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Interim Results for Six-Month Period Ending 30 June 2024
CleanTech Lithium PLC (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF), an exploration and development company advancing sustainable lithium projects in Chile for the clean energy transition, is pleased to announce its unaudited Interim Results for the six-month period ended 30 June 2024 ("1H 2024" or "the Period").
The Company has made significant progress with the Pre-Feasibility Study ("PFS") at the flagship project, Laguna Verde, and seen encouraging results from the Direct Lithium Extraction ("DLE") pilot plant in Chile and will be producing battery-grade lithium carbonate for potential strategic partners to evaluate. The Company is also pursuing a dual listing on the Australian Stock Exchange ("ASX") and aims to be trading on the ASX in Q4 2024.
Highlights of the Period:
Operational:
· Health & Safety:
o Zero-harm safety culture focused on continuous improvement to achieve an injury free and healthy work environment - no LTIs, major incidents or near misses recorded in 1H 2024.
· Laguna Verde Drilling Programme:
o Five-well resource drilling programme commenced. Work designed in collaboration with Montgomery & Associates, a leading hydrogeology and resource evaluation consultancy.
o Programme aims to produce a maiden reserves estimate using modifying factors from the Pre-Feasibility Study ("PFS") which is underway and targeted for completion by the end of 2024.
· DLE Pilot Plant:
o Operational and producing high quality lithium chloride eluate with low impurities.
o Eluate is being converted to produce batches of battery-grade lithium carbonate which will be made available to potential strategic partners in Q4 2024 to start product qualification.
o Inauguration event was held in May 2024 where local communities and government officials were in attendance.
· Project Licences:
o CTL entered into a sale and purchase agreement ("SPA"), now taking full ownership of certain Laguna Verde licences that were previously held by way of an option agreement
o The licences held in the Salar de Atacama basin, which we understand are located outside the salar area defined as strategic by the Government and have been re-named the 'Arenas Blancas' project, are a potentially very promising opportunity.
· CEOL Contracts:
o Expressions of Interest ("RFIs") for a total of five lithium projects have been submitted to the Chilean Government. CTL is very well positioned as the most advanced exploration stage company progressing DLE based projects in Chile.
o Francisco Basin project has been renamed Viento Andino, in line with the RFI submission, to highlight the project area is outside a national park of a similar name located in the basin.
Corporate:
· Board changes:
o Executive Chairman Steve Kesler assumed the duties of CEO on an interim basis, following the resignation of CEO, Aldo Boitano in April.
o The search for a new CEO is well underway and the chosen candidate will be announced in due course.
· Cash position:
o The Company's cash position at the period end, including proceeds received from Loan Notes shortly after period end, was £2.1 million.
Post-period Highlights:
Operational:
o Pump tests and a reinjection well at Laguna Verde, planned to be undertaken in Q4 2024, will help define the brine extraction and reinjection wellfield design and the sustainable production rate required for the PFS.
o A plant location study was completed by Worley for the Laguna Verde project and concluded that the DLE and eluate concentration should be undertaken at project site and the purification and carbonation close to Copiapo which is at a lower elevation with good technical support locally available. This latter plant would be expanded in the future to also process concentrated eluate from the Viento Andino project.
o Completion of the first stage of production of concentrated eluate from the Company´s DLE pilot plant which has been shipped for conversion to battery-grade lithium carbonate by process partners in North America.
Corporate:
· ASX Listing:
o The Company is seeking to dual-list on the Australian Securities Exchange ("ASX"). Although the Company announced an extension to the ASX IPO timetable on 20 September 2024, to allow it to address some procedural matters raised by ASX, the intention remains to complete the IPO before the year end. An associated capital raise is planned to enable completion of the PFS and continuance of other work programmes. Notwithstanding, the Company continues to consider its funding options on an ongoing basis as a part of its normal practice.
· CEOL Process:
o The Government has streamlined the CEOL process, announcing an update at the end of September prioritising six salt flats for lithium development including Laguna Verde, the Company's flagship project, as having the most favourable conditions to advance lithium exploration and extraction. CEOL applications to be submitted by 31st December 2024.
· Local stakeholders:
o CTL attended a seminar organised by CESCO alongside local indigenous communities. The President of the Colla Pai-Ote community publicly endorsed CTL's Laguna Verde project as the way forward for the lithium industry in Chile, which was widely reported in the Chilean media.
o CTL's DLE carousel equipment is now installed at the University of Atacama as part of an ongoing partnership. The DLE equipment will be available for research programmes. The long-term collaboration between the University and CTL will help nurture the skills required for fostering the lithium industry in the Atacama region.
Steve Kesler, Executive Chairman and Interim CEO, CleanTech Lithium said:
"The first half of 2024 has seen significant operational and strategic progress on our lithium projects in Chile. This includes the production of high quality lithium chloride eluate with low impurities from our DLE pilot plant, which has a capacity to produce one tonne per month of lithium carbonate equivalent. A drilling, pump testing and reinjection programme was started at Laguna Verde aimed at updating the JORC resource estimate, providing data for the PFS and developing of a maiden reserve estimate.
"The Company is also in the process of listing on the ASX exchange, which will support its future development, as it enters potential strategic partner discussions and progresses towards production. Whilst this process has been delayed, the ASX market is well versed in the lithium sector and a meaningful number of the Company's existing shareholders have Australian links.
"With the PFS well underway and project development ongoing, backed by the strong support from local indigenous communities and aligned with the objectives of Government's National Lithium Strategy, we look forward to the future with confidence."
CHAIRMAN AND INTERIM CEO REVIEW
The following review is a look back at the highlights from the first half of 2024:
Business Strategy
CleanTech Lithium continues to make great strides in meeting the objective of becoming a leading supplier of battery-grade lithium carbonate to support the world's transition to clean energy. The progress made towards building sustainable lithium projects in Chile where the Company is planning to use Direct Lithium Extraction ("DLE") powered by renewable energy directly addresses the Chilean Government's ambition to drive positive change in sustainability and social and economic development.
The 'National Lithium Strategy', proposed by the President of Chile in late April 2023, aims to ensure Chile remains a top producer and supplier of lithium - a critical component for batteries in Electric Vehicles and energy storage systems ("ESS"). The established mining jurisdiction is currently the largest supplier of copper in the world and one of the largest suppliers of battery grade lithium. To move to a world run on clean energy, new lithium projects are needed, and Chile has the established infrastructure, industry expertise and workforce to bring projects like CleanTech Lithium's into production in the next few years.
New projects must be built in the right way and the Government has prescribed the use of DLE (or similar sustainable technologies) for all new lithium development projects going forward. CleanTech Lithium's strategy is to play a significant role in assisting the Chilean government to achieve this ambition. The Company believes it is most the advanced development stage DLE company operating in Chile and the achievements made in the first half of 2024 is evidence of this. It is very encouraging to see the Company's DLE Pilot Plant producing samples of battery-grade lithium carbonate which will soon be tested by potential strategic partners.
The Company's business strategy is focused on delivering long-term sustainable growth and returns for all stakeholders, built on four pillars:
· develop the Company's advanced lithium projects (Laguna Verde, Viento Andino) and progress the early-stage exploration projects (Arenas Blancas and Llamara) in Chile;
· utilise innovative technologies, including DLE and, where possible, renewable energy to sustainably produce lithium carbonate;
· produce commercial battery-grade lithium carbonate with high lithium recoveries and short production time; and
· supply directly into the EV and battery storage market via strategic partners and offtake agreements.
To this end, the Company's immediate objectives are as follows:
· update the JORC resource estimate for Laguna Verde on completion of the 2024 drilling campaigns and declare a maiden reserves estimate;
· complete planned hydrogeological studies and metallurgical tests at Laguna Verde, including completing a new reinjection well and pump tests to provide the data required to further advance modelling of the sub-surface aquifer and design the extraction and reinjection wellfields;
· deliver a Pre-Feasibility Study ("PFS") at the Laguna Verde Project and commence the Definitive Feasibility Study ("DFS") soon afterwards;
· complete the process test work at the DLE Pilot Plant and make battery grade lithium carbonate available for supply to potential offtake and strategic partners to start product qualification;
· continue the required work to complete the environmental baseline studies that commenced in 2022 and undertake the studies required to enable submission of the EIA in 1H 2025;
· enter into a Special Lithium Operation Contract (CEOL) with the Chilean State in relation to the Laguna Verde and Viento Andino Projects to commercially sell lithium;
· continue to collaborate with the local indigenous communities, universities and other local stakeholders to ensure long-term support for the projects, and
· enter into substantive discussions with potential offtake and strategic partners with a view to reaching agreement on a future business relationship, including establishing a funding package for the construction phases of the Laguna Verde Project, including equity participation, debt and other structures, to bring the project on stream and start selling lithium carbonate at the earliest possible opportunity.
Summary of Company Activity
In the first six months of the year, CleanTech Lithium made further progress toward delivering its PFS. This included commencing a five-well drilling programme at Laguna Verde, the commissioning of its DLE pilot plant and first production of highly concentrated eluate for further processing to make battery-grade lithium carbonate. The PFS is instrumental to support discussions with potential strategic partners. The Company is also seeking to dual-list on the Australian Securities Exchange ("ASX"). Although the Company announced an extension to the ASX IPO timetable on 20 September 2024, to allow it to address some procedural matters raised by ASX, the intention remains to complete the IPO before the year end. Notwithstanding, the Company continues to consider its funding options on an ongoing basis as a part of its normal practice.
Operations
Health and Safety
The Company maintains a zero-harm safety culture focused on continuous improvement to achieve an injury free and healthy work environment, with no lost time incidents ("LTIs"), major incidents, or near misses reported in the first half of 2024.
Five-Well Drilling Programme at Laguna Verde
The Company commenced a five well drilling programme at Laguna Verde largely aimed at converting Inferred resource to additional Measured & Indicated resource which will then have technical and economic modifying factors applied from the PFS to determine a maiden reserve. The programme was designed in collaboration with Montgomery & Associates, a leading international hydrogeology and resource evaluation consultancy.
The drill programme began in Q1 2024, with the commencement of wells LV07 and LV11 and suspended in May on the onset of the winter shut-down period, with the plan to recommence in October. The programme will also include additional pump testing and reinjection testing in Q4 2024 with results helping to calibrate the hydrogeological model of the basin. This model will help further define the brine extraction and reinjection wellfield design and the sustainable production rate from Laguna Verde. Montgomery & Associates have been engaged to manage the drill programme, JORC resource and reserves reporting and design of the extraction and reinjection wellfields.
Laguna Verde is the Company's most advanced project and has a total JORC resource of 1.8 million tonnes LCE, of which 1.1 million is in the Measured and Indicated category. Laguna Verde's Scoping Study, announced in January 2023, highlighted robust economics, with an NPV8 of US$1.8bn, an IRR of 45.1%, net cashflows of US$6.3 billion and a low operating costs of US$3,875/t for 30 years of production at 20,000 tpa LCE.
Drilling programmes at Laguna Verde since 2022
DLE Pilot Plant Commissioning and Production
The Company´s one-tonne per month DLE pilot plant (supplied by Sunresin) is located in Copiapó, Chile, approximately 250km from Laguna Verde, and finished commissioning in late March. At the R&D centre where the pilot plant is located, brine from the Laguna Verde project is stored in a large 243,000 litre vessel outside the pilot plant and then fed into an indoor tank having passed through filtration to remove suspended solids. It is then fed into the DLE columns shown in the image below, which are filled with adsorbent designed to be selective for lithium molecules. Lithium, as lithium chloride, is adsorbed from the brine, before desorption with water to create a purified lithium chloride eluate.
DLE Pilot Plant at R&D Centre in Copiapó, Chile (30 x approx. 3m columns to produce up to 1 tonne per month of LCE)
Testing of a wide range of commercially available adsorbents identified that the adsorbent supplied by Lanshen performed the best on the Laguna Verde brine resulting in the selection of this adsorbent. The DLE Pilot Plant commenced operation in Q2 2024, producing high quality concentrated eluate. In May, the Company reported the key DLE performance metrics for the first batch of 24m3 of concentrated eluate produced at the pilot plant. The recovery of lithium from the brine was 94% in the adsorption stage and 88% into the eluate. The lithium grade in the feed brine of 197mg/L was concentrated to 710mg/L in the eluate, or a 3.6X concentration factor. These results exceeded the Company's expectations. The eluate was further concentrated by reverse osmosis to 2,194mg/l.
For the first stage of production, a total volume of 1,196m3 of brine from the Laguna Verde Project was processed at the DLE pilot plant with a total of 14 cycles completed. Each cycle represents a volume of brine being fed first through filtration to remove suspended solids, then into DLE columns which are filled with adsorbent designed to be selective for lithium molecules. Lithium, as lithium chloride, is adsorbed from the brine, before desorption with water to create a purified lithium eluate.
Averaged across the 14 cycles, the recovery rate achieved by adsorption of lithium from the brine was 95% and the recovery rate of desorption from the adsorbent was 93%. The total recovery rate into eluate averaged 88% and was highly consistent as shown in the figure below. The temperature of the brine and desorption water, using the average ambient temperature in Copiapó during the March to June period of operation, was in the range of 20oC to 25oC indicating that good performance was achieved without the need to heat solutions in either adsorption or desorption.
Pilot Plant Total Recovery Rate
The eluate production rate was relatively stable after the initial ramp up period achieving an average of 2.8 kg LCE per hour demonstrating that the design capacity of the pilot plant of 1 tonne LCE per month was comfortably achieved. Selectivity of the adsorbent is another key performance parameter for a DLE operation. DLE primarily acts as a purification stage, recovering lithium chloride from the brine whilst rejecting other impurities. For all the major ions in the brine, apart from boron, the rejection rate was very high, exceeding 99%.
DLE Performance - Rejection of Major Impurities
The downstream conversion of lithium chloride solution to battery grade lithium carbonate is well established in the lithium industry. Rather than spending capital on constructing a lithium carbonate conversion plant, the Company decided to partner with Conductive Energy, an Alberta, Canada company to undertake this conversion at its existing facility in Chicago.
An initial 200L batch of concentrated eluate, was shipped to Conductive Energy in May. This batch was used as a trial before setting up the conversion process that would be used for processing larger volumes of eluate produced by our DLE pilot plant into battery grade lithium carbonate. Conductive Energy completed the set-up test-work producing lithium carbonate of 99.75% purity which is battery grade. This process comprises concentration of the concentrated eluate to 18,000mg/l Li by forward osmosis followed by ion exchange to remove the trace impurities of calcium, magnesium and boron and then carbonation with sodium carbonate to produce battery grade lithium carbonate.
On completion of this trial, the Company subsequently shipped batches of concentrated eluate from the pilot plant, with a total of 88m3 shipped by late July, which is equivalent to approximately one tonne of lithium carbonate.
The downstream plant is being commissioned with lithium carbonate production expected in October 2024. This will provide the Company with the capacity to supply significant quantities of battery-grade lithium carbonate samples to potential strategic partners and offtakers to commence product qualification.
Pilot Plant Inauguration
In May, the DLE pilot plant was officially inaugurated in Copiapó with a ceremony attended by various regional authorities, indigenous community leaders, academics, and business representatives. Attendees at the ceremony included the Presidential Delegate of the Atacama Region, Luis Pino, Regional Councillor Javier Castillo; CORFO Director Rosa Roman, CORPROA President Andres Rubilar; miners' union president Joel Carrizo; indigenous community representatives Christian Milla and Ercillia Araya.
