Atlas Lithium lands US$20M royalty deal for Neves project in Brazil
Atlas Lithium (NASDAQ: ATLX) saw its share price explode on Tuesday after securing US$20 million funding for its flagship hard-rock lithium project in the Lithium Valley area of Minas Gerais, Brazil.
By 11:40 a.m. EDT, the stock surged 12.4% to US$43.70 apiece, having hit a 52-week high of US$45 in the earlier hours of trading. The U.S.-based battery metals miner has a market capitalization of US$292.2 million.
On Tuesday, Atlas announced the largest lithium royalty deal in Brazil so far by selling a 3% gross overriding revenue (GOR) royalty on the Das Neves project, which covers four of its 64 mining claims, to Canada’s Lithium Royalty Corp. (TSX: LIRC) for US$20 million in cash.
Lithium Royalty recently completed an initial public offering of $150 million. It currently holds a 1% royalty on all claims from Sigma Lithium, which recently began production at the Grota do Cirilo project in Minas Gerais.
With the royalty transaction, Atlas is now fully funded to complete its 40,000-metre drilling campaign at the Das Neves property, where it has 10 drills working towards delineating an initial lithium resource. The property comprises 64 mineral rights spread over 304 sq. km.
So far, the company has outlined an important discovery at Anitta, which has a strike length of at least 1.1 km and is open along strike and at depth. In February, the company estimated the discovery has a width of around 20 metres.
Recently, Atlas reported that a drill hole within Anitta identified a spodumene intersect with a high reading of 4.4% Li2O, which is one of the highest grades reported at a spodumene deposit in Minas Gerais’ Lithium Valley.
According to Atlas, drilling activity within the Anitta discovery has yielded multiple instances of fresh, high-grade spodumene intersects located near the surface, and amenable to open pit mining.
“The Das Neves project exhibits high-grade coarse-grain spodumene ore that should lend itself to simple processing. Brazil is quickly developing into an important and environmentally friendly lithium jurisdiction, and we are excited to support Atlas Lithium on its accelerated path to production,” commented LRC president and CEO Ernie Ortiz in a news release.
