TIDMCTL
RNS Number : 2129O
CleanTech Lithium PLC
29 September 2023
29 September 2023
CleanTech Lithium PLC ("CleanTech Lithium" or "CTL" or the
"Company")
Auditor Reviewed Interim Results for six-month period ending 30
June 2023
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 Interim Results for the six-month period ended 30 June
2023 ("1H 2023" or "the Period"), which have been subject to
auditor review, a copy of which will be made available on the
Company's website https://www.ctlithium.com
The Company has undergone an extensive work programme across
three projects during the Period and has also now added a new
project to its portfolio.
Highlights of the Period:
-- Strategy: Continue to deliver on mission to produce battery
grade lithium and be a leading supplier of green lithium to the EV
and battery manufacturing market.
-- Health & Safety: 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 2023.
-- Laguna Verde Scoping Study:
o Study completed in January 2023 which confirms the potential
of the project to become a major new sustainable lithium supplier
with robust economics - showing an NPV of US $1.83bn and IRR of
45%, based on an 8% discount rate.
-- Expansion:
o Licence areas at Laguna Verde increased to 217 km(2) and at
Francisco Basin to 127 km(2)
o Further licenses for the Llamara greenfield exploration
programme granted, now covering a total area of 605 km(2)
o In June, a new exploration project in the Salar de Atacama
basin, the leading lithium production base in the world, with
licence applications covering an area of 377 km(2)
-- Drilling Activity :
o Laguna Verde:
o Assays from re-sampling of well LV02 received, with an
improvement in average lithium grade to 203mg/L and a peak grade of
417mg/L lithium.
o Two additional wells drilled at LV05 and LV06 to extend the
JORC resource
o Francisco Basin: All three new wells planned for the 2023
drilling campaign completed and two additional wells were added to
the programme to further test the extension of the resource.
o Llamara: Maiden exploration well completed, brine samples
depleted in lithium. Samples taken from surface evaporite mineral
results pending, next stage of exploration to be further
evaluated.
o In total, ten (10) wells were drilled across three projects in
the Period, understood to be the most extensive drilling activity
for lithium in Chile over the past few years.
-- Hydrogeological Test-work:
o Laguna Verde
o Completed pump test programme on two wells, recording flow
rates that support the projects' brine extraction model.
o Commenced brine reinjection test, first of its kind in Chile
and a key part of the green credentials of Direct Lithium
Extraction and minimising environmental impact
o Francisco Basin
o Completed pump test programme on one well, recorded high flow
rate supporting the projects' brine extraction model.
Corporate:
-- Trading: Commencement of trading on the OTCQX Venture Market
in late May 2023, providing efficient access for U.S. investors and
increased liquidity for shareholders.
-- Board changes
o Steve Kesler moved to the position of Executive Chairman to
provide support and relevant experience to CEO, Aldo Boitano.
o Appointed two Non-Executive Directors, Maha Daoudi and Tommy
McKeith, further bolstering the strength and experience of the
Board.
-- ESG Committee: Formation of an ESG Committee, reporting to
the Board, to ensure the Company is being held accountable across
all ESG factors. First meeting held on 30 June 2023.
-- Cash position as at 30 June 2023 : GBP4,638,749
-- Exploration and Evaluation costs : GBP5,481,243
Post-period Highlights:
-- DLE Pilot Plant: Ordered in 1Q 2023 and c urrently being
assembled at Company facility in Copiapó, designed to produce up to
1 tonne per month of lithium carbonate equivalent (LCE).
Commissioning expected to complete before end 2023 with operations
commencing thereafter
-- CEOL Applications: Submitted applications for the special
lithium operation contracts (CEOLs) to the government of Chile for
Laguna Verde and Francisco Basin in September 2023 - an important
milestone towards commercial production of lithium from the two
projects. Discussions to progress the CEOL applications to continue
with the relevant authorities over the next 3-6 months.
-- Laguna Verde:
o A JORC Compliant resource upgrade was announced in July 2023
with a resource estimate of 1.8 million tonnes
of LCE at a grade of 200 mg/L. 63% of the estimate is now in the Measured & Indicated category.
o A pre-feasibility study (PFS) now in progress led by the
internationally recognised engineering company, Worley. The PFS
will enable substantive discussions on strategic partners, offtake
and financing to commence and is due to complete in 1Q 2024.
-- Francisco Basin:
o A JORC Compliant resource upgrade was reported in August 2023
with a resource estimate of 0.92 million tonnes of LCE at an
average grade of 207 mg /L. 48% of the estimate is in the Indicated
category, and the remining portion is Inferred.
o Scoping Study was completed in September 2023 which provided
added confidence to the viability of project. The study reported
the project has an NPV of $1.1 billion and an IRR of 43.5%, at an
8% discount rate.
-- Salar de Atacama:
o 140 exploration mining concession applications registered
which are expected to be granted in approximately Q1 2024.
o The licence area totals 337 km(2) , within the leading lithium
production basin in the world.
o Any technical work planned will be undertaken in consultation
with local communities.
Aldo Boitano, Chief Executive Officer, CleanTech Lithium said:
"It has been a period of transformative progress to date as we
continue to explore and develop our lithium projects in Chile
towards first production of sustainable battery grade lithium.
"Notably, we completed Scoping Studies for our Laguna Verde and
Fransisco Basin projects, highlighting the robust and attractive
economics for two 20,000tpa lithium carbonate production projects
utilising DLE operations and renewable energy for power, with the
aim of producing lithium with a low environmental footprint for the
EU and US markets. We also increased our JORC resources on both
projects, especially in the more robust Measured & Indicated
categories. Our two flagship projects have a combined NPV of
approximately US$3billion and an IRR of more than 43% for each
project, with scope to improve these excellent economics
further.
"In addition, our DLE pilot plant is under construction in
Copiapó, and special lithium operating contracts (CEOLs) have been
successfully submitted for both projects, two key milestones. A PFS
is underway at our Laguna Verde project. For the remainder of 2023
and beyond we remain committed to delivering on our active work
programmes and path to production. We also continue to work towards
the planned ASX listing in Australia in the coming months, a
process taking up quite a bit of management time.
"I would like to take this opportunity to thank our dedicated
team, who continue to work tirelessly in the pursuit of our vision
- to be a leading supplier of 'green' lithium for the clean energy
transition."
Chairman and Chief Executive Officer's Review
The following review is a look back at the highlights from the
first half of 2023:
Business Strategy:
CleanTech Lithium is an exploration and development company with
brine-based lithium projects in Chile and its purpose is to produce
commercial quantities of lithium in a cleaner way by adopting
Direct Lithium Extraction (DLE) technology, powered by Chile's
existing renewable energy grid. CTL plan to supply 'green' lithium
for the batteries that power electric vehicles (EVs) and support
the global clean energy transition. The Company is carrying out
active work programmes across four assets where we hold (either
directly or under option) 100% of the licences to explore. In
total, CTL has a JORC compliant resource of 2.7 million tonnes of
lithium carbonate equivalent (LCE) with promising economics
following recent scoping studies for the Company's two main
projects: Laguna Verde and Francisco Basin. Laguna Verde has a net
present value (NPV8) of US $1.8 billion and an IRR of 45% and is
now in Pre-Feasibility Study. CTL's second project, Francisco
Basin, a year behind Laguna Verde, has a NPV8 of US$1.1 billion and
an IRR of 43.5% and will move into Pre-Feasibility Study mid-2024
following the upcoming new drilling campaign to increase resource
size.
In the 18 months to 30 June 2023, we have spent over US $15
million in Chile, an amount which is expected to grow to over US
$20 million by the end of 2023. Part of this investment has seen
the arrival of our US $2 million DLE pilot plant which is being
assembled at our facility in Copiapó which will treat the brine
samples from Laguna Verde and Francisco Basin. The plant will
extract lithium from the brine and produce a purified concentrated
eluate that will feed the downstream process to deliver 1 tonne per
month of lithium carbonate equivalent (LCE) for product
qualification by potential partners. Commissioning of the plant is
expected to be finalised in Q4 2023.
CTL operates in Chile, a country that has a long mining history
and the largest lithium reserves in the world. The infrastructure
and technical capacity of the people are in place to accelerate
lithium production and contribute greatly to the lithium supply
that is required to decarbonise transport and help reach global
net-zero targets. The Government of Chile is focused on driving a
green economy which complements CTL's stated objective of becoming
a leading supplier of 'green' lithium. The National Lithium
Strategy, which was announced in April 2023, will see public and
private partnerships being formed to ensure Chile remains a top
producer of lithium, together with the use of DLE (or similar
sustainable technologies) for all new lithium development projects
going forward. We plan to play a major role in achieving this
ambition.
To achieve this, the Company's strategy is focused on delivering
long-term sustainable growth and returns for all stakeholders,
built by CTL's four pillars:
-- Develop prospective lithium projects (Laguna Verde, Francisco
Basin, and potentially Llamara and Salar de Atacama) in Chile;
-- Utilise proven sustainable technologies (including DLE and
renewable energy to power operations);
-- Produce commercial battery-grade lithium with a shorter delivery time;
-- Supply directly into the EV market through strategic partner and offtake arrangements.
Summary of project activity
In Q4 2022, a Scoping Study was completed for Laguna Verde and
the results were declared in early January 2023, demonstrating
robust economics which were based on the JORC Compliant resource
estimates published in September 2022. A further JORC Compliant
resource upgrade was made in July 2023 with a resource estimate of
1.8 million tonnes of lithium carbonate equivalent (LCE) of which
39% moved to the Measured & Indicated category, with 63% of the
JORC resource now being in that category. A pre-feasibility study
(PFS) for Laguna Verde is now in progress led by the
internationally recognised engineering company, Worley. This PFS,
due to complete in early 2024, will enable substantive discussions
on strategic partners, offtake and financing to commence.
In Q3 2023, a Scoping Study was completed for the second
project, Francisco Basin, and the results declared in September
2023, which provided added confidence to the viability of the
project. Francisco Basin has an NPV of US $1.1billion and an IRR of
43.5%. This momentum continues with the ordering of the DLE Pilot
Plant in Q2 2023 from PuriTech, a subsidiary of Sunresin, that we
aim to have up and running in Q4 2023 with the intent to produce up
to 1 tonne per month of LCE.
CleanTech Lithium's success as a business is shared with its key
stakeholders and the Company recognises the long-term relationships
it must nurture to create a long-term sustainable business. Part of
CTL's plan involves an early engagement strategy with local
communities and the Chilean government to continue CleanTech's
licence to operate as the Company grows. Following discussions with
government representatives, CTL submitted applications for the
special lithium operation contracts (CEOLs) to the government in Q3
2023. These operating contracts will be an important milestone
towards commercial production of lithium from the two projects;
Laguna Verde and Francisco Basin. Approval will help the Company
secure investment for the construction of the Projects thus
contributing to the future supply of sustainable lithium from Chile
to the global battery market for the clean energy transition.
Path to production
The first half of 2023 saw the expansion of CTL's resources by
conducting successful drilling campaigns and this has been
supported by the Company's ongoing engagement with local
communities and Chilean state entities. The demand for lithium
remains high and with this comes responsibility to produce and
supply lithium in the cleanest way possible for the intended
benefits of electrified decarbonised transport.
CleanTech Lithium's projects, Laguna Verde, Francisco Basin,
Llamara and the new addition of Salar de Atacama span over 1,250
km(2) in the lithium triangle in Chile, the world's centre for
battery-grade lithium. Laguna Verde and Francisco Basin are c.300km
by road from the mining centre of Copiapo in the Atacama region of
Chile, Llamara and Salar de Atacama are about 600km and 550km
respectively north of Copiapó .
Laguna Verde
Key developments:
-- Scoping Study completed and announced early January 2023
demonstrating robust economics - NPV8 of US $1.8 billion and an IRR
>45%.
-- Pre-Feasibility Study (PFS) for Laguna Verde commenced in
March 2023, with Worley and is targeted for completion in early
2024.
-- JORC-Compliant resource upgraded from 1.5 million tonnes to
1.8 million tonnes of LCE announced in July 2023, with a 39%
increase in the Measured and Indicated category which is being used
in the PFS to reaffirm project's logistics and capital
requirements.
-- Environmental Baseline studies commenced in April 2022 for
the Environment Impact Assessment (EIA)
The Company started the year by adding three drill holes at the
Laguna Verde project, as shown in Figure 1 below. Resource drill
holes LV04 - LV06 were completed with the aim of upgrading the
initial resource estimate made from LV01 - LV03. Sites LV05 and
LV06 are important locations with respect to the Laguna Verde
resource model, aligning with the deepest sections of the model and
being most representative of the sub-surface resource directly
beneath the footprint of the laguna. After the drilling campaign
finished, in July 2023, the Company announced an upgraded JORC
resource estimate increasing from 1.5 million tonnes to 1.8 million
tonnes of LCE at an average grade of 200mg/L lithium.
Fig 1: Laguna Verde Resource Drill Programme Map
This upgrade included a significant increase (39%) in the
Measured and Indicated resources to 1.1 million tonnes LCE,
including a large increase (174%) in the Measured category. The
increased Measured and Indicated resources are being used in the
PFS.
In January 2023 results of a Scoping Study undertaken by
Ad-Infinitum, a Chilean engineering services company/technical
consultant with over 30 years of experience in the lithium sector
with clients including SQM, Albemarle and Galan Lithium, were
announced. This study, which was based on the previous resource
estimates of 1.5 million tonnes of LCE, considered a base case
production rate of 20,000 tonnes per annum of battery-grade lithium
over a 30-year period and demonstrated robust economics.
A summary of the outcomes for key operational and economic
analysis metrics derived from the completion of the scoping study
are presented in the table below.
Key Operating Metrics Unit Study Outcome
Production Rate of Lithium Carbonate Tonnes per annum 20,000
------------------ ---------------
Operational Life Years 30
------------------ ---------------
Resource (Measured + Indicated) Thousand tonnes 802.6
------------------ ---------------
Construction Period Years 1.5
------------------ ---------------
Recovery rate - Direct Lithium Extraction % 90.4
------------------ ---------------
Recovery rate - Concentration stages
& chemical plant % 94.2
------------------ ---------------
Recovery rate - Total % 85.2
------------------ ---------------
Key Financial Metrics
------------------ ---------------
Capital Cost (including 10% contingency) US$ Million 383.6
------------------ ---------------
Operating Cost US$ / tonne Li2CO3 3,875
------------------ ---------------
Forecast Curve
Lithium Price (Lithium Carbonate)) $US/tonne (*)
------------------ ---------------
Accumulated Net Cashflows Over Operational
Life US$ Billion 6.3
------------------ ---------------
Payback Period Years 1 year 8 months
------------------ ---------------
IRR Post-Tax % 45.1
------------------ ---------------
NPV Post-Tax (Discount Rate = 8%) US$ Billion 1.83
------------------ ---------------
NPV Post-Tax (Discount Rate = 10%) -
Sensitivity Analysis US$ Billion 1.43
------------------ ---------------
Note (*) - long-term LCE price from Canaccord of US$22,500 per
annum from 2026
Table 1: Laguna Verde key operational and economic analysis
metrics from Scoping Study Jan 2023
Pumping test at Laguna Verde
The Company also carried out fixed duration pump tests at LV05
and LV06. Based on the flow rate and aquifer response a
transmissivity for LV05 and LV06 was calculated as 27.1 m(2) and
22.6m(2) per day respectively, which should allow a commercial bore
flowrate to be approximately 30L/s. This is in line with the flow
rate of extraction bores used in the completed Scoping Study for
Laguna Verde. A hydrogeology study also commenced Q4 2022 to allow
modelling of water flows in the basin and enable extraction and
reinjection wells to be best located.
CleanTech Lithium commenced the environmental baseline studies
in April 2022 using international specialist service provider,
MYMA. Work has progressed well, and we will undertake the EIA based
on the project design that will come out of the PFS and then work
with the relevant regulatory authorities to obtain environmental
approvals.
Francisco Basin
Key developments:
-- Scoping Study completed and announced September 2023 which,
like Laguna Verde, also showed robust economics - NPV8 of US $1.1
billion and an IRR 43.5% for a production rate of 20,000tpa lithium
carbonate and an operational life of 12 years based on the current
resource.
-- JORC-Compliant resource of 0.5 million tonnes of LCE
announced October 2022 has been updated and almost doubled to 0.9
million tonnes of LCE as reported in August-2023.
-- Extensive drilling campaign completed in 1H 2023, involving
the completion of five wells - FB02 - FB06 with another campaign
planned for Q4 2023.
-- Pump test at well FB01 supported the scoping study well design of 30l/s.
In October 2022, the Company announced a maiden JORC compliant
resource of 0.53 million tonnes LCE at an average grade of 305mg/L,
based on the first well result at Francisco Basin. To increase the
resource and upgrade it to a higher confidence level, a drill
programme of 5 additional wells was undertaken in the first half of
2023. The location of wells completed in 2022 and 2023 are shown in
Figure 2.
Fig. 2: Francisco Basin Resource Drill Programme Map
The 2023 resource estimate showing the key inputs in the
calculation and the change vs the previous 2022 estimate is shown
below in Table 2. The upgraded resource estimate represents an
increase in the total estimated resource of 74% to 0.92 million
tonnes LCE and includes an upgrade to 0.44 million tonnes in the
Indicated category. This represents a large increase in the
confidence level of the resource estimate.
Table 2: Updated JORC Resource Estimate 2023
A further drilling campaign is planned to start Q4 2023 to
further increase the resource and its quality.
In addition, we carried out a fixed duration pump test at FB01.
This supported the use of a 30 l/s well design for the scoping
study.
Fig 3: Pictures of FB01 Pump Test in Progress
The Francisco Basin Scoping Study was undertaken by
Ad-Infinitum, the same Chilean engineering company which conducted
the Laguna Verde Scoping Study. This study was based on the
resource estimate of 0.9 million tonnes of LCE and supports the
project's development which is a year behind the Company's first
project, Laguna Verde. It considers a production rate of 20,000 tpa
lithium carbonate and the same DLE technology as for Laguna Verde.
However, the current resource limits operational life to 12 years.
The additional drilling is expected to increase resource and allow
a longer operational life.
A summary of the outcomes for key operational and economic
analysis metrics derived from the completion of the scoping study
are presented in the table below.
Key Operating Metrics Unit Study Outcome
Tonnes per
Production Rate of Lithium Carbonate annum 20,000
--------------- ----------------
Operational Life Years 12
--------------- ----------------
Resource Utilised (Indicated & Inferred)
- Total Thousand tonnes 236.0
--------------- ----------------
Resource Utilised (Indicated) - 68% Thousand tonnes 160.5
--------------- ----------------
Resource Utilised (Inferred) - 32% Thousand tonnes 75.5
--------------- ----------------
Construction Period Years 1.5
--------------- ----------------
Recovery rate - Direct Lithium Extraction % 94.8
--------------- ----------------
Recovery rate - Concentration stages
& chemical plant % 90.0
--------------- ----------------
Recovery rate - Total % 89.3
Key Financial Metrics
Capital Cost (including 20% contingency) US$ Million 450.0
--------------- ----------------
US$ / tonne
Operating Cost Li2CO3 3,641
--------------- ----------------
Forecast Curve
Lithium Price (Lithium Carbonate)) $US/tonne (*)
--------------- ----------------
Accumulated Net Cashflows Over Operational
Life US$ Billion 2.5
--------------- ----------------
Payback Period Years 2 years 7 months
--------------- ----------------
IRR Post-Tax % 43.5
--------------- ----------------
NPV Post-Tax (Discount Rate = 8%) US$ Billion 1.09
--------------- ----------------
NPV Post-Tax (Discount Rate = 10%)
- Sensitivity Analysis US$ Billion 0.89
------------------------------------------- --------------- ----------------
Note (*) - long-term LCE price from Canaccord of US$22,500 per
annum from 2028
Table 3: Francisco Basin key operational and economic analysis
metrics from Scoping Study
Environmental baseline studies are also underway, utilising the
same consultants, MYMA, as we have partnered with for Laguna Verde.
We anticipate commencing our PFS at Francisco Basin in mid 2024
following completion of the upcoming resource expansion drilling
campaign.
Exploration upside projects:
Llamara
Key developments:
-- Drilling campaign at Llamara commenced in April 2023, with
drill hole LL01 reaching depths to 292m.
-- Historic oil and gas exploration geophysics indicated the
presence of a highly saline aquifer but did not encounter gas.
However, the Company encountered gas at modest low pressure and
flow rate, and, for safety reasons, the Company closed the well and
commenced a second drill hole LL02 in May 2023.
-- Brine samples collected from the first well were depleted in
lithium while the first batch of surface samples recorded minor
lithium enrichment along with high grades of boron. Samples taken
from second drill with results pending and further exploration
being considered .
Towards the end of 2022, we applied for exploration licenses of
a basin area, Salar de Llamara, spanning 605km(2) and 600km north
of the two other projects, adding a third project, Llamara.
In April 2023, a drill rig was mobilised to the project with
drilling of the maiden exploration drill hole, LL01. Drilling of
LL01 progressed rapidly with good core recovery to 292m. At 290m,
drilling transitioned from dense clays to a porous sandstone.
In this sandstone layer, brine was recorded along with a flow of
gas which was unexpected based on regional geology. Historically
there have been four deep oil and gas exploration holes drilled
within the basin which did not record gas. As the gas was present
at a shallow depth, the pressure and flow rate were modest,
however, for safety reasons, it necessitated the well to be
closed.
A second drill hole (LL02) was completed to a depth of 550m.
Brine was intersected at 395m and a total of eight brine samples
were collected from the start of the aquifer to the bottom of the
well. The samples were submitted for analysis to ALS Chile with
results showing low grades of lithium.
Sediment samples collected from the LL02 drill core were also
analysed for lithium and showed a rising trend with depth, with the
final sample taken at approximately 545m depth recording the
highest value of 120ppm Lithium, indicating that there is an
increasing trend of lithium with depth and that the brine aquifer
below the 550m end of hole may have higher prospectivity.
Fig 4: Lithium Grade of Sediments Collected from LL02 Core
Samples
The sampling programme on the surface evaporite deposit was
completed with a total of 23 samples collected. There were two
geologically distinct types of samples collected, the first
characterised as loose sediment samples and the second being the
hard evaporite mineral. Laboratory analysis has been completed on
the loose sediment samples which showed minor lithium enrichment of
up to 106ppm Lithium, while high boron grades were notable with
three of the samples exceeding 20,000ppm Boron. Laboratory results
are pending for the hard evaporite mineral samples which in the
view of the Company's geology team, will be more prospective for
lithium. On receiving the final evaporite mineral sample results,
the Company will evaluate and consider the next steps.
Salar de Atacama
Key developments:
-- Applications lodged and now registered for new licences
covering a total area of 377 km(2) in the Salar de Atacama basin,
the leading lithium production base in the world
-- A geophysics programme has commenced with the first completed
section identifying a subsurface brine aquifer target
-- Any technical work planned will be done so in consultation with local communities
From June to August 2023, the Company submitted applications
over areas in the Salar de Atacama basin as shown in Figure 5. The
applications, covering a total area of 377 km(2) , have now been
registered on the Chilean Mining Register and it is expected these
licences will be granted in the next few months. Salar de Atacama
is the largest lithium production base in the world where the two
leading producers of battery grade lithium, SQM and Albemale, have
extensive licence positions. Several of CTL's application blocks
are adjacent to SQM's licences. Information derived from publicly
available Environmental Studies, conducted by SQM and other
organizations suggests that the lithium-rich brine deposits extend
beyond the core salar region inside the basin. This underscores the
promising potential for CTL's applications in these areas of
significant prospective lithium reserves. A geophysics programme
comprising both Transient Electro Magnetic (TEM) and
Magnetotellurics (MT) lines has commenced with the planned lines
shown in Figure 6. MT allows for the depth profile to extend to
1000m.
Fig. 5: CTL Licence Applications Fig. 6: Planned Geophysics
Lines
The geophysics contractor recently completed a section of seven
stations spaced 200m apart on the first west-east transect located
on the southern licence block. The resistivity profile based on the
completed section extends to 1,200m in depth, as shown in Figure 7.
The profile shows a low resistivity anomaly starting from a depth
of 400m with an approximate thickness of 200m which deepens to the
south-east. This is interpreted to be a sub-surface hypersaline
aquifer which provides a target for further exploration
evaluation.
Fig. 7: MT-TEM Resistivity Profile Salar de Atacama South
Block
Direct Lithium Extraction (DLE) moving into the mainstream
Key developments:
-- CTL ordered the US$2 million DLE Pilot Plant from Sunresin in Q1 2023.
-- The first of two parts arrived at CleanTech's facility in
Copiapó in Q3 2023. The plant is designed for process optimisation
and to produce a purified concentrated eluate that will feed the
downstream process to deliver 1 tonne per month of lithium
carbonate equivalent (LCE) for product qualification by potential
offtakers and strategic partners.
-- The commissioning of the plant is expected to be finalised in Q4 2023.
Fig. 8 DLE pilot plant columns installed in Copiapó
Fig. 9 Rotary valve final tests Belgium (Aug 2023)
In June 2022, CTL were delighted to announce that the Company
completed laboratory scale test-work to produce a 1kg sample of
battery-grade lithium carbonate. In line with CleanTech's ambition
to produce 'green' lithium through utilising renewable power and
DLE, CTL is working with the world leading DLE company Sunresin to
supply DLE technology for CTL's Chilean operations. During 2022 and
2023, the Company has worked with Sunresin testing the brine from
the sub-surface aquifers taken from the resource drilling
programmes at Laguna Verde and Francisco Basin to provide key data
on DLE parameters that will inform feasibility studies.
The Company ordered a lab-scale DLE demo unit which arrived in
Chile in November 2022 and this is currently operating in our
facility in Copiapó to test the brines and various adsorbents and
optimise our processes for larger scale tests. A larger scale DLE
pilot plant was ordered in Q1 2023 that has the potential to
produce up to one tonne of purified concentrated eluate that will
feed the downstream process to produce up to 1 tonne per month of
battery-grade lithium carbonate for testing and qualification by
potential customers. The Pilot Plant, which arrived in stages in Q3
2023, aims to be commissioned and operating in Q4 2023. It will be
located at our facility in Copiapó so that test work can continue
year-round.
The benefit of DLE is the lower environmental footprint in terms
of land and water use in addition to higher recoveries and faster
processing. However, it requires more energy than the traditional
evaporation ponds. Chile has a high and increasing proportion of
its energy from renewables, hydro, solar and wind. The Company
intends to secure a 100% renewable energy power purchase agreement
(PPA) with a supplier for 24/7 year-round supply of renewable
energy thus ensuring our lithium production has close to zero
carbon footprint.
The process is shown schematically in Figure 10 with brine
pumped from the aquifer to the DLE plant where lithium is adsorbed
and the spent brine, minus, lithium, is reinjected back into the
aquifer at a location that does not result in dilution of the
lithium brine. The lithium is then desorbed from the adsorbent
using water and the resulting eluate is then concentrated, purified
and precipitated as battery grade lithium carbonate.
Fig 10. Summary of the DLE process based on lithium adsorption
from below-surface brine
Reinjection Programme to Commence
For a DLE based project, the other key element of the project's
hydrogeological model is the reinjection of spent brine into the
subsurface aquifers of the basin. At Laguna Verde, and at Francisco
Basin, the Company has a dominant tenure position in the basin
allowing for extraction and reinjection of brine in different zones
of the basin. In the Scoping Study completed for the Laguna Verde
project two sites were proposed for reinjection bore fields. The
primary basis for site selection is to limit the distance and
elevation difference between the reinjection site and the DLE
process plant, where spent brine will be pumped from, and a
favourable site geology for subsurface sediments that will host the
re-injection brine volume while providing a geological separation
with the resource area.
Finance
In the six-month period ending 30 June 2023, CleanTech has
continued to prioritise expenditure on its extensive capital
programmes. Capital expenditure in the six months to 30 June 2023,
totalled GBP5.5 million and includes expenditure on the
following:
-- LV - 2 well programme;
-- FB - 6 well programme;
-- LL - 2 well programme;
-- DLE plant - design, resin and metallurgical testing;
-- Hydrogeological - modelling, pump-test and reinjection programmes;
-- EIA - baseline studies and best practices initiatives;
-- Scoping studies for Laguna Verde and Francisco Basin and
progress on the pre-feasibility study for Laguna Verde
In addition to the capital programmes noted above, non-capital
cash costs of approximately GBP2.0 million have been incurred.
Those cash costs, largely reflecting GBP0.5 million for staff
costs, GBP0.7 million for promotion, public and investor relations
and travel, GBP0.7 million for legal and professional support
including listing and compliance and insurance costs, the balance
of GBP0.1 million to comprises a variety of other and general
administrative costs. These cash costs were offset by GBP0.4
million in proceeds from an exercise of share options by a former
employee.
CleanTech Lithium plans to continue developing its assets on all
fronts moving towards early production in 2026. In support, the
Board has developed a financial strategy which includes raising
additional funds at the appropriate time. It is worth noting that
CleanTech regularly receives approaches from third parties seeking
either to provide funding or to participate more directly in the
Company's projects in the form of strategic partnerships. Although
such strategic partnership discussions remain governed by
non-disclosure agreements, it is expected that they will progress
more seriously once the Laguna Verde PFS is completed and once the
initial outputs from the DLE pilot plant (which the Company will be
commissioning in Q4 2023) are known. In the meantime, with GBP4.6
million of funds held at 30 June 2023, the Company will continue
its work programme and look to raise additional funds in the coming
months to maintain operational momentum as appropriate. In light of
the quality of its assets and the approaches received, the Board
recognises there are various funding sources the Company can
consider to help it achieve its ends; ensuring its ends are
achieved in line with shareholders' interests remains of key
importance to the Board.
Chile Government:
Chile's President, Gabriel Boric, announced in late April 2023,
the country's National Lithium Strategy, which focuses on
public-private partnerships and the sustainable development of the
lithium industry for the benefit of the country, communities and
private enterprise.
The focus of the strategy outlined by the Government is on
partnership, with the aim of leveraging complementary skills and
resource in support of the sustainable development of the lithium
industry in Chile. The proposals as outlined, including
public-private partnerships and the creation of a national lithium
company similar to Codelco for Chile's copper industry, are broadly
in-line with those expected, based on our prior discussions with
government officials. The Board welcomed these proposals, which the
directors view as creating a greater degree of certainty for the
lithium industry in Chile and therefore an improved climate for
investment.
Importantly the Company's strategy of utilising DLE and
renewable energy-based processing aligns perfectly with the
Government's agenda for the lithium industry, which is advocating
for the use of DLE as the primary method of lithium extraction for
new projects.
This became evident when the Company's Executive Chairman, Steve
Kesler, and CEO, Aldo Boitano, joined Government Ministers in
Toronto for a series of talks and meetings where Chile was pitched
as an attractive country for foreign investment and partnerships
for those looking to support the development of green technologies.
CleanTech Lithium was invited to 'Chile Day' to share our
experiences and be an example of a company scaling a technology
required for the intended green economy.
Operating contracts
The directors and senior management in Chile continue to
maintain a highly active and positive dialogue with representatives
of the Government and relevant regulatory and government bodies and
intend to obtain the required production permits, as planned, to
enable lithium production to commence at the Company's projects
from 2026 onwards.
In Q3 2023, our wholly-owned subsidiaries, Atacama Salt Lakes
SpA and Laguna Negro Francisco SpA, submitted applications for
operating contracts (CEOLs) for CTL's two most advanced projects
Laguna Verde and Francisco Basin. These are the first CEOL
applications to have been made in Chile since the announcement of
the National Lithium Strategy in April 2023.
In the applications, CTL stated that the Company is open to
inviting the state national mining company, ENAMI, to partner with
CTL as a minority stake partner through standard joint venture
("JV") arrangements consistent with other such JV arrangements
ENAMI has in place in the mining sector in Chile. This is a
strategic decision by the Board because the government can provide
expertise and fast-track approvals e.g., planning permissions which
will help towards reaching our production target.
The Company will work with the authorities in Chile over the
coming months to seek approval of these contracts which are
submitted under the terms of the National Lithium Strategy and in
compliance with current Chilean law.
Health & Safety:
CleanTech Lithium has carried out extensive drilling campaigns
in 1H 2023 simultaneously across the three projects. The campaigns
were carried out without any lost time incidents, with the health
and safety of our employees and contractors being of the highest
priority. CTL introduced special protocols for visits by any
personnel and key stakeholders to Laguna Verde and Francisco Basin,
given that they are both more than 4,000 metres above sea
level.
ESG:
The Board formally set up an ESG Committee in Q2 2023 which is
chaired by Non-Executive Director, Maha Daoudi. Its mandate is
broad and it will report to the Board, in the same manner as for
the Audit & Risk Committee and the Remuneration Committee, to
ensure the directors are being held accountable across all ESG
matters. The composition of the ESG Committee and its formal board
mandate was finalised in late Q2 2023 with the first meeting being
held on 30 June 2023.
The role and primary purpose of the ESG Committee is to support
and advise the Board in fulfilling its responsibilities to:
-- create stakeholder and shareholder value by understanding,
managing, monitoring and reporting on sustainability and ESG risks
and opportunities to ensure the long-term viability and growth of
the Company.
-- ensure that ESG principles are applied as a lens against all
Company strategic decisions related to ESG outcomes, including
environmental, social (including employees, local communities, and
wider societal interests e.g. stakeholder engagement), and the way
ESG matters are governed by the Company (e.g. stakeholder
engagement, application of local and international laws, ESG
investor ratings, company structure, etc.).
-- ensure communication throughout the Company of the importance
of developing a culture of ESG risk management, environmental and
community responsibility and an awareness of the importance of
health and safety and the preservation of human rights.
Previously, in 2022, the Company partnered with ESG consultants
Blurred to produce a Materiality Assessment in accordance with SASB
Materiality Standards. Their report was delivered to the Company in
Q4 2022. Part of this process involved the CTL executive team being
individually interviewed as well as representatives from senior
management. This approach was supported by independent research,
key stakeholder analysis and benchmarking across the industry. By
applying a material risk lens to our business strategy, CTL is able
to put ESG principles at the heart of our decision-making, ensuring
we support the nearby communities and the environment as the
Company move towards production and act on its commitments to
becoming a truly green lithium supplier.
The outcome of the Materiality Assessment sets out where the
biggest risks are and therefore the biggest opportunities for CTL
to have the most positive impact, and where the Company must ensure
potentially negative risks are mitigated.
To create a leading ESG strategy will require the Company to set
ambitious commitments and targets. These measurements will be
incorporated into future reporting and act as key discussion point
when speaking to ESG minded funds and institutional investors.
Demonstrating CTL's ESG credentials will ensure the Company is
progressing the company in the best way possible and it is
currently discussing with measurement providers to support the
Company in establishing an industry leading approach.
The Company will keep shareholders up to date with the progress
of the ESG Committee and will be looking to publish an annual ESG
Report in future years. The report will highlight the key issues
being addressed and progress being achieved against agreed
ESG-related targets. Publishing the reports will help existing and
potential investors and partners to fully evaluate our ESG
credentials.
Local Community Engagement and Support:
In line with the Company's ESG-focused strategy, collaborating
with local communities is hugely important to CTL as with their
support the Company can be sure it is developing in a way that
respects their concerns. Their knowledge will continue to be of
material importance for the Company as CTL moves forward across its
projects. CTL has developed constructive relationships with the
local communities across the Atacama region, encouraging open
dialogue, transparency and recognising community knowledge to
ensure the longevity of our success and social licence to operate.
CTL has hosted visits from indigenous communities, most of which
live in settlements approximately 100km away from its sites.
CTL has purchased the lease on a new office in Copiapo which
became the operational centre in Q3 2023. The office will be a main
drive for our community relations, a local hub where interested
parties will be able to visit and communicate directly with its
team and help inform the Company's planning and development for the
benefit of all stakeholders.
Trading on AIM, Germany, USA and intending to complete ASX
listing:
Towards the end of May 2023, the Company qualified to trade on
the OTCQX(R) Best Market under the symbol "CTLHF" as the Company
successfully met the high financial standards, best corporate
governance practices, and complied with the U.S. relevant
securities law. The graduation to the OTXQX Best Market
demonstrates the Company's competency and will streamline any
investment interest from investors in the United States and
Canada.
Operational milestones remain the priority and with a steady
flow of news recently the Company has seen increased trading
volumes across all the exchanges that the Company is listed on. CTL
has been reminded by its brokers that despite the turbulent market,
CTL has performed well over 1H 2023 when compared to our peers and
the market generally.
Lastly, the Board examined the merits of an ASX listing in early
2023 and held discussions with a number of its major shareholders
and other parties. This resulted in two visits to Australia by Aldo
Boitano, supported by Fox Davies Capital and Canaccord Genuity.
Australia is a market that has a familiarity and long history with
the mining and extractives industry, and recently with lithium, and
the Company believes this community of investors and partners will
secure further support for the Company. The Company has therefore
been preparing for an ASX listing with the intention this will be
successfully completed in Q4 2023. Good progress has been made on
this with the support of the Company's lawyers, brokers and various
other advisers (in Australia, Chile and elsewhere), as required as
part of a stringent ASX listing regulatory process. Whilst this has
been an extensive piece of work for the directors and management,
the Board is looking forward to spreading the Company's exciting
story to the very well-versed and extensive market in
Australia.
Board & Management team:
Management Team
The Board's plan to production is supported and driven by its
exceptional people. CTL is determined to drive change in the mining
industry and that of Chile's green economy agenda. The team
consists of a diverse range of skillsets and backgrounds, with the
majority of the team based in Chile with a portion of corporate
roles held in the UK and Europe. The team in Chile continued to
expand throughout 1H 2023 as it has added the necessary skills to
make sure the Company has "all bases covered" on its operational,
technical and administrative work programmes. This expansion will
continue throughout 2023 and beyond as CTL enters new work
programmes and keeps a line of sight on its goal of LCE
production.
To enhance its communications with the Company's key
stakeholders and ESG credibility, the Board appointed Nick Baxter
as the new Head of Communications & ESG in Q1 2023. Nick joined
the Company after working in London at the award-winning
sustainability communications agency Blurred. Nick previously
worked at the Natural History Museum and Freuds, one of the largest
independent PR companies in the UK as a media relations manager and
account director respectively.
Board
The following changes were made in 1H 2023 at Board level:
Steve Kesler: In March 2023, Dr. Kesler moved from his role as
Non-Executive Chairman to Executive Chairman. Dr Kesler's
background in developing major mining projects in Chile and
elsewhere over 45 years will provide support and relevant
experience to the CEO, Aldo Boitano, and at a time when the Company
is intent on moving from exploration to the development and
production phase. His particular focus will be on guiding the
Company through the various strategic options in production,
partnerships, offtake and financing.
Maha Daoudi: In March 2023, the Board was strengthened by the
appointment of Maha Daoudi, who has tremendous experience in
commodities, marketing and trading as well as other diverse
interests. Maha's experience in offtake agreements with different
commodities, especially in her previous senior role at Trafigura,
and her ability to strike up international alliances is a key
strategic advantage for the Company as it looks to establish a
relationship with a strategic partner/s over the next year. Indeed,
Maha will be leading a small group from the Company to China in Q4
2023 to engage with the senior management of the Company's DLE
partner, Sunresin, and other potential parties who can add value.
Maha's considerable experience in China, through her previous role
at Trafigura, means she is very well experienced in operating in
that market.
Tommy McKeith: Following Maha's appointment, in June 2023, ahead
of the planned ASX listing, Tommy McKeith joined the Board as the
Company's Australian-based Independent Non-Executive Director.
Tommy is an experienced public company director and geologist with
over 30 years of mining company leadership, corporate development,
project development and exploration experience. He has held roles
in an international mining company and across several ASX listed
mining companies. Tommy holds a B.Sc (Geology), a Graduate Diploma
in Engineering and an MBA (all from University of the Witwatersrand
in South Africa). He has also been a Fellow of the Australian
Institute of Mining and Metallurgy since 2009. Tommy has already
demonstrated his experience to the Company as it moves forward on
its plans in Australia and elsewhere.
Jonathan Morley-Kirk: Following Dr. Steve Kesler's moving to the
Executive Chairman position earlier this year Jonathan became
Senior Independent Non-Executive Director. This decision has been
made to continue the open dialogue with shareholders and offer an
alternative point of contact for investors and the Company.
Jonathan plays a more active role in nurturing these relationships
should shareholders have any concerns, while continuing to
providing his support to the executive team.
With the appointments of Maha Daoudi and Tommy McKeith, the
Company's Board is now made up of 6 directors as follows:
-- Executive Chairman - Steve Kesler
-- CEO - Aldo Boitano
-- CFO - Gordon Stein
-- Senior Independent Non-Executive Director - Jonathan Morley-Kirk
-- Independent Non-Executive Director - Maha Daoudi
-- Independent Non-Executive Director - Tommy McKeith
The Company's Board now comprises three Executive Directors and
three Independent Non-Executive Directors, in full compliance with
the QCA Code on Board composition, as referred to in the Company's
Annual Report & Financial Statement for 2022.
Board Committees
Following the above-mentioned Board changes, the Board
restructured its committee structures to ensure the right balance
is in place going forwards and also better reflects the Directors'
skills:
-- Tommy McKeith is a member of the Audit Committee, with
Jonathan-Morley Kirk remaining as Chairman.
-- Tommy McKeith chairs the Remuneration Committee, with Maha Daoudi as the other member, and
-- Maha Daoudi chairs the newly created ESG Committee, with
Jonathan Morley-Kirk and Aldo Boitano as the other members.
Summary
The first half of 2023 involved extensive work programmes across
many fronts for CTL, a programme our Board believes is unique in
Chile at this time, given the different assets involved. The
Company intends to drive forward, adopting best practice
methodologies, seeking to apply ESG through our new committee
structure and being confident in the support we are receiving from
many parties in Chile, especially from the government, regulatory
bodies and local indigenous communities. The Company believes it is
in the vanguard of a new way of working with the different players
in Chile and are excited to be a part of this new approach.
CTL's team continues to grow and the Company would like to take
this moment to share its thanks to our employees, contractors and
partners for their continued hard work over the first half of 2023.
Everyone who is part of this Company plays an important role in
maintaining momentum and advancing our ambition to become a leading
supplier of lithium for the transition to electromobility and
battery manufacturing.
Finally, Aldo and I are both excited to be part of our new
extended Board which, we believe, now has the depth of experience,
networks and drive to move the Company forward on all fronts
towards first production of battery grade lithium in Chile, using
sustainable production techniques. Our shareholders can be rest
assured that the Board will do everything it can to achieve our
goals and deliver the inherent value we believe can be achieved for
our Company.
Steve Kesler, Executive Chairman, Aldo Boitano, Chief Executive
CleanTech Lithium plc Officer,
28 September 2023 CleanTech Lithium plc
28 September 2023
INDEPENT REVIEW REPORT TO CleanTech Lithium PLC
Conclusion
We have been engaged by the company to review the condensed set
of consolidated financial statements in the half-yearly financial
report for the six months ended 30 June 2023 which comprises the
condensed consolidated statement of comprehensive income, the
condensed consolidated statement of financial position, the
condensed consolidated statement of changes in equity, the
condensed consolidated statement of cash flows and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2023 is not prepared, in all material respects, in accordance
with UK-adopted International Accounting Standard 34 and the AIM
Rules for Companies.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" ("ISRE (UK) 2410") issued for use in the United Kingdom. A
review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK) and consequently does not enable us to obtain assurance that
we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 2, the annual financial statements of the
group are prepared in accordance with UK-adopted international
accounting standards. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with UK-adopted International Accounting Standard 34,
"Interim Financial Reporting".
Material Uncertainty Related to Going Concern
We draw attention to note 2 in the interim financial information
which indicates that the group is in a pre-revenue phase of
development and until its transition to revenue generation and
profitability the group needs to raise additional capital to
continue financing its planned activities. As stated in note 2,
these events or conditions, along with the other matters as set
forth in note 2, indicate that a material uncertainty exists that
may cast significant doubt on the group's ability to continue as a
going concern.
Our conclusion is not modified in respect of the matter.
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of Conclusion
section of this report, nothing has come to our attention to
suggest that management have inappropriately adopted the going
concern basis of accounting or that management have identified
material uncertainties relating to going concern that are not
appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with this ISRE (UK) 2410, however future events or
conditions may cause the entity to cease to continue as a going
concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly
financial report in accordance with UK-adopted International
Accounting Standard 34 and the AIM Rules for Companies.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report, we are responsible for
expressing to the Company a conclusion on the condensed set of
financial statement in the half-yearly financial report. Our
conclusion, including our Material Uncertainty Related to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the Company in accordance with
International Standard on Review Engagements 2410 (UK) "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council. Our
review work has been undertaken so that we might state to the
company those matters we are required to state to them in this
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the company for our review work, for this report, or for the
conclusions we have formed.
Crowe U.K. LLP, Statutory Auditors ,
London, United Kingdom
28(th) September 2023
Condensed Consolidated Statement of Comprehensive Income
Unaudited
Unaudited Restated
Six months Six months
to to
Notes 30-Jun-2023 30-Jun-2022
GBP GBP
Income -
Administrative costs 3 (2,628,104) (1,183,180)
Provision for Chilean VAT
recoverable 3 (635,096) -
Operating loss (3,263,200) (1,183,180)
Finance cost (9,806) (2,258)
Loss before tax (3,273,006) (1,185,438)
Income tax 5 - -
----------------------------------- ----- ------------- ------------
Loss for the period after
tax (3,273,006) (1,185,438)
----------------------------------- ----- ------------- ------------
Other comprehensive income/(loss):
Foreign exchange differences
arising on translation of
functional currencies 9,128 100,588
----------------------------------- ----- ------------- ------------
Total comprehensive loss
for the period (3,263,878) (1,084,850)
Loss per share
Basic 7 (0.0310) (0.0166)
Condensed Consolidated Statement of Financial Position
Unaudited Audited
As at as at
30-Jun-23 31-Dec-22
Notes GBP GBP
Exploration and evaluation assets 8 11,020,694 5,317,412
Non-current assets 11,049,694 5,317,412
Cash and cash equivalents 4,638,749 12,368,265
Trade and other receivables 9 225,080 278,339
Current assets 4,863,829 12,646,604
Trade and other payables 12 (479,093) (440,338)
Provisions and accruals 12 (164,103) (193,408)
Current liabilities (643,196) (633,746)
Net assets 15,241,327 17,330,270
---------------------------------- ----- ----------- -----------
Share capital 21,472,155 21,076,155
Capital reserve (77,237) (77,237)
Share based payment reserve 2,357,275 1,578,340
Foreign exchange reserve 324,823 315,695
Accumulated losses (8,835,689) (5,562,683)
Equity and reserves 15,241,327 17,330,270
---------------------------------- ----- ----------- -----------
Condensed Consolidated Statement of Changes in Equity
Share based Foreign
Capital payment exchange Accumulated
Share Capital Reserve reserve reserve losses Total
GBP GBP GBP GBP GBP GBP
------------------------------ ------------- ----------- ----------- --------- ----------- -----------
At 1 January 2022 - 5,313,295 - (21,909) (1,762,146) 3,529,240
Loss for the year (restated) - - - - (1,185,438) (1,185,438)
Other comprehensive income - - - 100,588 - 100,588
------------------------------ ------------- ----------- ----------- --------- ----------- -----------
Total comprehensive loss - - - 100,588 (1,185,438) (1,084,850)
Share-for-share exchange 5,051,201 (5,051,201) - - - -
Shares issued in subsidiaries - (339,331) - - - (339,331)
Shares issued 5,475,356 - - - - 5,475,357
------------------------------ ------------- ----------- ----------- --------- ----------- -----------
30 June 2022 (restated) 10,526,557 (77,237) - 78,679 (2,947,584) 7,580,415
At 1 January 2023 21,076,155 (77,237) 1,578,340 315,695 (5,562,683) 17,330,270
Loss for the period - - - - (3,273,006) (3,273,006)
Other comprehensive income - - - 9,128 - 9,128
------------------------------ ------------- ----------- ----------- --------- ----------- -----------
Total comprehensive loss 9,128 (3,273,006) (3,263,878)
Share options and warrants - - 778,935 - - 778,935
Shares issued 396,000 396,000
------------------------------ ------------- ----------- ----------- --------- ----------- -----------
30 June 2023 21,472,155 (77,237) 2,357,275 324,823 (8,835,689) 15,241,327
Condensed Consolidated Statement of Consolidated Cash Flows
Unaudited
Unaudited Restated
Six months Six months
to to
30-Jun-2023 30-Jun-2022
GBP GBP
Loss after tax for the period (3,273,006) (1,185,438)
Non-cash items:
Fair value recognition of share options
and warrants 556,896 -
Equity settled transactions or services - 4,040
Movement in trade and other receivables 159,605 (433,426)
Movement in payables, provisions
and accruals 22,964 (281,959)
Finance costs (9,806) 2,258
Net cash used in operating activities (2,543,347) (1,894,525)
Expenditure on exploration and evaluation
assets (5,481,243) (1,992,188)
------------------------------------------- ------------ ------------
Net cash used in investing activities (5,481,243) (1,992,188)
Proceeds from issue of ordinary shares 396,000 5,469,181
Finance costs (9,806) (2,258)
Net cash generated from financing
activities 386,194 5,278,182
Net cash flow (7,638,396) 1,582,468
------------------------------------------- ------------ ------------
Cash and cash equivalents brought
forward 12,368,265 3,230,997
Net cash flow (7,638,396) 1,582,468
Effect of exchange rate changes (91,120) (143,865)
------------------------------------------- ------------ ------------
Cash and cash equivalents carried
forward 4,638,749 4,669,600
------------------------------------------- ------------ ------------
Notes to the Financial Statements
1. GENERAL INFORMATION
CleanTech Lithium Plc ("CTL Plc", or the "Company")
The condensed consolidated interim financial statements of
CleanTech Lithium Plc for the first six months ended 30 June 2023
were authorised for issue in accordance with a resolution of the
Board on 28(th) September 2023.
CleanTech Lithium Plc was incorporated and registered as a
private company, initially with the name CleanTech Lithium (Jersey)
Ltd, in Jersey on 1 December 2021 with registered number 139640. It
was subsequently reregistered as a public limited company on 20
January 2022 and on 2 February 2022 it changed its name to
CleanTech Lithium Plc.
On 14 February 2022, a share-for-share exchange between the
shareholders of CleanTech Lithium Ltd (CTL Ltd, or the U.K. entity)
and CTL Plc completed, resulting in CTL Plc acquiring and becoming
the parent company of CTL Ltd and its wholly owned subsidiaries,
together "CleanTech Lithium Group" or the "Group".
During the six months to 30 June 2023, there have been no
changes to the structure of the CleanTech Lithium Group.
2. BASIS OF PREPARATION
The condensed consolidated interim financial statements for the
Group have been prepared in accordance IAS 34 'Interim Financial
Reporting' per the U.K.-adopted international accounting standards.
They are unaudited and do not include all the information required
for the preparation of the annual consolidated financial statements
and should be read in conjunction with the audited consolidated
financial statements for the year ended 31 December 2022 of
CleanTech Lithium Plc, that can be found on the website:
https://www.ctlithium.com . The report of auditor on those accounts
was unmodified but it did make reference to material uncertainties
related to going concern.
The amounts in this document are presented in British Pounds
(GBP), unless noted otherwise. Due to rounding, numbers presented
throughout these condensed consolidated Interim financial
statements may not add up precisely to the totals provided and
percentages may not precisely reflect the absolute figures.
A summary of the significant accounting policies can be found in
the Company's consolidated financial statements for the year ended
31 December 2022, on pages 62 to 64. The accounting policies used
to prepare these condensed consolidated interim financial
statements are consistent with those. Furthermore, there are no new
standards or interpretations applicable from 1 January 2023 which
have a significant impact on these condensed consolidated interim
financial statements.
Significant accounting judgments, estimates and assumptions
In preparing this interim financial report, it has been
necessary to make judgments, estimates and assumptions to form the
basis of presentation, recognition and measurement of the Group's
assets, liabilities, items of income statements, accompanying
disclosures and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount
of assets or liabilities affected in future periods.
The significant judgments, estimates and assumptions made when
applying the Group's accounting policies are the same as those
applied to the consolidated financial statements for the year ended
31 December 2022. The significant judgment in assessing the
exploration and evaluation assets for the existence of indicators
of impairment at the reporting date, which are set out in note
8.
Going Concern
The Group is in a pre-revenue phase of development and until its
transition to revenue generation and profitability the Group will
be required to rely on externally sourced funding to continue as a
going concern, the Board recognises this condition may indicate the
existence of material uncertainties, which may cast significant
doubt regarding the Group's ability to continue as a going concern.
Notwithstanding, the Directors have a demonstrated record of
successfully raising capital raising for projects and ventures of
this nature and are confident in being able to secure the funding
needed for the Group to deliver on its commitments and continue as
a going concern.
3. ADMINISTRATION EXPENES
Administration expenses in the six months to 30 June 2023
totalled GBP3.3 million, of which approximately GBP1.2 million
reflects non-cash items. More specifically, approximately GBP0.6
million reflects a provision made against VAT in Chile which ought
to be recoverable once production starts (Note 9 provides further
detail). In addition to the non-cash VAT provision, approximately
GBP0.6 million has been recorded as a share-based payments for
share options awarded to staff and contractors (further detail is
set out in Note 10).
Of the GBP2.0 million in cash costs, approximately GBP0.5
million relates to staff costs, GBP0.7 million relates to
promotion, public and investor relations and travel, GBP0.7 million
relates to legal and professional support including listing and
compliance and insurance costs, the balance of GBP0.1 million
comprises a variety of other and general administrative costs.
4. PRIOR PERIOD RESTATEMENT
The Group has restated its comparative interim financial
information to correct the amount of loss on disposal of subsidiary
which totalled GBP339k. It was incorrectly recognised in the
condensed consolidated statement of comprehensive income and the
condensed consolidated statement of changes in equity for the
period ended 30 June 2022. The correction is reflected as a reserve
movement in the reporting period within the equity and reserve.
Accordingly, there is no restatement to the consolidated statement
of financial position at 31 December 2021 and 30 June 2022.
5. SEGMENTAL INFORMATION
The Group operates in a single business segment, being the
exploration and evaluation of mineral properties These activities
are undertaken in Chile where all of the group's non-current assets
are held.
6. INCOME TAX
The accrued income tax expense continues to be GBPnil as the
Group remains in a loss making position. No deferred tax asset is
recognised on these losses due to the uncertainty over the timing
of future profits and gains.
7. LOSS PER SHARE
The calculation of basic loss per ordinary share is based on the
loss after tax and on the weighted average number of ordinary
shares in issue during the period.
Diluted loss per share assumes conversion of all potentially
dilutive Ordinary Shares arising from the share schemes detailed in
Note 10. Potential ordinary shares resulting from the exercise of
warrants, and options have an anti-dilutive effect due to the Group
being in a loss position. As a result, diluted loss per share is
disclosed as the same value as basic loss per share.
Unaudited Unaudited
Six months Six months Audited
to to Year ended
Basic and diluted loss per share 30-Jun-2023 30-Jun-2022 31-Dec-22
GBP GBP GBP
Loss after taxation (3,273,006) (1,185,438) (3,800,537)
Basic weighted average number of ordinary
shares (millions) 105.66 71.26 78.56
Basic loss per share (GBP GBP) (0.0310) (0.0166) (0.0484)
8. EXPLORATION AND EVALUATION ASSETS
Expenses incurred to date by the Chilean entities on feasibility
studies, mineral exploration and delineation were capitalised as
"exploration and evaluation assets" within "non-current assets" in
accordance with the Group's accounting policy.
Unaudited
Six months Audited
ended Year ended
Exploration and evaluation assets 30-Jun-2023 31-Dec-22
GBP GBP
Opening balance 5,317,412 765,115
Additions 5,703,282 4,552,297
Closing balance 11,020,694 5,317,412
----------------------------------- ------------ -----------
Of the additions, approximately GBP0.2 million reflects non-cash
additions which reflect share-based payments made to staff and
contractors, about which further detail is set out in Note 10.
Impairment assessments
The Directors assess for impairment when facts and circumstances
suggest that the carrying amount of an exploration & evaluation
asset (E&E) may exceed its recoverable amount. In making this
assessment, the Directors have regard to the facts and
circumstances noted in IFRS 6 paragraph 20. In performing their
assessment of each of these factors, at 30 June 2023, the Directors
have:
-- reviewed the time period that the Group has the right to
explore the area and noted no instances of expiration, or licences
that are expected to expire in the near future and not be
renewed;
-- determined that further E&E expenditure is either budgeted or planned for all licences;
-- not decided to discontinue exploration activity due to there
being a lack of quantifiable mineral resource; and
-- not identified any instances where sufficient data exists to
indicate that there are licences where the E&E spend is
unlikely to be recovered from successful development or sale.
Based on the above assessment, the Directors are not aware of
any facts or circumstances that would suggest the carrying amount
of the E&E asset may exceed its recoverable amount.
9. TRADE AND OTHER RECEIVABLES
Unaudited Audited
As at As at
Trade and other receivables 30-Jun-2023 31-Dec-22
GBP GBP
Prepayments and deposits 158,223 194,712
VAT 10,920 4,988
Other receivables 55,937 78,639
Total 225,080 278,339
---------------------------- ------------ ----------
Prepayments and deposits largely reflect prepaid insurance and
other commercial subscriptions which renew variously and annually
as well as office rental deposit amounts paid.
Although VAT shows a balance of approximately GBP11k at 30 June
2023, at that date approximately GBP1.3 million in Chilean VAT
recoverable is not shown in the table above. Although the Chilean
VAT is expected to be eligible for refund in future, due to the
uncertainty over the timing of future production and revenues,
which would trigger the Group's eligibility to recover that VAT,
the Directors have made full provision against this same amount.
Accordingly, approximately GBP0.6 million provision has been
reflected in the income statement for the period ended 30 June
2023.
Other receivables comprise multiple smaller working capital
balances in Chile.
10. SHARE BASED PAYMENTS
During the six months ended 30 June 2023, share options have
been granted to certain Directors, staff and suppliers. Various
vesting conditions apply.
In addition, during the period, 1,100,000 share options were
exercised by a former employee at an exercise price of 36p per
share, giving rise to a GBP396,000 cash inflow to the Company. No
other warrants or options were exercised, forfeited or allowed to
lapse during the six months to 30 June 2023.
Unaudited Audited
Six months Year ended
ended 31-Dec-22
30-Jun-23
# #
Outstanding at start of period 10,984,745 -
Share options granted 3,162,000 6,670,000
Warrant shares granted - 4,314,745
Share options exercised (1,100,000) -
-Outstanding at end of period 13,046,745 10,984,745
-------------------------------- ----------- -----------
All options and warrants are granted in Company's name. Share
options granted have a weighted average exercise price of 47 pence
and warrant shares granted have a weighted average exercise price
of 34 pence.
The fair value of each option granted in the period was
estimated on the grant date using the Black Scholes option pricing
model. The following assumptions have been used:
Share Options
Fair value of call option per share GBP0.12 -
0.38
Share price at grant dates GBP0.39 -
0.55
Exercise price GBP0.01 -
0.57
Expected volatility 98%
Vesting period 4.7-5.0 years
from vesting
Risk-free interest rate (based on
government bonds) 4.16%
The total share option fair value charge in the first half 2023
is GBP778,935 (full-year 2022: GBP588,713), of which approximately
GBP580k has been recorded in the income statement as a non-cash
employee expense; the balance has been recorded within E&E. The
total warrant shares fair value charge during the six months to 30
June 2023 was GBP26,548 (2022: GBP989,114). As noted, these fair
value estimates derived thorough Black-Scholes modelling and Monte
Carlo simulations are non-cash accounting entries.
11. CONTINGENT LIABILITIES
Laguna Verde Option Agreement
Currently, the Group has an indirect interest in the Laguna
Verde concessions pursuant to the Laguna Verde Option Agreement
which was entered into on 23 April 2021.
Pursuant to the Option Agreement, the Vendors have granted
Atacama Salt Lake SpA (Atacama) the option to purchase the
concessions at any time prior to the expiry of the agreement, being
20 April 2026.
In consideration for the grant of the Option, Atacama is
required to make payments to the vendors comprising: (i) a fixed
price of US$334,000 (of which US$204,000 has been paid as at 30
June 2023, with the balance payable in annual instalments); and
(ii) a variable price, as calculated in reference to the valuation
of lithium carbonate and other commercially extractable products
from the concessions. The variable price is payable with a mix of
cash and shares as follows: 20% payable in cash and 80% payable
through the issue of shares in CleanTech Lithium Plc. The minimum
variable price payable under the Option Agreement is US $3.5
million. Atacama may discard the option to purchase the relevant
Laguna Verde properties and in the event of such a decision no
further payments would be due.
12. PAYABLES, PROVISIONS AND ACCRUALS
Unaudited Audited
As at Year ended
30-Jun-2023 31-Dec-22
GBP GBP
Trade and other payable (410,930) (321,476)
Provisions (87,091) (86,007)
Other taxes and social security (68,163) (118,862)
Accruals (77,012) (107,401)
Total (643,196) (633,746)
--------------------------------- ------------ -----------
Trade and other payables include routine trade creditors.
Other taxes and social security balances largely relate
people-related costs and taxes balances at the period end.
Accruals include routine accruals for professional services
rendered not invoiced at period end.
13. SUBSEQUENT EVENTS
Matters relating to events occurring since Period end are
reported in the section entitled Chairman and Chief Executive
Officer's Statement.
**S**
For further information contact:
CleanTech Lithium PLC
Aldo Boitano/Gordon Stein Jersey office: +44 (0)
1534 668 321
Chile office: +562-32239222
Or via Celicourt
Celicourt Communications +44 (0) 20 7770 6424
Felicity Winkles/Philip Dennis/Ali cleantech@celicourt.uk
AlQahtani
Dr. Reuter Investor Relations +49 69 1532 5857
Dr. Eva Reuter
Porter Novelli - Chile +569 95348744
Ernesto Escobar Ernesto @publicoporternovelli.cl
Harbor Access - North America +1 475 477 9401
Jonathan Paterson/Lisa Micali
Beaumont Cornish Limited +44 (0) 207 628 3396
(Nominated Adviser)
Roland Cornish/Asia Szusciak
Fox-Davies Capital Limited
(Joint Broker) +44 20 3884 8450
Daniel Fox-Davies daniel@fox-davies.com
Canaccord Genuity Limited +44 (0) 207 523 4680
(Joint Broker)
James Asensio
Gordon Hamilton
Notes
About CleanTech Lithium
CleanTech Lithium (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF) is an
exploration and development company advancing sustainable lithium
projects in Chile for the clean energy transition. Committed to
net-zero, CleanTech Lithium's mission is to produce material
quantities of battery grade using sustainable Direct Lithium
Extraction technology, powered by renewable energy, the Company
plan to be the leading supplier of 'green' lithium to the EV and
battery manufacturing market.
CleanTech Lithium has four lithium projects - Laguna Verde,
Francisco Basin, Llamara and Salar de Atacama - located in the
lithium triangle, the world's centre for battery grade lithium
production. The The two major projects: Laguna Verde and Francisco
Basin are situated within basins controlled by the Company, which
affords significant potential development and operational
advantages. All four projects have direct access to existing
infrastructure and renewable power.
CleanTech Lithium is committed to using renewable power for
processing and reducing the environmental impact of its lithium
production by utilising Direct Lithium Extraction. Direct Lithium
Extraction is a transformative technology which removes lithium
from brine, with higher recoveries and purities. The method offers
short development lead times, low upfront capex, with no extensive
site construction and no evaporation pond development so there is
no water depletion from the aquifer. www.ctlithium.com
Glossary
CLS Pty Chilean Lithium Salars Pty Limited (Australian overhead
company now wound-up and deregistered)
CLSH Chilean Lithium Salars Holdings Limited (Australian
holding company now wound-up and deregistered)
CTL Ltd CleanTech Lithium Ltd; U.K. registered and tax domiciled
company
CTL Plc CleanTech Lithium Plc; Jersey registered and tax
domiciled company
DLE Direct lithium extraction
EIA Environmental Impact Assessment
ESG Environmental, Social and Governance
Group CleanTech Lithium statutory group
IPO Initial public offering
JORC The JORC Code provides a mandatory system for the
classification of minerals Exploration Results, Mineral
Resources and Ore Reserves according to the levels
of confidence in geological knowledge and technical
and economic considerations in public reports
LCE Lithium carbonate equivalent, industry standard terminology
used to compare different forms of lithium compounds
LSE London Stock Exchange
MoU Memorandum of Understanding
mg/L micrograms per litre
Pro forma Group Non-statutory pro forma group as defined in the notes
to the financial statement
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END
IR FLFIFAVIAFIV
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