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Atlas (NYSE:ATCO) Lithium Corp (NASDAQ:ATLX), a $97 million market cap mining company specialized in nonmetallic minerals, announced the termination of a material definitive agreement with RTEK International DMCC, an engineering and business development service provider. According to InvestingPro data, the company maintains a strong liquidity position with a current ratio of 2.86, though it faces challenges with rapid cash burn. The termination came into effect on Thursday, March 20, 2025, following a dispute over the fulfillment of the contract terms.
The controversy began when RTEK issued a notice on Sunday, March 12, 2025, claiming Atlas Lithium had repudiated its obligations under their agreement. Atlas Lithium contested this allegation, maintaining that the agreement was still valid. However, on March 20, the company formally terminated the contract, citing RTEK’s failure to deliver a critical updated study on time, a breach of exclusivity terms, and multiple other contractual violations.
Atlas Lithium believes there will be no early termination penalties due to these breaches by RTEK. To address the delay caused by RTEK’s non-performance, Atlas Lithium has engaged SGS (SIX:SGSN), a globally recognized entity, to prepare a Definitive Feasibility Study (DFS) for the Neves Project, which is on track for completion by mid-2025. InvestingPro analysis shows the company holds more cash than debt on its balance sheet, providing some financial flexibility during this transition period. Additionally, the company has bolstered its internal team with a Project Management Officer and a Vice President of Engineering to advance the Neves Project towards production.
This development follows Atlas Lithium’s initial engagement with RTEK, as reported in a previous SEC filing dated August 22, 2024. Despite the contractual discord, Atlas Lithium appears to be moving forward with its project development without significant setbacks.
The company cautions that this report contains forward-looking statements regarding the agreement’s termination, the DFS, and the Neves Project’s progression. These statements are subject to various risks and uncertainties, as detailed in Atlas Lithium’s Annual Report and other SEC filings. Investors should note that Atlas Lithium’s next earnings report is scheduled for March 27, 2025. InvestingPro subscribers have access to 13 additional key insights about Atlas Lithium’s financial health and market position, helping them make more informed investment decisions.
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