ASX trading in shares of Piedmont Lithium and Atlantic Lithium was halted until Monday on Thursday to allow the companies to prepare a response to what it enigmatically called “an online report”.
Oddly, the ASX granted the halt request without asking what the online report was and why the trading stop was needed.
It was almost certainly the report from a short seller called Blue Orca Capital that alleged Piedmont’s Inc’s mining licenses in Ghana were obtained by a company it invested in were through what appeared to be “textbook corruption”.
The company it invested in is Atlantic Lithium. Trading in its shares was halted by request in a letter worded the same as the letter from Piedmont. Atlantic’s shares ended at 65 cents on Wednesday while Piedmont’s ended at 88 cents.
The Blue Orca claims saw Piedmont shares slump more than 6% in trading in the US, but they rebounded during the session to end the day 4.8% higher. The late strength made the ASX halt request on look a little odd.
Founded in 2016 in Australia, Piedmont moved its headquarters to North Carolina in hopes of developing a mine that would be one of the largest US lithium mines. However, the project has been delayed due to concerns from local residents and reviews from state regulators.
Piedmont moved to the US in 2021 and invested $US100 million in the same year in Atlantic Lithium to secure spodumene from Atlantic’s mine in Ghana. (Piedmont has a supply agreement with Tesla, which was amended in January.)
Blue Orca claims that after investigating source documents and Ghana corporate records, it found that Atlantic “obtained key Ghana mining licenses by making secret payments and promises of payment to the immediate family of a high-level Ghana politician.”
“In our opinion, evidence of Atlantic’s payments to the son of a high-level politician for mining licenses is textbook evidence of corruption. Atlantic still needs Ghana’s Parliament to approve and ratify its mining licenses and permits in order to build the lithium mine,” Blue Orca claimed.
However, they do not believe that authorities in Ghana will “ratify Atlantic’s mining licenses tainted by corruption,” based on “precedents in Ghana and around Africa.”
“We are short Piedmont because without Atlantic’s Ghana supply, Piedmont and any promise of near-term revenue from its much-hyped Tennessee facility are dead on arrival,” Blue Orca stated.
There was no comment on the Blue Orca claims in the letters to the ASX requesting the trading halts on Thursday.
The claims came the same day (Wednesday) that Piedmont and Sayona Mining announced the first production of spodumene concentrate from their North American Lithium operation in Quebec, Canada.
In a statement to the ASX on Wednesday, Sayona reported about 70 tonnes of lithium concentrate had been generated, with commissioning proceeding as planned and the first saleable concentrate expected to be produced shortly.
“These are exciting times with the first saleable lithium concentrate to be produced soon, marking the next step in Sayona’s evolution towards becoming a leading hard rock lithium producer,” Sayona CEO Brett Lynch said.
“Sayona expects the first shipment of spodumene (lithium) concentrate from NAL will occur in July 2023, with four shipments targeted for the first half of fiscal 2024. The Company is targeting total production between 85,000 tonnes and 115,000t during this period (refer ASX release 17 February 2023),” he added.
Sayona has a 75% stake in NAL and Piedmont has the other 25%.
