Aim- and ASX-listed Atlantic Lithium has entered into binding financing agreements with global investment company Long State Investments to secure funding of up to £28-million to support the advancement of its Ewoyaa lithium project, in Ghana.

The agreements include a share placement agreement (SPA) to raise up to £8-million over the next 24 months.

Through the SPA, the company says it will raise £2-million through an initial placing of 24.79-million shares.

After the initial placement, the company, at its sole discretion, says it can undertake three additional placings of £2-million each, provided that the maximum aggregate amount raised under the SPA shall not exceed £8-million and provided that the 80-day period in respect of any prior placement under the SPA has passed.

The agreements also include a committed equity facility to raise up to £20-million through placement tranches of shares in the company over the next 24 months, subject to shareholder approval.

The utilisation of the facility is at the company's discretion.

Having secured all of the necessary regulatory approvals, Atlantic Lithium says it currently awaits the ratification by Ghana's Parliament of the mining lease in respect of the project, which serves as the final step in Ewoyaa's permitting process and will enable the company to advance the funding of the project.

Owing to the ongoing delay in the ratification of the mining lease and prevailing lithium market conditions, the company says it has implemented a series of measures to conserve cash to ensure its survival through the current downturn.

Through such measures, the company notes, it has reduced cash outflows from A$8.2-million in the first quarter, to A$3.8-million in the fourth quarter.

The company explains that the SPA and committed equity facility agreement provide it with access to a significant pool of capital, while maintaining flexibility and control over the terms of the placements, over a two-year period, which represents a critical period for the company as it advances the project towards construction and production.

Atlantic Lithium says the agreements enable it to source funds if and when required during the period, at more attractive terms compared to other traditional equity financing methods, which the board believes are often associated with greater shareholder dilution.

The company proposes to hold an extraordinary general meeting in October for the purposes of seeking shareholder approval for the proposed issue of shares and warrants contemplated by the facility.

Atlantic Lithium says its largest shareholder, Assore International has confirmed that it intends to vote in favour of the resolutions relating to the agreements, in the absence of a superior proposal.

"Through the SPA and committed equity facility agreement, we are pleased to secure both immediate and longer-term access to funding at such a key juncture in the project's development,” says Atlantic Lithium CEO Keith Muller.

Against the backdrop of the subdued lithium pricing environment and the ongoing delay to the ratification of the Ewoyaa mining lease, Muller says these agreements are timely to strengthen the company's financial footing through a means that minimises shareholder dilution.

He explains that the terms of the agreements provide the company with maximum control in respect to drawing on the funding available, which significantly de-risks the successful delivery of the project as Ghana's first lithium mine.

"Long State has a strong record of investing in companies with an attractive growth trajectory and providing the financial backing for them to achieve their strategic objectives. These agreements, therefore, demonstrate Long State's strong confidence in the company's strategy and ambitions.

"We welcome Long State as a key strategic shareholder as we look to pave the way to delivering spodumene production at Ewoyaa. We look forward to providing further updates in due course”.

"We are very pleased to support Atlantic Lithium at such an important stage in its journey,” adds Long State Investments MD Philip Ho.

Ho says the company's flagship Ewoyaa lithium project represents a high-quality, strategically significant asset with the potential to become Ghana's first lithium-producing mine, underpinned by strong fundamentals and improving market dynamics.

“Combined with an experienced management team and a clear development strategy focused on creating shareholder value, we see Atlantic Lithium as a highly attractive investment opportunity.

“We look forward to working closely with Atlantic Lithium as a long-term partner and are confident that together we can deliver significant value through the successful development of the Ewoyaa lithium project and beyond,” he continues.