Atlantic Lithium (ALL), which has seen its share price soar off the back of its lithium holdings in Ghana in the past two years, has come under fire from a US short seller, which alleges "textbook corruption" took place when the company bought two exploration sites from the son of a politician.
Atlantic's shares plunged late on Wednesday after the report was published, falling 42 per cent to 21p. The shares rebounded to 28p on Thursday morning, after Atlantic said in a statement that Blue Orca's chief investment officer Soren Aandahl's claims were "ungrounded".
The company said it bought the Saltpond and Cape Coast prospecting licences "following appropriate due diligence". The mining hopeful did underline the fact the terms of the deal meant the son of opposition politician Johnson Asiedu Nketiah would be unlikely to receive any payments from the 2.5 per cent royalty that was part of the sales price, on top of £280,000 worth of Atlantic shares.
Blue Orca's short report was largely aimed at Piedmont Lithium (US:PLL), Atlantic's partner in the Ewoyaa mine in Ghana. The US company is building a processing plant in Tennessee that will depend on the Ghanaian lithium to operate.
Beyond the payment to a company controlled by Nketiah's son, Blue Orca said Atlantic had backed the wrong family - while he used to be the chair of the country's mines and energy committee, he is now in opposition. "Authorities in Ghana, to their credit, have a history of revoking mining permits obtained via corrupt payments to the immediate family of a high-level politician," Blue Orca said.
Atlantic denied it was at risk of failing at the permit stage.
"The company believes that the Minerals Commission will grant the mining licence for the Ewoyaa lithium project and Ghana's parliament will ratify the company's mining licence in due course," the company said.
"The company has a zero-tolerance policy on bribery and corruption and, in all of its activities, operates in accordance with the most stringent levels of corporate governance internationally."
Atlantic pivoted to lithium after operating as IronRidge Resources for many years, with gold projects in West Africa as a focus. Those assets were spun off into a private company in 2021.
The arrangement between Atlantic and Piedmont hands the US company 50 per cent of the Ewoyaa project in Ghana, in exchange for spending $102mn (£86mn) on building the mine.
Atlantic said it would "seek legal advice to address the claims" made by Blue Orca.
