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SMALL CAP SHARE IDEAS: Newly-listed CleanTech Lithium

If there’s one place in the world that’s synonymous with production of the world’s number one green commodity, it’s the area known as the Lithium Triangle. 

Why a triangle? Because it straddles the three-way border between Chile, Argentina and Bolivia.

On most reckonings, this part of the world holds around 75 per cent of the world’s known lithium resources, and some of the world’s leading lithium production companies have long been established there.

Pictured: An evaporation pond used to measure lithium and other minerals levels sits in the Uyuni salt desert near Colchani, Bolivia

But there’s still plenty of open ground and room for newcomers, especially on the mining-friendly Chilean side of the Triangle.

The latest company to venture into the area is CleanTech Lithium, which listed on Aim in the middle of March.

CleanTech Lithium has two projects in the southern tip of the Triangle.

Their combined area amounts to around 180 square kilometres, or ‘twice the size of Central Paris’, as chief executive Aldo Boitano poetically puts it.

It’s a big landholding and at the Laguna Verde licences there’s already a 1.2million tonne JORC resource, so CleanTech isn’t starting from scratch – it’s already up and running and ticking boxes.

Which is why, supported by strong sentiment towards green commodities, a great address, a solid resource base, and a clear timeline to production, CleanTech’s shares got off to a solid start on their first day of dealing last month.

And, with the newsflow that Aldo Boitano’s got lined up for the company, the support he’s already found ought to continue on throughout the current year and into the next.

The plan, ultimately, is to get into production by the end of 2024. But it’s the manner of execution that’ll really impress investors. Because this is likely to be about as close to zero-carbon emissions an operation as you’re likely to get.

And given that the end product is also destined for use in greening the economy, the ESG credits being built up here are significant.

One key to that low level of emissions is the location.

We’ve already mentioned that activity in the Lithium Triangle is widespread, but towards the southern tip, where CleanTech is, there’s also a fair amount of activity in gold and base metals mining.

Gold mining giant Kinross isn’t far away, for example. Those other miners have already created a fair amount of electrical infrastructure, like substations, for CleanTech to tap into.

How much it will need to do so, though, remains moot, as there is the potential for the company to tap geothermal power from its ground.

More generally, Chile arguably offers the most renewable electric grid of any country in the world, and makes extensive use of solar, geothermal and hydroelectric power.

And the green credentials don’t end there, because CleanTech is pursuing a different production route from most of its peers in the Lithium Triangle.

Not for CleanTech Lithium the time-intensive, water-intensive method of extraction from brines that uses ponds.

Instead, CleanTech will use a direct lithium extraction technology. The trade-offs here aren’t just green, either.

‘The traditional way of working extracts around 40 per cent of the lithium’ says Boitano.

‘We skip the ponds with a mechanical and chemical process. The opex is larger, because it’s more energy intensive, but we’re saving a lot of capex.’

Put another way, the company won’t be tying up a year or more’s worth of production as it processes in ponds, but it will have to pay for more plant and machinery to run.

All-in, though, that proposition still ought to look pretty compelling to investors, particularly in London where there’s a high level of awareness about green issues in investing.

So, what’s next? Drilling results earlier this month confirmed the presence of sub-surface aquifers at both the CleanTech projects.

Unlike most companies operating on brine projects, CleanTech is fortunate in that it controls the whole basin in which its asset lies.

This allows it room for manoeuvre when it comes to extraction, and also means that there is no issue putting back the lithium-free brines where they came from after extraction has taken place – simple.

The £5.6million that CleanTech raised on its listing will be put towards taking the company through the feasibility stage.

In the more immediate term, an update to the resource estimate at Laguna Verde, and a maiden resource at Francisco Basin can be expected.

‘We’re fully-funded to the pre-engineering and construction,’ says Boitano.

A final decision on exactly how much CleanTech will produce is some way down the line, but it could be in the order of 5,000 or 10,000 or even 20,000 tonnes of lithium carbonate equivalent per year.

Off-takers are already taking an interest, and you get the feeling that in this investment climate, CleanTech’s projects ought not to be hard to finance. Watch this space. 

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Read more at DailyMail.co.uk