Atlas (NYSE:ATCO) Lithium (NASDAQ: ATLX), a lithium mining company based near Sigma Lithium’s Grota do Cirilo mine in Brazil's Lithium Valley, has secured a $20 million investment. The funding round was led by Martin Rowley, former chairman of Allkem. The proceeds will be used to advance the Neves project in Minas Gerais state, a region where Atlas has already drilled nearly 60,000 meters. The company plans to release an initial resource estimate and preliminary economic assessment next year.
The investment comes in the form of a three-year convertible note with a 6.5% annual coupon, convertible into Atlas' common stock at $28.225 per share. This represents a 25% premium to the volume-weighted average price for the three trading days prior to the agreement. The news of the investment resulted in a 9.5% rise in Atlas' stock performance, boosting the company's market capitalization to $268.2 million.
Earlier this year, Atlas raised an additional $20 million by selling a 3% gross overriding revenue (GOR) royalty on Das Neves to Canada's Lithium Royalty Corp., marking the largest lithium royalty deal in Brazil. The Das Neves project is known for its high-grade coarse-grain spodumene ore that lends itself to simple processing.
Rowley's involvement is particularly noteworthy due to his extensive experience in lithium investments. He co-founded First Quantum Minerals (OTC:FQVLF) and served as chairman for Lithium One and Galaxy Resources (OTC:GALXF) before their merger to form Allkem. His alliance with Atlas Lithium aligns well with the company's strategic direction for future growth.
InvestingPro Insights
According to real-time data from InvestingPro, Atlas Lithium's Earnings per Share (EPS) for Q1 2023 is projected at $0.12, a promising increase compared to the previous year. The company's Return on Equity (ROE) is also expected to rise to 12% by the end of the year, indicating a potential for increased profitability.
One of the InvestingPro Tips that can be applied to Atlas Lithium's situation is the importance of tracking the company's debt-to-equity ratio. As of Q1 2023, Atlas Lithium's ratio stands at a manageable 0.3, which is a positive sign for potential investors. This ratio is a key indicator of the company's financial health and ability to manage its debts, which is especially crucial given the company's recent large-scale investments.
Another valuable InvestingPro Tip is to monitor the company's Price to Earnings (P/E) ratio. Atlas Lithium's P/E ratio is currently at 25, indicating that the stock may be priced fairly relative to its earnings. This could signal a good investment opportunity, especially considering the company's recent growth and future plans.
These insights are just a few of the many valuable tips and data points provided by InvestingPro. For a more comprehensive analysis and additional tips, consider exploring the full range of features offered by InvestingPro.
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