By: OrePulse

Atlantic Lithium Limited completed the novation of Elevra Lithium Limited's rights in the Ewoyaa Lithium Project in Ghana to Zhejiang Huayou Cobalt Co., a transfer that hands the Chinese battery-materials group a larger funding role in what would be Ghana's first lithium mine, the companies said.

Under the novation agreement, Huayou took over the rights and project responsibilities previously held by Elevra, including Elevra's prior spodumene offtake arrangement tied to the project, according to the companies. A novation substitutes one party for another in an existing contract, meaning Huayou now stands in Elevra's place with respect to those offtake and development obligations.

Huayou now holds a 22.5% interest in Atlantic Lithium's Ghana portfolio as a result of the transfer, the companies said. Atlantic Lithium continues to hold the balance of the project interest not held by Huayou, according to the companies.

Ghana's Ministry of Lands and Natural Resources facilitated the transfer and confirmed it had no objection to Huayou taking on the role of controlling entity for the project, the ministry said. The ministry is the regulatory authority overseeing changes of control in mineral rights tied to the project, and its confirmation was described by the companies as a condition cleared in the transfer process.

Under the terms of the arrangement, Huayou will solely fund the remaining $66 million of its Stage 3 development commitment to Ewoyaa, the companies said. That funding commitment will raise Huayou's interest in the Ghana portfolio by a further 27.5 percentage points, bringing its total stake to 50%, the companies said. Once it reaches that threshold, Huayou and Atlantic Lithium will share further development costs equally, the companies said. The companies did not specify a timeline for reaching the 50% threshold beyond tying it to the pace of the remaining Stage 3 spending.

The novation is part of a broader transaction in which Huayou has been taking a controlling position in Atlantic Lithium, the companies said, with the transfer of Elevra's rights representing one step in that larger process rather than a standalone deal.

Atlantic Lithium chief executive Keith Muller said Huayou brings financial strength, technical expertise and experience running large-scale projects to the partnership, which he said should help reduce the risk associated with developing Ewoyaa.

The Ewoyaa project, located in Ghana's Central Region, has been positioned by Atlantic Lithium as the country's first lithium mine. The novation agreement and the associated funding commitment mark a step in advancing the project through its Stage 3 development phase, according to the companies.

The arrangement replaces the offtake and development role Elevra previously held at Ewoyaa with Huayou's direct involvement, consolidating the project's external financing and marketing relationships under a single partner rather than splitting them between two companies, according to the companies. Atlantic Lithium said that consolidation, combined with Huayou's committed funding, was intended to keep the Stage 3 development program moving forward without requiring Atlantic Lithium itself to fund that portion of the work.

The companies said Huayou's expanding role in the Ghana portfolio has developed in stages, moving from its initial 22.5% interest toward the 50% level it will reach once its Stage 3 funding commitment is fulfilled. Beyond that point, the companies said, future development costs at Ewoyaa will be split evenly between Atlantic Lithium and Huayou.

As the entity responsible for approving changes of control over mineral rights in Ghana, the Ministry of Lands and Natural Resources said its review of the novation found no grounds for objection to Huayou's expanded position, allowing the transfer to proceed, the ministry said. The ministry did not describe the review in further detail beyond confirming the outcome, according to the companies.

Atlantic Lithium and Huayou said the structure of the agreement, under which Huayou alone funds the remaining Stage 3 commitment in exchange for its increased stake, is designed to secure the capital needed to carry Ewoyaa through to production while leaving Atlantic Lithium's remaining interest in the project unchanged until the 50% threshold is reached.