Atlas Lithium (NASDAQ: ATLX) shares exploded on Tuesday after securing significant funding for its hard-rock lithium project in Brazil, which comprises 64 mineral rights spread over approximately 304 km2 located primarily in the Lithium Valley area of Minas Gerais province in Brazil.
By 11:40 a.m. EDT, the stock surged 12.4% to $43.70 apiece, having hit a 52-week high of $45.00 in the earlier hours of trading. The US-based battery metals miner has a market capitalization of $292.2 million.
On Tuesday, Atlas announced what is considered the largest lithium royalty deal in Brazil ever 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 upfront cash consideration of $20 million.
LRC is widely considered the premier lithium-focused royalty company and recently completed an initial public offering of C$150 million in Toronto. It currently holds a 1% royalty on all claims from Sigma Lithium, which recently began production at the Grota do Cirilo project nearby.
With the royalty transaction, Atlas is now fully funded to complete its 40,000-metre drilling campaign at the Das Neves property, where it currently has 10 active drills working towards delineating an initial lithium resource.
So far, the company has outlined an important discovery at Anitta, which has a strike length of at least 1.1 km while being open along strike and at depth. In February, the company also estimated widths of approximately 20 metres at Anitta.
Recently, Atlas reported that a drill hole within Anitta identified a spodumene intersect with a high geochemical reading of 4.40% 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, a characteristic that is conducive to the development of an open pit mine.
“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.” LRC CEO Ernie Ortiz said in a news release.