CleanTech is targeting near-term Lithium production in hypersaline brine found beneath slats flats in Chile and South America’s ‘Lithium Triangle’.
The company is developing three projects that have the potential to provide future revenues that dwarf CleanTech’s current market cap.
This was demonstrated this week when the company announced a 22% resource upgrade to 1.51mt LCE at the Laguna Verde asset, just one of their three projects. To put this into perspective, the entire country of China has 1.5 MT lithium resources according to the United States Geological Survey.
Anticipation has been building around CleanTech Lithium’s next steps which is clearly evident in a share price that has rallied steadily over the past month. Having built a base around 20p, the CleanTech Lithium share price recently hit 60p as investors await further evaluation of their Chilean lithium projects.
CleanTech Lithium have a clear intent: to begin production of lithium by 2024. Such a defined goal has attracted investors who are clearly impressed with CleanTech strategy, as well as their assets.
Indeed, CEO Aldo Boitano suggested that CleanTech’s portfolio has the potential to make CleanTech Lithium a world-class producer in a recent Podcast interview with UK Investor Magazine.
Direct Lithium Extraction
Located in Chile and the ‘Lithium Triangle’ of Argentina, Bolivia, and Chile, CleanTech’s Laguna Verde and Francisco Basin assets permit Direct Lithium Extraction (DLE) from underground brine.
DLE production methods produce high grade lithium offtake and provide the producer with higher margins than those associated with hard rock extraction. This stems from the ability to harness renewable energy and lower labour costs.
CleanTech Lithium Assets
CleanTech have set about evaluating their assets and are in the enviable position of not yet knowing which of their assets has the potential to be their flagship project.
Laguna Verde
The Laguna Verde project is the most advanced asset with JORC compliant resource of 1.51MT LCE. The resource now also has Indicated and Inferred resources with the Indicated resource sitting at 0.803MT. Evaluating data from three drill holes revealed LCE at a grade of 206mg/L, with grades up to 409mg/L.
An upcoming Prefeasibility Study of the Laguna Verde project is set to use a base assumption of 22,000 tonnes of battery grade lithium production per annum over 30 years of operation.
Francisco Basin
The Francisco Basin project assays revealed lithium grades of 324 mg/L with an average grade of 305mg/L. We await their maiden JORC resource in the near future and broker Fox-Davies said they believe inferred resources could exceed 2m/t LCE in a recent broker note.
Llamara
To add to Franciso Basin and Laguna Verde, the Llamara project is undergoing a drilling programme which we will learn more from later this year. The CleanTech CEO has been quietly optimistic about the Llamara project, highlighting the sheer size of the license.
Fox-Davies believe within three years there could be in excess of 5MT resource, providing CleanTech Lithium’s investors with exposure to a world-class lithium company. Comparisons could be made with ASX-listed Lake Resources and their 4.4MT Kachi project.
Kachi is also located in the ‘lithium’ triangle in Argentina and will use DLE methods powered in part by solar energy. The Kachi Defined Feasibility Study (DFS) gave the project a $1.6 billion NPV.
Unique opportunity
Having secured licenses in the Chilean Salar de Atacama, or Salar Basin, the company has established an unrivalled presence in salt flats that have favourable characteristics that allow for higher margin lithium extraction that is difficult to achieve in hard-rock spodumene.
DLE yields high grade lithium that recovers more lithium content than hard-rock alternatives by using brine reinjection techniques that captures the lithium compound before pumping the result brine back into a reservoir.
The scarcity of available assets utilising this technique means CleanTech has secured some of the last licenses with the associated geological opportunities.
Indeed, DLE is somewhat experimental, and this is reflected in the company’s £44m valuation. However, there is still a significant disconnect from Lake Resources’ valuation that currently has a market cap of A$1.47 or £850m.
Underlining the future potential for the company and the CleanTech Lithium share price, broker Fox-Davies has a 114p 1-year target and 277p 3-year target. Shares in the lithium explorer are currently trading at 55p.