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Piedmont Lithium establishes strategic partnership with IronRidge Resources

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Global Mining Review,

Piedmont Lithium Inc. has entered into definitive agreements to establish a strategic partnership with IronRidge Resources (IRR) through the purchase of an equity stake in IRR, staged project investments to earn a 50% interest in IRR’s Ghana-based lithium portfolio, and a binding supply agreement for 50% of IRR Ghana’s planned spodumene concentrate (SC6) production.

IRR Ghana has a notable portfolio of spodumene prospects, anchored by the promising Ewoyaa Project. The Ewoyaa Project has a current Mineral Resource of 14.5 million t at 1.31% Li2O with vast exploration potential. The Ewoyaa Project has the potential to be a large, low-cost SC6 producer.

In January 2021, IRR published a scoping study for the Ewoyaa Project forecasting an average of 295 000 tpy of planned SC6 production, an US$345 million after-tax net present value and an after-tax internal rate of return of 125%, for initial capital investment of US$70 million. The Ewoyaa Project capitalises on a good location, less than one mile from a major national highway and only 70 miles to the major port of Takoradi. The site is also directly adjacent to high voltage power and is expected to have a low environmental impact, due to reliance on solar and hydroelectric generating capacity to power the facility. Piedmont conducted extensive due diligence over the past several months, including through site visits to Ghana, and reportedly believes that IRR Ghana has significant upside potential.

Piedmont will invest approximately US$15 million (£10.8 million) to acquire a 9.47% equity interest in IRR (the subscription), and will appoint one director to IRR’s Board of Directors. Piedmont will also have the opportunity to earn a 50% stake in IRR Ghana by investing: (i) US$17 million to fund ongoing exploration and a definitive feasibility study over the next 24 months to earn an initial 22.5% project interest; and (ii) a further US$70 million in 2023 – 2025 to fund the construction of the Ewoyaa Project to earn an additional 27.5% project interest, which would bring the total to 50% ownership in IRR Ghana. Piedmont and IRR have also entered into a binding SC6 supply agreement, conditioned on Piedmont completing its earn-in obligations, pursuant to which IRR will supply Piedmont 50% of IRR Ghana’s planned SC6 production (currently estimated to be 147 500 tpy) at market prices on a life-of-mine basis.

The subscription is expected to close in August 2021 subject to satisfaction of conditions precedent with the project investment expected to be staged over a 3 to 4 year period, leading to initial production in 2025.

Keith D. Phillips, President and Chief Executive Officer, comments:

“We are very pleased to announce a partnership with IronRidge Resources to jointly develop their outstanding spodumene project portfolio in Ghana. We consider IRR’s Ewoyaa Project to be among the world’s most promising spodumene projects. The high-grade mineral resource is currently modest in scale but offers substantial exploration potential, and the project is very well-located, being only 70 miles from a major port. Ewoyaa builds on Piedmont’s strategic commitment to be a large-scale and low-cost producer of lithium hydroxide from spodumene concentrate sourced from diverse sustainable resources in favorable jurisdictions.

“Ghana is one of Africa’s most successful nations, with a strong mining tradition and an increasingly diverse economic base. In naming Ghana as the headquarters for its entire African business earlier this year, Twitter described Ghana as a ‘Champion for Democracy’. Euler-Hermes regularly rates Ghana among the lowest-risk jurisdictions in the region, and Transparency International rates Ghana ahead of other lithium-rich countries such as Argentina, China, Brazil, Mexico, Bolivia, Mali, and the DRC in its annual corruption perception rankings.

“2021 has been a transformative year for Piedmont. We have built the world’s premier lithium development leadership team, significantly expanded our world-class Carolina Lithium Project, and become a multi-asset company through strategic investments in Quebec and in Ghana. We raised sufficient capital in March 2021 to comfortably fund these strategic initiatives as well as our definitive feasibility study in North Carolina and should end 2021 with a robust cash balance. We will now evaluate plans to capitalise on our expanded spodumene resource base to become a larger producer of the battery-quality lithium hydroxide that America will require to power the ongoing transition to electric vehicles. Lithium has been called ‘the irreplaceable element of the electric era’, and we will bring large scale production of lithium hydroxide to America.”

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