CleanTech Lithium (CTL ), a Chile-focused lithium explorer, updated markets on FY22 performance. CleanTech is developing 3 lithium projects in Chile, at Laguna Verde, Francisco Basin, and Llamara.
Operational highlights
CleanTech incurred £4.5m in main capex on work programmes in 2022. CleanTech's development of wholly owned Laguna Verde and Francisco Basin projects in Chile yielded a total lithium resource of over 2 million LCE through two drilling programmes in 1H 2022.
The scoping study at Laguna Verde demonstrated the potential for a multi-decade commercial (20,000tpa) lithium operation with an operating cost of US$3,875 per tonne of lithium carbonate.
CleanTech's direct lithium extraction (DLE) test produced a 1kg sample of battery-grade lithium in June 2022. DLE is a greener method of lithium extraction that is in increasing demand in the EU and North America.
CleanTech also applied for 119 new exploration licences for its new Llamara project, taking total project holding in Chile to over 500km2.
Corporate and financial highlights
The company raised £17.9m in total in 2022. Having listed on London's AIM market after raising £5.6m in March 2022, it then raised an additional £12.3m in October 2022 to fund its 2023 work programme. An ASX listing is planned for early Q3 2023.
CleanTech had £12.4m in cash at year-end 2022.
2023 highlights
Exploration licenses were granted for Llamara in Q1 2023 and the first exploration drilling campaign commenced in Q2 2023.
At Laguna Verde and Francisco Basin, further resource drilling is underway to upgrade the resource base, due to be completed in Q2 2023. A pre-feasbility study commenced at Laguna Verde in March 2023, targeted for completion in late 2023.
CleanTech expects to commission a DLE pilot plant by mid Q3 2023, targeting 1 tonne per month of LCE.
View from Vox
Since listing on AIM in March 2022, CleanTech has moved at a fast pace through its work programmes at Laguna Verde and Francisco Basin and added a third asset at Llamara. The funds raised in the listing funded work programmes that revealed a compelling investment case based on a 2 million tonnes of lithium carbonate (LCE) resource.
The scoping study at Laguna Verde in particular reaffirmed the project's value. With an operational life of over 30 years at an estimated 20 tonnes/annum of lithium carbonate from an estimated resource of over 800Mt (measured + indicated), and a total recovery rate of 85.2%, the asset is shaping up to be profitable for years to come.
Further supporting the project's economics is a low operating cost of $3,875/tonne and a low capex of US$383.6m, underpinning a post-tax NPV of US$1.83bn and IRR of 45.1%, with a payback period of 1 year and 8 months. The costs are competitive even in comparison with projects using traditional extraction processes (solar evaporation).
CleanTech, however, is betting on DLE. It is a greener extraction method that minimises aquifer depletion and has a smaller geographical footprint than conventional evaporation brines. In addition to employing DLE methods, CleanTech has committed to using 100% renewable energy in processing LCE, and is therefore an attractive option for clients, investors, and governments that have set net zero goals. The pilot DLE plant is due for commissioning in Q3 2023, targeting 1 tonne per month of LCE.
It should be noted that CleanTech's Chilean assets will be supported by the country’s newly unveiled National Lithium Strategy as the government seeks public-private partnerships to accelerate sustainable lithium production. The advantages of DLE have led the Chilean government to declare that all future lithium brine projects in Chile should use the technology. The government already owns and leases specific salars which are seen as "strategic", such as in Salar de Atacama. CleanTech's assets are not impacted by this.
CleanTech will have a busy rest of 2023. Investors should note further upgrades to the resource base at Laguna Verde and Francisco Basin expected in Q2 2023. A pre-feasibility study at Laguna Verde is targeted for completion in late 2023. The abovementioned DLE pilot plant should be operational by mid Q3 2023. And an ASX listing is planned for early Q3 2023.
The company is well-funded with £12.4m in the bank at year-end following October's fundraise. Based on results so far, CleanTech is well-positioned for continued growth in 2023 and beyond, and on track to deliver green lithium by 2026. CTL shares are currently up 43% in the past year.
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