Lithium Co. Expands Footprint in Brazil, Nears Production

Source: Streetwise Reports 06/24/2024

Atlas Lithium Corp. ATLX announced it has made "significant progress" towards lithium concentrate production in Q4 2024 and has substantially expanded its lithium mineral rights footprint in Brazil.

Atlas said it has more than doubled its lithium exploration portfolio in the country to about 539 square kilometers or nearly 54,000 hectares (ha), leading the company to believe "it has the largest claim ownership position of any listed company in this new lithium frontier" and the "largest lithium exploration footprint in Brazil."

To put that in perspective, the company noted the area is nine times the size of Manhattan in New York City.

"Our new mineral rights near Governador Valadares provide access to an exciting new lithium frontier in Brazil that has been relatively untapped beyond gemstone mining" said James Abson, chief geology officer for Atlas. "This region of Minas Gerais state hosts dozens of documented lithium-rich pegmatites, presenting an opportunity for us."

Last month, the company announced that is modular dense media separation (DMS) lithium processing plant was in the final stages of fabrication and trial assembly before its shipment to Brazil's Lithium Valley. The modular processing plant is a key part of its strategy to rapidly advance production at its Minas Gerais lithium project.

"The company is making rapid and substantial progress with this — in layman's terms, "They are not messing around" wrote Technical Analyst Clive Maund on May 7.

While the stock has since dipped, as other lithium stocks have declined as well, Maund wrote that he was staying long and rated it a Strong Buy for all timeframes.

"Pushing towards becoming a producer of lithium concentrate is our top focus in the short term" said Atlas Vice President of Business Development Nick Rowley. "We have been also working on significantly increasing our overall mineral rights holdings to solidify our leading position in Brazil, which is attracting increasing interest globally as a hub for hard-rock lithium production."

Area Home to World-Class Pegmatites

Atlas' initial exploration campaign within these new districts is near Governador Valadares, a city with approximately 280,000 inhabitants and an important regional center in the state of Minas Gerais with favorable infrastructure and access roads. It's about 350 kilometers from the Port of Vitoria, making it highly attractive for lithium exploration and development.

The current campaign at the Valadares project is focused on areas about 50 kilometers from the city, strategically located within the Eastern Brazilian Pegmatite Province (EBPP), one of the largest pegmatite provinces in the world, the company said.

The EBPP is home to some world-class, economically significant lithium-bearing lithium-cesium-tantalum (LCT) pegmatites. The company's newly acquired permits lie within the highly prospective Joao Pinto schist units, which have been intruded by the Galiléia tonalites and other granitic bodies, including numerous LCT pegmatites.

According to the CPRM, or the Brazilian Geological Survey, four lithium-mineralized pegmatite occurrences have been identified within Atlas' permits, two of which have been confirmed to contain spodumene.

Other reported lithium minerals include lepidolite and amblygonite, along with accessory minerals such as colombo-tantalite. During initial reconnaissance mapping and sampling, the company said its exploration team discovered an additional six spodumene-bearing pegmatites.

A detailed map is being compiled, highlighting the positions of spodumene crystals and spodumene-enriched zones that will further guide the company in an upcoming drilling campaign.

The Catalyst: Market Could Have Breakout This Year

A soft and silvery metal, lithium is an important part of the energy transition for electric vehicle (EV) batteries and energy storage systems. It also strengthens alloys, serves as a high-temperature lubricant, and treats bipolar patients.

China dominates the market, which is projected to grow from US$2.5 billion in 2023 to US$6.4 billion by 2028 at a compound annual growth rate (CAGR) of 20.4% from 2023 to 2028, according to a report by Markets and Markets.

The consensus among market analysts points to a recovery in lithium prices in the fourth quarter of 2024, Fastmarkets reported.

Katusa Research predicted the lithium market could have a major breakout this year, citing its use in EVs and storage batteries as key drivers.

"The opportunity in lithium is more electric than ever" Katusa wrote.

The lithium Atlas plans to mine in Brazil is contained within spodumene, a lithium-bearing mineral found in pegmatites or hard rock deposits. The extraction method employed by Atlas to retrieve lithium concentrate from its mined spodumene consumes considerably less water and offers superior ESG outcomes compared to the extraction of lithium from brines, the company said.

Atlas "has been steadily progressing its site to production" wrote H.C. Wainwright & Co. analyst Heiko F. Ihle in a May 1 research note. He rated the stock Buy with a US$40 per share target price.

Ownership and Share Structure

About 36% of Atlas Lithium is owned by management and insiders. About 13.5% of the shareholders are institutional. The rest, about 50.5%, is retail.

Other top shareholders include Waratah Capital Advisors Ltd. with 4.47%, Mitsui & Co. Ltd. with 12.64%, and Candace Shira Associates LLC with 1.44%, according to Reuters.

Its market cap is about US$146.84 million. It trades in a 52-week range of US$34 and US$9.60.

Important Disclosures:

1. Atlas Lithium Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Atlas Lithium Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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