Atlantic Lithium says its strategic funding partner for the flagship Ewoyaa Lithium Project, Piedmont Lithium has signed a definitive agreement with North American Lithium producer Sayona Mining to combine the two companies.
The new company will be called MergeCo.
Atlantic said it held positive discussions with Sayona chief executive Lucas Dow, the intended chief executive and managing director of MergeCo, in which he stated the company's commitment to supporting the continued development of the Project towards production.
Atlantic confirms that MergeCo will assume Piedmont's prior obligations.
MergeCo will be required to sole fund $70 million towards the development expenditure for the project, with any cost overruns shared equally between Atlantic and MergeCo.
This will allow it to earn up to 50% of Atlantic's interest in the project and the right to an offtake agreement for 50% of the project's spodumene concentrate production at market rates.
"We wholeheartedly welcome the commitment from MergeCo towards the continued funding and development of the Company's Ewoyaa Lithium Project towards production,” said Atlantic executive chairperson Neil Herbert.
"With lithium prices expected to remain subdued over the short-medium term, we believe that Ewoyaa's low-cost profile makes it a beautiful asset in MergeCo's enlarged portfolio.
“The Proposed Merger not only emphasises the underlying belief in lithium's role in the global energy transition but also significantly de-risks the funding of the Project, at an important juncture in its lifecycle.”
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
