Atlantic Lithium responds to ASX queries following short-seller’s report

Lithium explorer Atlantic has been grilled by the Australian Securities Exchange concerning its dealings with a Ghana-based mineral exploration services company following damning claims made by a US-based short-seller.

The ASX referred to allegations made in a Blue Orca Capital report earlier this month concerning the acquisition of Joy Transporters in 2021 to obtain licences on two of the four tenements for Atlantic’s flagship lithium project in the West African country.

Blue Orca alleges Joy Transporters was owned by the son of a high-ranking politician known as “General Mosquito”, and that Atlantic paid the politician to acquire mining licences.

The ASX asked a number of questions in its requests for information, including demanding an explanation for an “apparent discrepancy” between Atlantic’s assertion the value of the shares to acquire Joy Transporters was about £280,000 ($512,302) while its financial statements indicated the value was £542,808.

Atlantic said this was due to it using the market price and not the higher value based on the March 2020 purchase agreement.

The ASX also asked whether Atlantic planned to perform any exploration activities on the licensed areas — being the Saltpond and Cape Coast prospecting areas — and the rationale for acquiring the Joy Transporters licences.

Atlantic said it was focused on the completion of its definitive feasibility study for its flagship Ewoyaa project, noting the Saltpond and Cape Coast licences were adjacent to the site.

“The company considers that they represent an extensive tenure package that provides valuable synergies with the company’s existing portfolio and team,” Atlantic said in its response.

“The reasoning behind acquiring the Joy Transporters licences is to provide the opportunity for the company to expand its lithium exploration portfolio in Ghana, with a prospective ground holding adjacent to . . . Ewoyaa.

“These licences are also prospective for feldspar, which is widely used in the ceramics industry.”

Shares in Atlantic and Piedmont Lithium, which earns a 50 per cent interest in Atlantic’s spodumene projects in Ghana and was also targeted by Blue Orca, tumbled last month following the short-seller’s report.

Atlantic at the time labelled the report “false and misleading”, insisting it held valid prospecting licences with operating permits for all of its current activities in accordance with the Ghanaian government.

Atlantic shares have lost almost 25 per cent of their value over the past month and closed at 47.5¢ on Tuesday, down just over 1 per cent.