Co. Takes Big Step Toward Becoming a Lithium Producer
Research Report

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Disclosures for Alliance Global Partners, Atlas Lithium Corp., August 5, 2025

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Atlas Lithium Corp. (ATLX:NASDAQ) released the results of a definitive feasibility study (DFS) of its fully permitted Neves project in Brazil, "mark[ing] an inflection point on the road to lithium production," reported Alliance Global Partners Analyst Jake Sekelsky in an Aug. 5 research note. Alliance Global lowered its forecasts for near-term lithium prices to more accurately reflect current market dynamics, and this led to a US$10 reduction in its target price on the U.S.-based mining company.

"The study outlined a low-cost, open-pit lithium operation with manageable capex and strong operating margins based on anticipated operating costs outlined in the DFS," Sekelsky wrote. "Despite headwinds in the broader lithium space and continued pressure on prices, we expect Atlas to continue to judiciously move forward with development plans [for] Neves given the asset's low-cost structure and relatively limited capital remaining to cross the production finish line."

254% Return Implied

The investment bank and advisory firm's new target price on Atlas is US$20 per share, noted the analyst, which better reflects lithium prices vis-à-vis the current market. Alliance now expects lithium prices to take longer than initially thought to recover significantly. Prices should start climbing as 2026 approaches, at about the same time that Atlas will ramp up development at Neves.

In comparison to the new US$20 per share target, the explorer-developer was trading at about US$5.65 per share at the time of Sekelsky's report. From that price, the return to target is 254%.

Atlas Lithium remains a Buy.

The company has 17.84 million shares outstanding and a market cap of US$101 million (US$101M). Its 52-week range is US$3.54–12.48 per share.

Low Capex, Strong Economics

Sekelsky reported that the Neves DFS outlines a Measured resource of 8,500,000 tons (8.5 Mt) of 1.2% lithium oxide supporting an operation producing an average of 146,000 tons per annum (146 Ktpa) of SC5.5. The average production cost is an estimated US$489 per ton (US$489/ton) assuming throughput of 1.1 Mt per year. The life of mine is seven years.

As for economics, the DFS shows a net present value (NPV) of about US$540M and an internal rate of return of 145%, at an SC5.5 price of US$1,700/ton and at a break-even SC5.5 price of US$735/ton.

At US$1,200/ton SC5.5, a price more consistent with current market conditions, the NPV is about US$260M, more than double Atlas' current enterprise value, noted the analyst.

As for capex, Sekelsky pointed out, the amount needed to reach commercial production is low at US$58M given Atlas already spent about US$30M on development work. The company's US$40M offtake prepayment facility likely will cover a big part of this amount. Alliance expects that the now released DFS will generate interest among funding sources, and Atlas will be able to secure the remaining capex.

"The limited capex remaining coupled with Neves' status as a shovel-ready project place Atlas in pole position to become the next lithium producer in Brazil's lithium valley over the next year," the analyst wrote.

Expansion Potential Upside

The Neves processing facility has been at the site in Brazil since Q1/25, when it was delivered. Its initial production capacity is 150 Ktpa of SC5.5. The plant could be expanded readily to 300 Ktpa, given its modular design, at a limited incremental cost market conditions were conducive. Now, however, Alliance does not include any expansion in its model.

"[We] believe this optionality is best viewed as blue sky upside for the time being," the analyst wrote.

Catalysts on the Horizon

Alliance expects Atlas to make a development decision in H2/25 and subsequently begin commissioning work, noted Sekelsky. Neves could enter commercial production as soon as Q1/26.