Liberum has updated its valuation for Atlantic Lithium Limited (AIM:ALL) in the wake of what it described as an "impressive" updated scoping study on the Ewoyaa spodumene lithium project in Ghana.
Based on its expectations for the upcoming definitive feasibility study, the broker has increased its price target to 46p a share from 32p previously.
In his analysis, analyst Yuen Low flagged up the third-party validation for both Atlantic and its flagship project from Piedmont Lithium, which is providing US$103mln to fast-track the asset into production. Piedmont described Ewoyaa as “one of the world’s most promising spodumene projects”.
On the Piedmont funding, Low said: “In our experience, for the typical mining developer, raising construction finance is often the single most challenging hurdle. If all goes to plan, Atlantic would not need to raise any further such monies for its Cape Coast lithium portfolio (barring an extreme cost overrun or significant scope change) or enter into offtake agreements with floor or fixed prices, which are often expensive and potentially cap shareholder upside.”
In early afternoon trading, the shares were trading sideways at 21.28p.