in fully de-risking the funding of the Ewoyaa Project.

Background to the Equity Placing

The Ewoyaa Project's Definitive Feasibility Study (DFS) published on June 29, 2023, highlighted the project's economic viability, with a steady-state production rate, competitive cost structure, and favorable NPV8.

Development expenditure for the Project is estimated at US$185 million, with Piedmont Lithium funding a significant portion. Atlantic Lithium has also entered into a non-binding financing arrangement with the Minerals Income Investment Fund of Ghana (MIIF) to secure additional funds.

The Equity Placing, off-take financing, and MIIF's intended investment are expected to fully fund the Project's development expenditure and provide additional capital for ongoing exploration and corporate requirements, positioning Atlantic Lithium as a key player in the growing lithium market.

Please note that trading in A11 securities will remain halted until the pending announcement is released or normal trading resumes on December 18, 2023.

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