Ghana’s sovereign minerals fund Minerals Income Investment Fund (MIIF) signed non-binding heads of terms to invest $32.9m in Australia-based Atlantic Lithium and its Cape Coast lithium portfolio subsidiaries in Ghana.

The investment is intended to support the development of the Ewoyaa lithium project in Ghana and the larger Cape Coast lithium portfolio towards production.

Under the terms of the agreement, MIIF will invest $27.9m in Atlantic Lithium’s Ghanaian subsidiaries to acquire a 6% contributing interest in the Ghana portfolio, including the Ewoyaa lithium project.

The stake will take the form of financing of development, exploration, and studies expenditure.

Besides, MIIF will subscribe to about 19.24 Atlantic Lithium shares at nearly $0.26 per share.

In May 2022, the parties signed a non-disclosure agreement to enter into talks regarding the investment.

MIIF CEO Edward Nana Yaw Koranteng said: “The acquisition of a 6% contributing interest in the Company’s Ghanaian subsidiaries will support the funding of ongoing capital and exploration expenditure requirements across Ewoyaa and the broader Atlantic Lithium portfolio.

“This is just our initial investment in Atlantic Lithium and its Ghanaian subsidiaries. We hope to later invest in the value chain and the development of other by-products, such as feldspar, in line with the Government of Ghana’s critical minerals policy.”

Atlantic Lithium completed the definitive feasibility study (DFS) of the lithium project in June 2023.

The study estimated an after-tax net present value (NPV) of $1.5bn with an internal rate of return estimated at 105% and a payback of 19 months.

Atlantic Lithium executive chairman Neil Herbert said: “MIIF’s investment in the Company’s Ghanaian subsidiaries will be used towards ongoing development, exploration and study expenditure across Ewoyaa and the Company’s broader portfolio.

“MIIF’s contributions will significantly derisk the success of the Project. In this way, we feel MIIF will share ownership in Ghana’s efforts to drive the country’s position in the global EV supply chain.”

The mining company said that there is no certainty that the proposed investment by MIIF will be concluded or on what terms it would be concluded.