MIIF To Participate In Competitive Process To Buy 40% Of Lithium Spodumene To Produce
The Atlantic Lithium Equity Investment, MIIF will participate in the competitive process to buy 40% of the lithium spodumene to be produced.
Below is the Lithium Equity Investment structure:
- MIIF is investing US$27.9 million in Atlantic Lithium, via its Ghanaian subsidiaries, for a 6% contributing interest in the Company’s 10 Ghana Portfolio assets.
- This will take GoG interest to 19%, in addition to the GoG free carry of 13%.
- Royalty rate negotiated at 10%, against the previous 3% to 5%.
- MIIF will further subscribe for 19,245,574 Atlantic Lithium shares at a price of US$0.2598 (20 pence) per share, for a value of US$5 million (£3.9 million), equating to 3.06% of the total issued share capital of the Company.
- MIIF has the right (warrants) to buy more shares at a locked in price. This could increase MIIF’s shares in Atlantic to 4.5%, if warrants are exercised.
- MIIF will participate in the competitive process to buy 40% of the lithium spodumene to be produced.
- By having rights to 40% of the lithium spodumene, MIIF seeks to leverage that for co-investments in battery manufacturing and the development of a refinery.
- Atlantic and MIIF to develop the Feldspar value chain. UMAT is currently undertaking a feasibility study for beneficiation in ceramics in line with a proposed Ceramics Development Policy.
- Board Representation:
- 2 Seats at Ewoyaa (Barari) (hitherto, 1 board seat)
- 1 Seat at the listed Atlantic (hitherto, no board seat)
- Atlantic will list on the GSE, affording every Ghanaian the opportunity to become a shareholder in the Company.
Ewoyaa Project Level Financial Highlights | |
• Free cash flow over life of mine: | US$2.4 billion, with average life of mine EBITDA of US$316 million per annum |
• Percentage Stake: | 6%, aside the Free Carry of 13%. This would mean MIIF interest being 19%, and 2 board seats at Asset Level. |
• The Value Due MIIF Based on Post Tax NPV on Ewoyaa Alone: | US$ 90 million on its 6% paid interest; and US$ 195m free carry value
In all, MIIF’s equity interest is valued at US$ 285m; based solely on Ewoyaa’s Definitive Feasibility Study. |
Projected Royalty Over Life of Mine: | Based on a 10% Royalty Rate, the State through MIIF will earn US$624 million over the life of mine |
The recent offer of £0.33 (US$ 0.42) per share represents a 62% upside for MIIF.
As indicated, MIIF negotiated a low price compared to the price movement of Atlantic’s share on the stock market.
MIIF has earned 31% ROI even before disbursing.