CleanTech Lithium PLC (AIM: CTL, Frankfurt: T2N), an exploration and development company advancing sustainable lithium projects in Chile, is pleased to announce that the Company’s subsidiary in Chile, Atacama Salt Lakes SpA (‘ASL’), has submitted its main application (the ‘Application’) for a Special Lithium Operation Contract (‘CEOL’) for the Company’s flagship asset, Laguna Verde (the ‘Project’). Laguna Verde is one of six saline systems that the Government of Chile has prioritised for development by the private sector and the CEOL gives the applicant the right to commercially produce lithium from the specified project.
Although contracts are normally awarded after a public tender the Government has announced a simplified procedure whereby an applicant can be awarded a CEOL through direct negotiation if it meets certain criteria. The Company believes that its application for a CEOL at Laguna Verde demonstrates that these criteria have been met and so expects to proceed with direct negotiation with the Government on the terms of the CEOL.
Highlights:
ASL has submitted the main Application for the CEOL, with additional annexes to be submitted shortly to finalise electronic submission, in compliance with the criteria established by the Ministry of Mining to enter the simplified procedure for the award of a CEOL through direct negotiation.
This includes the work undertaken on Direct Lithium Extraction (‘DLE’) and the DLE pilot plant in Copiapó culminating in the recently announced production of high-grade lithium carbonate with 99.78% purity.
The Application addresses the criteria set by the Ministry of Mining which would allow ASL to enter direct negotiations with the Government for the award of a CEOL in 2025:
ASL holds licences exceeding 80% of the licences in the proposed CEOL polygon area included in the Application
The Company is a participant in the lithium industry through its lithium exploration and exploitation activities in Chile
The Company meets the minimum equity requirement and maximum debt/equity ratio on its consolidated balance sheet over the past two accounting periods, and
Demonstrated community consultation and support – the Application includes letters of support from indigenous community leaders for the award of the CEOL to ASL and for CTL´s approach to develop the Project
The Application outlines the benefits the Project will bring to Chile with the Company being a leader in deploying a new sustainable lithium production method in the country, along with financial returns to the State and local communities, employment and economic growth in the region, technical development and value adding opportunities
The Company will maintain an ongoing dialogue with the relevant Government authorities over the coming months with a view to having the Application accepted for direct negotiation by April 2025 and then having the CEOL awarded around mid-year 2025.
Steve Kesler, Executive Chairman, CleanTech Lithium said: ‘We believe that our CEOL application fully complies with the criteria established by the Mining Ministry to enter the simplified procedure and direct negotiation. We think this marks a major step towards advancing sustainable lithium supply from Chile to the global battery and EV market. CleanTech Lithium has undertaken extensive work on the Project over the past 4 years. With the recent announcement of high-grade lithium carbonate production from Laguna Verde brine and with the pre-feasibility study expected to complete end of March, we believe we are extremely well-placed to engage with strategic partners and move the Project forward towards the production of lithium carbonate in a sustainable manner.
‘Finally, I would like to thank the local community leaders who have supported our CEOL application. We believe this reflects the approach we have taken as a Company to work alongside the communities – and local universities – in a collaborative and open manner and this is a key part of our story in the Application.’
Further Details:
As stated in the RNS of 27 September 2024, the Chile Government prioritised 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 production. The Ministry of Mining set out certain criteria that companies must meet to enter a simplified procedure and direct negotiation with Government for award of a CEOL rather than through a public tender. The Government will award one CEOL per saline system.
These criteria include:
Demonstrating experience in all or any of the following areas – Exploration in mining, mining exploitation, participation in lithium refining or development of value-added lithium products: In the CEOL application the Company provides details of our work in exploration for lithium in Chile which has led to declaration of a substantial resource at Laguna Verde. The criteria for experience in mining exploitation requires that the applicant have developed or be developing a lithium project with a minimum construction capex of US$100million and with a minimum production capacity of 5,000tpa lithium carbonate equivalent (‘LCE’) and state at which stage of development is the project. CleanTech Lithium is at PFS stage in the development of Laguna Verde having completed a scoping study with production rate of 20,000tpa LCE with an estimated capex at that time of about US$400million. The Company thus meets the experience criteria in exploration in mining and in mining exploitation.
Financial capacity: Each applicant must show it has more than US$30m equity across financial accounts on average over the past two years and a debt-to-equity ratio of a maximum of 1.2. In the CEOL application CleanTech Lithium provides the audited balance sheets and income statements that demonstrate these criteria have been met. Furthermore, the application provides details of how the Company intends to finance the construction of the Laguna Verde project.
Holding mining concessions for exploration and exploitation equivalent to 80% or more of the area of the polygon corresponding to each saline system: In the case of overlapping concessions only the concessions with priority will be counted. The Ministry provided the georeferenced vertices of the polygon for Laguna Verde that the Ministry will use to measure the percentage of mining property required to access the simplified procedure. However, this polygon has a referential nature for the purpose of determining the area over which the CEOL will be granted and can be modified by virtue of an indigenous consultation process and the agreements reached by the Ministry and the applicant company. Within the CEOL application CleanTech Lithium has submitted a proposed polygon in which ASL has over 80% of the exploration and exploitation licences with priority. As further support, three of the indigenous communities have provided letters to the Ministry supporting CleanTech Lithium´s application including the proposed polygon for the CEOL area.
Indigenous consultations: The Government stated that it would undertake consultation with indigenous communities potentially affected by development of lithium projects on each of the six prioritised salt flats. This consultation process commenced in October 2024 and was expected to take 6-8 months. If the Government and applicant reach agreement on the CEOL, it would be signed once the indigenous consultation is completed and would incorporate any agreements reached during the consultation process. CleanTech Lithium has a close working relationship with local indigenous communities and in December 2023 signed an alliance agreement with three of those communities. The CleanTech Lithium application includes details of our robust plans to collaborate and form lasting partnerships with indigenous groups and communities directly affected by project operations and includes letters of support from the communities of the alliance agreement.
CleanTech Lithium believes it is fully compliant with these criteria to enter the simplified procedure. The Board’s track record with successfully developing and operating commercial mining projects, the Company’s commitment to sustainable production through use of DLE and renewable energy and establishing partnerships with local communities position the Company in a very strong position to be granted the CEOL for Laguna Verde.
CEOL Award Mechanism – The simplified procedure
Submission of applications close on 31 January 2025. The Ministry IT and legal departments then have 5 business days to register and organise the submittal. The Ministry´s Lithium and Salar Unit then has 45 business days to review and analyse the request. Once this analysis is completed and the Lithium and Salar Unit verifies that all the information and documents needed to enter the simplified procedure have been submitted then an administrative act to accept the application will be prepared. This timetable indicates that, provided all information in the Company application is accepted, then CleanTech Lithium will enter direct negotiation on the CEOL with the Ministry by mid-April 2025.
Following acceptance of the submittal, a preliminary CEOL draft will be sent to the applicant and the Lithium and Salar Unit has 60 business days to negotiate a final CEOL and issue its opinion on the advisability of entering a CEOL with the applicant. If approved a Supreme Decree awarding the CEOL will be drafted. This timetable indicates that the CEOL should be awarded in July 2025.
The CEOL process is a critical step in fulfilling the Government’s vision of making Chile a leader in sustainable lithium production. The awarding of a CEOL to CleanTech Lithium will support the global energy transition while protecting local ecosystems and advancing community development. CleanTech Lithium shares this vision and remains committed to playing an integral role in realising Chile’s National Lithium Strategy.
For more information, visit the Ministry of Mining’s website at www.minmineria.cl or explore the government’s lithium strategy updates at Hacienda Chile.
For further information contact:
CleanTech Lithium PLC
Steve Kesler/Gordon Stein/Nick Baxter
Jersey office: +44 (0) 1534 668 321
Chile office: +56 9 312 00081
Or via Celicourt
Celicourt Communications
Felicity Winkles/Philip Dennis/Ali AlQahtani
+44 (0) 20 7770 6424
cleantech@celicourt.uk
Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish/Asia Szusciak
+44 (0) 20 7628 3396
Fox-Davies Capital Limited (Joint Broker)
Daniel Fox-Davies
+44 (0) 20 3884 8450
daniel@fox-davies.com
Canaccord Genuity (Joint Broker)
James Asensio
+44 (0) 20 7523 4680
Beaumont Cornish Limited (‘Beaumont Cornish’) is the Company’s Nominated Adviser and is authorised and regulated by the FCA. Beaumont Cornish’s responsibilities as the Company’s Nominated Adviser, including a responsibility to advise and guide the Company on its responsibilities under the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed solely to the London Stock Exchange. Beaumont Cornish is not acting for and will not be responsible to any other persons for providing protections afforded to customers of Beaumont Cornish nor for advising them in relation to the proposed arrangements described in this announcement or any matter referred to in it.
Notes
CleanTech Lithium (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF) is an exploration and development company advancing lithium projects in Chile for the clean energy transition. Committed to net-zero, CleanTech Lithium’s mission is to become a new supplier of battery grade lithium using Direct Lithium Extraction technology powered by renewable energy.
CleanTech Lithium has two key lithium projects in Chile, Laguna Verde and Viento Andino, and exploration stage projects in Llamara and Arenas Blancas (Salar de Atacama), located in the lithium triangle, a leading centre for battery grade lithium production. The two most advanced projects: Laguna Verde and Viento Andino are situated within basins controlled by the Company, which affords significant potential development and operational advantages. All four projects have good access to existing infrastructure.
CleanTech Lithium is committed to utilising Direct Lithium Extraction with reinjection of spent brine resulting in no aquifer depletion. Direct Lithium Extraction is a transformative technology which removes lithium from brine with higher recoveries, short development lead times and no extensive evaporation pond construction. www.ctlithium.com
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