Atlantic Lithium Shares Dip Amid Macquarie’s Price Target Revision
Atlantic Lithium Limited experiences a 4.4% share price dip
Atlantic Lithium Limited recently saw a 4.4% dip in its share price following Macquarie’s decision to lower its price target to A$0.66. The downward adjustment was prompted by Ghana’s decision to increase its free carry interest and royalty rates associated with the mining lease of the Ewoyaa project. This development led to a downward EPS revision for FY24-28 by 15-35%, as noted by Ayushman Ojha. Despite the revised price target, Macquarie retains an “outperform” rating for Atlantic Lithium, viewing the acquisition of the mining lease as a crucial risk mitigation strategy. The company’s year-to-date performance has been less than stellar, recording a slump of approximately 26%.
Atlantic Lithium secures mining lease for the Ewoyaa Lithium Project
Earlier, Atlantic Lithium, along with Piedmont Lithium, secured a mining lease from Ghana’s Ministry of Lands and Natural Resources for the Ewoyaa Lithium Project. This project plays a pivotal role in the U.S. electric vehicle supply chain. Currently awaiting parliamentary approval, the 15-year lease for lithium mining and production is expected to be finalized by H2. The Minerals Income Investment Fund of Ghana (MIIF) plans to invest $32.9 million in Ewoyaa and Atlantic Lithium, subject to Environmental Protection Agency approval and finalization of permits.
Piedmont Lithium’s interest in Ewoyaa
Patrick Brindle, Piedmont’s COO, emphasized the significance of the Ewoyaa project for Ghana and local communities. Piedmont, which currently holds a 9% stake in Atlantic Lithium, plans to acquire a 22.5% interest in Ewoyaa pending government approval. This additional investment could potentially lead to equal ownership between Piedmont and Atlantic Lithium, excluding MIIF’s investment and the Ghanaian government’s carried interest.
Utilizing Ewoyaa for the lithium conversion facility
Piedmont intends to utilize material from Ewoyaa for its Tennessee-based lithium hydroxide conversion facility. The company has an agreement in place to purchase 50% of Ewoyaa’s lithium output. Piedmont, in partnership with Sayona Mining on Quebec projects and involved in the Carolina Lithium and Tennessee Lithium projects, aims to develop an integrated lithium business that supports energy independence, the electrification of transportation and energy storage, and a transition to a net-zero world.
This article provides insight into the recent decline in Atlantic Lithium’s share price due to Macquarie’s revised price target. It also highlights the importance of the Ewoyaa Lithium Project for the U.S. electric vehicle supply chain and the potential investments from Piedmont Lithium. The utilization of Ewoyaa’s resources for Piedmont’s lithium conversion facility further demonstrates the company’s commitment to sustainable energy solutions.
