Atlantic Lithium has received FIRB approval for Zhejiang Huayou Cobalt’s proposed A$292 million takeover, while Huayou has completed the transfer of Elevra’s Ghana project rights and agreed to fund up to US$66 million of remaining development obligations. The scheme still requires shareholder and court approval, with the first hearing scheduled for 5 November.
- FIRB approval removes a key non-waivable condition of the proposed takeover
- Huayou will sole-fund up to US$66 million of remaining Stage 3 development costs
- Huayou could increase its Ghana portfolio interest from 22.5% to 50%
- Atlantic Lithium ended September with A$7.7 million in cash and no debt
- First Court Hearing scheduled for 5 November 2026
FIRB approval advances the Huayou takeover
Atlantic Lithium Limited (ASX:A11) has cleared a significant regulatory hurdle in Zhejiang Huayou Cobalt’s proposed acquisition of the company, with the Australian Treasury confirming that the Commonwealth has no objection to the scheme. The approval satisfies a non-waivable Foreign Investment Review Board condition under the Scheme Implementation Deed.
The proposed transaction remains an all-cash offer of US$0.25486 per share, equivalent to A$0.354 per share based on the company’s stated conversion, valuing Atlantic Lithium at approximately US$210 million or A$292 million. The offer represented a 26.6% premium to the company’s 6 May closing price. The development follows the FIRB approval hurdle previously reported as outstanding for the proposed acquisition.
Court process sets the next takeover test
The first Supreme Court of Western Australia hearing is scheduled for 5 November. Atlantic Lithium will seek orders to convene the shareholder meeting and approve the dispatch of the Scheme Booklet, which is expected to contain the board’s recommendation, the independent expert’s report and the meeting notice.
The board continues to unanimously recommend the transaction, subject to there being no superior proposal and the independent expert concluding, and continuing to conclude, that the scheme is in shareholders’ best interests. Each director also intends to vote shares held or controlled by them in favour, subject to the same conditions. Shareholder approval, further regulatory clearances and a second court approval remain outstanding. The proposed all-cash transaction was first announced in the US$210 million takeover agreed in May.
Huayou assumes Ghana funding obligations
Separately, and after the quarter ended, Huayou completed its agreement with Elevra Lithium to take over Elevra’s rights and obligations across Atlantic Lithium’s Ghana portfolio, including the Ewoyaa project. Huayou now holds rights to a 22.5% interest in the portfolio and has assumed Elevra’s spodumene concentrate offtake rights and other obligations under the project agreement.
The transfer removes the development-cost conditions precedent under that agreement, which Huayou has agreed are satisfied or waived. Subject to the project agreement and related supplementary arrangements, Huayou will sole-fund up to the remaining US$66 million of its Stage 3 obligation. If that funding obligation is completed, Huayou’s interest would rise by a further 27.5% to 50%, after which development costs would be shared equally. The arrangement builds on the Huayou Ghana stake transfer announced earlier in October.
September quarter spending and cash position
Atlantic Lithium spent A$4.01 million on exploration, feasibility and development work in Ghana during the September quarter, alongside A$0.24 million on exploration in Côte d’Ivoire. Exploration and evaluation expenditure totalled A$4.255 million in the Appendix 5B cash flow, while operating activities used a further A$1.745 million.
The company ended the quarter with A$7.697 million in cash and no debt. It also reported A$38.196 million of unused financing facilities, giving total available funding of A$45.893 million and an estimated 7.6 quarters of funding based on the quarter’s relevant outgoings. That calculation includes the unused facility and should not be read as a standalone cash runway.
Ewoyaa remains the strategic centrepiece
Ewoyaa is being advanced as Ghana’s first lithium mine and has a reported mineral resource of 36.8 million tonnes at 1.24% lithium oxide, including 25.6 million tonnes of probable ore reserves at 1.22% lithium oxide. The company also continues low-cost exploration across the Agboville and Rubino licences in Côte d’Ivoire.
For shareholders, the immediate tension is between a defined cash offer and the project’s longer-term development potential. The 5 November hearing is procedural rather than a vote on the transaction itself, but it should determine whether the formal shareholder approval process can proceed. The more consequential evidence will come with the Scheme Booklet, the independent expert’s assessment and confirmation that Huayou’s funding obligations are being delivered under the project agreements.
Bottom Line?
The transaction has removed one major approval hurdle and strengthened Ewoyaa’s funding position, but value realisation still depends on the court process, shareholder vote and Huayou completing its staged funding obligations.
Questions in the middle?
- Will the Supreme Court approve the shareholder meeting process on 5 November?
- What conclusion will the independent expert reach on the A$0.354-per-share offer?
- How quickly will Huayou begin funding Ewoyaa, and will it complete the US$66 million obligation required to reach a 50% interest?