Most companies in the S&P/ASX All Ordinaries Index (ASX: XAO) are relishing in widespread buying pressure on Tuesday. A total of 332 out of the top 500 companies included in the benchmark are experiencing higher prices as we approach midday — paving the way for the fourth positive session in a row.
While it's a solid day for companies broadly, one little lithium explorer stands out among the best-performing. So, why is Atlantic Lithium Ltd (ASX: A11) getting an outsized boost on the ASX boards on Tuesday?
Let's take a look.
Ticking boxes on Ewoyaa lithium project
At the time of writing, shares in Atlantic Lithium are up a staggering 16% compared to the 0.8% of the broader index.
The only other constituents of the ASX All Ords delivering performances in the same ballpark are Brainchip Holdings Ltd (ASX: BRN), Patriot Battery Metals Inc (ASX: PMT), and a few other lithium miners.
The electric pulse for Atlantic Lithium stems from an announcement this morning pertaining to its Ewoyaa lithium project in Ghana. Pegged to become the country's first lithium mine, Ewoyaa is estimated to hold 35.5 million tonnes of resources at 1.25% lithium oxide.
Today, the company revealed that the Ghana Environmental Protection Agency (EPA) has authorised two transmission lines to be diverted from the Atlantic's planned mining area. The lines are currently strung across the Mankeesim prospecting licence.
As stated by the company, "The planned diversion of the transmission lines forms part of the project's mine plan and represents an important step as the company advances Eqoyaa towards shovel readiness."
Evidently, investors are elated upon discovering another step forward towards kicking off early works on the project. The less time it takes to reach production, the less dilution investors might need to experience.
At the end of June 2023, Atlantic Lithium held $15.3 million in cash. However, nearly $7 million of cash flowed out of the company over the last 12 months.
Why is this ASX All Ords share still lagging?
Today's jump is impressive by all measures. Yet, the company's share price is still 28.5% in the negative compared to a year ago. For context, the ASX All Ords index is 5.3% higher over the past year.
What is causing the discrepancy in performance?
Atlantic Lithium is not the odd one out when weighed up against birds of the same feather. For example, both Pilbara Minerals Ltd (ASX: PLS) and Core Lithium Ltd (ASX: CXO) have suffered over the past year despite their profitability.
There's a good chance the Atlantic Lithium share price has succumbed to the obliterated going rate for the popular battery commodity.
The reality is lithium producers, and future producers, are price-takers. That means the earnings potential of these companies changes in tandem with the underlying commodity.
Unfortunately for Atlantic Lithium, the price of lithium carbonate has crashed almost 70% over the last year.
Given such an extensive revision in potential earnings, it would be hard for any ASX All Ords to fend off a fall.
