CleanTech Lithium has announced that a scoping study for its Francisco Basin project indicates the commercial viability of producing 20,000 tonnes per annum of battery-grade lithium carbonate for 12 years.
The projected output, based on an average lithium price of US$22,500 per tonne, would result in post-tax net cash flows of US$2.5 billion throughout the project’s lifetime, with costs estimated at US$3,641 per tonne of lithium carbonate.
Taking into account the construction and initial costs of US$450 million, the project’s net present value (NPV) is estimated at US$1.1 billion, with a payback period (IRR) of two years and seven months, as per the company statement.
Highlights:
· Supports the potential for Francisco Basin to become a major supplier of battery grade lithium to European and US markets based on sustainable direct lithium extraction (“DLE”) technology
Scoping Study Highlights:
· Based on annual production of 20,000 tonnes of battery grade lithium carbonate for a production period of 12 years based largely on Indicated resources
· Calculates accumulated net cashflows (post-tax and royalties) of US$2.5 billion to be generated over the production period with low operating cost of US$3,641 per tonne of lithium carbonate
· Estimated capital expenditure of US$450.0m, based on DLE plant using Sunresin Materials existing DLE technology, including 20% contingency
· Attractive economics with post-tax NPV of US$1.1 billion using a discount rate of 8%, post-tax IRR of 43.5% and a payback period of 2 years and 7 months – based on a long-term lithium carbonate price of US$22,500 per tonne from 2028
· The study assumes production commences in 2027 as the Company aims to progress project development stages with a one-year lag to the more advanced Laguna Verde project, where production is targeted for 2026
· Industry leading ESG credentials, a critical advantage for the EU market, based on utilising DLE which returns spent brine to the basin aquifers, and renewable energy for processing power by connecting with the Chilean grid and its abundant renewable energy supply
· The Company plans to undertake another resource drill programme at Francisco Basin, commencing Q4 2023, aiming to further upgrade the current resource estimate, which is 0.92 million tonnes of lithium carbonate equivalent (LCE) at a grade of 207mg/L Lithium
· This could extend the 12-year production period and would enhance projected economic returns
· A Pre-Feasibility Study (“PFS”) on the project is planned to commence on the completion of the resource drill programme, which is expected to be in 2H 2024
Production at Francisco Basin is slated to commence in 2027, a year later than the more advanced Laguna Verde project, which has a targeted commissioning date set for 2026.
Additional drilling is scheduled to take place at Francisco Basin later this year to refine the current resource estimate of 0.92 million tonnes of lithium carbonate equivalent (LCE). Furthermore, a more comprehensive pre-feasibility study is planned for the latter half of 2024.
CEO Aldo Boitano remarked, “The scoping study presents a strategy for generating battery-grade lithium with a minimal environmental impact, optimally positioning the company to cater to both EU and US markets.” He added, “Francisco Basin is our second project and is set to develop on a timeline one year subsequent to our more advanced Laguna Verde project.
When considering both scoping studies, we estimate a total NPV of nearly $3 billion and an IRR exceeding 43% for each project.”
