REG - CleanTech Lithium - Final Results
21/05/2024 07:00
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RNS Number : 1902P CleanTech Lithium PLC 21 May 2024
21 May 2024
CleanTech Lithium PLC
("CleanTech Lithium", "CTL" or the "Company")
Final Results 2023
CleanTech Lithium PLC (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF), an exploration
and development company advancing lithium projects in Chile, is pleased to
announce its audited Final Results for the twelve months to 31 December 2023.
Highlights
Operational
• Two Scoping Studies completed: Laguna Verde and Francisco Basin Scoping
Studies show robust economics, with post-tax NPV(8) ~US$3bn and IRR >43%
supporting 20,000tpa LCE production for +30-year and +12-year operations
respectively.
• JORC resource increase: Completed additional 7 well drilling programme -
Laguna Verde, 1.8 million tonnes of LCE (Measured & Indicated Resource
increased by 39% to 1.1 million tonnes LCE) and Francisco Basin 0.92 million
tonnes of LCE of which 0.44 million tonnes was upgraded to Indicated.
• DLE pilot plant: Plant working ahead of expectations, with first high quality
lithium eluate produced post-period end, after build and commissioning
undertaken in 2023 and early 2024.
• CEOL submission: Applications for operating permits for Laguna Verde and
Francisco Basin submitted in Sept 2023 and now being updated in line with the
new administrative procedure announced by the Government post-period end in
April 2024.
• Ongoing drilling programme at Laguna Verde: Five well drilling programme
commenced post-period end, results of which will feed into further resource
update and Pre-Feasibility Study (PFS).
• Laguna Verde PFS and EIA: Underway and targeted for completion Q3 2024 and end
of 2024 respectively.
• Exploration assets: Low-cost work programme undertaken at Llamara project to
test surface and subsurface samples.
• Expanded footprint in Chile: Obtained additional Salar de Atacama licence
areas.
• First Co-Developed Mining Model: For lithium extraction signed with Ercilia
Araya Altamirano, Ancestral Authority of the Colla Pai-Ote community, and
representatives from the Río Jorquera and Pastos Grandes communities.
• Local Operations & Community office: Opened in Copiapó in Q3 2023, with
local staff employed to manage upkeep and activities with local stakeholders.
• 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 2023 or 2024 to date.
• Management & Staff: 22 full time employees, with up to an additional 5
specialist consultants employed by the Company by the end of 2023.
Corporate
• Funding: Raised £8 million in the calendar year 2023.
• Board changes: Maha Daoudi and Tommy McKeith appointed as independent
non-executive directors; Jonathan Morley-Kirk became Senior Independent
Director and Steve Kesler assumed the role of Executive Chairman and post
period end as Interim CEO following the resignation of Aldo Boitano.
• OTCQX: Commenced trading in the U.S. making it easier for North American
investors.
• ESG Committee: Established in mid 2023 and reporting to the Board to ensure
the Company is being held accountable across all ESG factors. The Committee
meets regularly and is producing an ESG Review.
• Signatory of UN Global Compact: In August 2023, supporting the Ten Principles
of the United Nations Global Compact on human rights, labour, environment and
anti-corruption.
• Awarded: Green Achievement Grand Prix Award at Huawei's - 'Green & Smart
Mining: the Future is Here!' Green Achievement Awards 2023, Chile.
• Cash Position: £6.2 million at year-end 2023.
Steve Kesler, Chairman and Interim Chief Executive Officer, CleanTech Lithium
PLC, said:
"2023 saw CTL make meaningful progress towards reaching commercial lithium
production. During the year CTL significantly advanced project delivery,
achieving several milestones which include the publication of positive scoping
studies on the Company's two core-development assets, Laguna Verde (LV) and
Francisco Basin (FB), and the completion of drilling programmes on both
assets, totalling 7 new wells. JORC compliant resources were upgraded at both
projects.
"A DLE pilot plant was constructed in Copiapó and CTL is now among a small
number of companies set to produce meaningful quantities of battery grade
lithium product at demonstration scale using DLE. The pilot plant is working
well and above expectations, representing a very significant milestone for the
Company and reflecting the progress we have made in the relatively short time
since listing on AIM just over two years ago.
"In the year ahead CTL will send battery grade lithium samples to potential
strategic partners and off-takers to start product qualification, as part of
the development of the construction finance to bring Laguna Verde into
operation. The current drilling programme at LV will feed into a further
resource assessment and a maiden reserve estimation this year, supporting the
pre-feasibility study (PFS), which is underway and targeted for completion in
Q3 2024. This paves the way for the next phase of development, as the Company
advances towards the ambition to deliver a premium ´green´ lithium product
into a market that's increasingly keen to demonstrate a sustainable supply
chain of battery materials".
A full version of the annual report and accounts will shortly be available on
the Company's website, accessible via the link and with extracts set out
below: https://ctlithium.com/investors/latest-presentation-report/
(https://ctlithium.com/investors/latest-presentation-report/)
For further information contact:
CleanTech Lithium PLC Jersey office: +44 (0) 1534 668 321
Steve Kesler/Gordon Stein/Nick Baxter Chile office: +562-32239222
Or via Celicourt
Celicourt Communications +44 (0) 20 7770 6424
Felicity Winkles/Philip Dennis / Ali AlQahtani cleantech@celicourt.uk
Beaumont Cornish Limited (Nominated Adviser) +44 (0) 207 628 3396
Roland Cornish / Asia Szusciak
Canaccord Genuity (Joint Broker) +44 (0) 207 523 4680
James Asensio
Fox-Davies Capital Limited (Joint Broker) +44 (0) 20 3884 8450
Daniel Fox-Davies daniel@fox-davies.com
The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No
596/2014 which is part of UK law by virtue of the European Union (Withdrawal)
Act 2018. Upon publication of this announcement, this inside information is
now considered to be in the public domain. The person who arranged for the
release of this announcement on behalf of the Company was Gordon Stein,
Director and CFO.
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 sustainable lithium projects in Chile for the
clean energy transition. Committed to net-zero, CleanTech Lithium's mission is
to produce material quantities of sustainable battery grade lithium products
using Direct Lithium Extraction technology powered by renewable energy. The
Company plans to be a leading supplier of 'green' lithium to the EV and
battery manufacturing market.
CleanTech Lithium has two key lithium projects, Laguna Verde and Francisco
Basin, and holds licences in Llamara and Salar de Atacama, located in the
lithium triangle, a leading centre for battery grade lithium production. 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 with reinjection of spent brine. Direct Lithium
Extraction is a transformative technology which removes lithium from brine,
with higher recoveries than conventional processes. The method offers short
development lead times with no extensive site construction or evaporation pond
development so there is minimal water depletion from the aquifer.
www.ctlithium.com
Chairman and Interim CEO Statement
2023 saw CTL make meaningful progress towards reaching commercial lithium
production. It is recognised that some deliverables have taken longer than
anticipated but this is often the case with projects applying technologies
which require new learnings. During the year CTL significantly advanced
project delivery, achieving several milestones which include the publication
of positive scoping studies on the Company's two core-development assets,
Laguna Verde (LV) and Francisco Basin (FB), and the completion of drilling
programmes on both assets, totalling 7 new wells. JORC compliant resources
were upgraded at both projects.
A DLE pilot plant was constructed in Copiapó and CTL is now among a small
number of companies set to produce meaningful quantities of battery grade
lithium product at demonstration scale using DLE. The pilot plant is working
well and above expectations, having been used to produce an initial 24m(3) of
concentrated eluate, for conversion into battery grade lithium carbonate, post
commissioning in Q2 2024. The composition of the concentrated eluate shows a
lithium adsorption recovery rate of 94% and rejection rates over 99% for key
contaminants calcium, magnesium, potassium, sodium and sulphate. The results
reported post period end in May 2024 demonstrates that the plant can operate
at the designed capacity of concentrated eluate production sufficient for
conversion to at least 1 tonne per month of battery grade lithium carbonate.
The DLE pilot plant results represent a very significant milestone for the
Company and reflects the progress CTL has made in the relatively short time
since listing on AIM just over two years ago.
In the year ahead CTL will send battery grade lithium samples to potential
strategic partners and off-takers to start product qualification, as part of
the development of the construction finance to bring Laguna Verde into
operation. The current drilling programme at LV will feed into a further
resource assessment and a maiden reserve estimation this year, supporting the
pre-feasibility study (PFS), which is underway and targeted for completion in
Q3 2024. This paves the way for the next phase of development, as the Company
advances towards the ambition to deliver a premium ´green´ lithium product
into a market that's increasingly keen to demonstrate a sustainable supply
chain of battery materials.
Operations
Projects:
Laguna Verde ('LV')
A Scoping Study was completed and the results announced in January 2023.
Although such a study is low level and does not provide certainty that the
conclusions will be reached, it projected robust economics and ESG
credentials. The study assumed that the resource could support a production
rate of 20,000tpa lithium carbonate. Estimated operating costs at under
US$4,000/t were in the lower quartile of lithium producers, with estimated
capital cost around US$400 million. Using a long-term price of US$22,500/t
lithium carbonate, the study estimated a post-tax NPV of US$1.8 billion and
post-tax IRR of 45%. The results of this Scoping Study were positive enough to
demonstrate that progress to a PFS can be reasonably justified. The PFS is
underway and the Company aims to complete it in Q3 2024.
By the end of the first quarter 2023, the Company had drilled two additional
wells on Laguna Verde, bringing the total number of wells drilled to six.
Wells completed in 2023 included LV04 (drilled in 2022), LV05 and LV06, with
depths of 320m, 434m and 405m respectively, one aim of which was to support an
upgrade to the Measured and Indicated JORC compliant resource for use in the
PFS. LV04 showed only low lithium values, which demonstrated it to be outside
the area of lithium brine of interest and was discarded from the resource
estimation.
Large samples were also taken from LV05 and LV06 to provide brine feed for the
DLE process trials. Pump tests were completed on these wells in May 2023 with
calculated transmissivity supporting the use of well flow rates of 30l/s used
in the LV Scoping Study.
The completed drilling programme resulted in the declaration of a JORC
compliant resource upgrade in July 2023 of 1.8 million tonnes LCE at a grade
of 200mg/l Li, of which the Measured & Indicated category was 1.1 million
tonnes, representing a 39% increase over the prior estimate, at a grade of 196
mg/l Li. This resource was considered sufficient to reasonably support
evaluation in the Scoping Study of a production scenario of 20,000 tpa lithium
carbonate for 30 years.
Post period end, a further five well drill programme commenced, with two rigs
in simultaneous operation. This programme is largely aimed at converting
Inferred resource to additional Measured & Indicated resource which will
then have technical and economic modifying factors applied from the PFS to
determine a maiden reserve. The programme will also include additional pump
testing and reinjection testing with results helping to calibrate the
hydrogeological model of the basin. This model will help further define the
brine extraction and reinjection wellfield design and the sustainable
production rate from LV. Leading consultants, Montgomery & Associates have
been engaged to manage the drill programme, JORC resource and reserves
reporting and design of the extraction and reinjection wellfields.
In April 2024, CTL also completed the planned acquisition of 23 licences at
Laguna Verde which were previously subject to an option agreement and are
located at the heart of the project area. With CTL now owning 100% of all the
108 licences covering the Laguna Verde Project this will both support CTL's
CEOL applications and further clear the path for the planned ASX listing. The
terms of the acquisition in the Directors' opinion were more favourable to CTL
shareholders than the previous option agreement. Payment amounts are now known
with the greater part due only when the Company is revenue generating in
production. The previous option agreement depended on an estimate of
´commercially extractable lithium products´ with full payment due at the
start of construction and as it was an open-ended arrangement it did not
conform to current ASX listing requirements.
Francisco Basin ('FB')
Five additional wells were drilled on FB early 2023 - FB02, FB03/03A, FB04,
FB05 and FB06 - with depths ranging from 320m to 462m, bringing the total
number of wells drilled to six. The results from these wells fed into an
upgraded resource estimate, announced in August, and supported the subsequent
Scoping Study, announced in September 2023.
The JORC resource upgrade attributed 0.92 million tonnes of LCE at a grade of
207 mg/l Li as Indicated and Inferred, representing a 74% increase over the
prior estimate. In the Indicated category, the report attributed an upgrade to
0.44 million tonnes at a grade of 221mg/l Li. The Scoping Study considered
that the resource estimate could support production of 20,000 tpa of lithium
carbonate for 12 years. Further drilling is planned to increase the resource
and the projected life of the Francisco Basin project.
A sampling programme was undertaken on FB01 with 1000 litres for DLE process
trials using the Company's lab-based unit in Copiapó. A pump test was also
completed on FB01, with the results announced in May 2023, recording a high
level of transmissivity, supporting a well pumping rate of 30l/s used in the
FB Scoping Study.
The Scoping Study, albeit low level and does not provide certainty that the
conclusions will be reached, projected robust economics for FB. The study
assumed that the resource could support a production rate of 20,000tpa lithium
carbonate. Estimated operating costs were lower quartile and less than
US$4,000/t lithium carbonate and capital costs were estimated at about US$450
million. Using a long-term price of US$22,500/t lithium carbonate the study
estimated a post-tax NPV of US$1.1 billion and a post-tax IRR of 43%.
It was decided to suspend further work at FB at the present time and utilise
available funds to advance the LV project as rapidly as possible. Design
parameters for LV in terms of extraction and reinjection well design, DLE and
conversion process design as well as other infrastructure will be directly
applicable to FB. It will be more efficient to optimise these for LV and then
replicate them at FB.
Greenfield Exploration Assets
During the year CTL invested in its long-term future through the low-cost work
programme on the Llamara exploration licences and by obtaining additional
licences on the periphery of Salar de Atacama. These assets offer material
opportunities and provide potential upside for the Company while requiring
relatively small amounts of near-term capital.
Llamara is a large exploration area for which the Company acquired the
exploration licences at low cost as an option offering good prospectivity to
complement CTL's two core-development assets.
The work programme on Llamara in 2023 aimed to test surface and subsurface
samples. Drilling commenced as planned but had to be suspended for safety
reasons due to encountering a gas pocket. A second well then commenced and was
successfully drilled but subsurface sampling from the well indicated depleted
levels of lithium. The results of surface sampling also showed relatively low
lithium values. Further work at Llamara and Salar de Atacama have been
suspended whilst available funds are concentrated on advancing Laguna
Verde.
DLE Pilot Plant
A lab scale DLE plant was installed in our Copiapó facilities in Q4 2022 and
used during 2023 for testing of various adsorbents on the LV brine. CTL then
proceeded with commissioning of a pilot plant scale DLE plant. The plant was
ordered from Sunresin's facility in Europe earlier in the year and
installation started in Q3 2023. Construction was completed in November and
the DLE pilot plant fully commissioned in Q1 2024 with technical experts on
site from Puritech, a subsidiary of Sunresin. The Company announced, in
March 2024, that the pilot plant is producing lithium chloride eluate from LV
brine with the eluate to be further processed downstream to produce
battery-grade lithium carbonate.
After testing of various adsorbents to determine which performed best on the
LV brine it was decided to purchase adsorbent from Lanshen, another large
Chinese producer of adsorbents and resins, to load the pilot plant columns.
The pilot plant is designed to produce up to 1 tonne/month of LCE and has
demonstrated it can deliver more than this in initial operations. The pilot
plant is now processing brine into purified lithium chloride eluate and
showing encouraging results with high lithium recovery rates while rejecting
impurities. Post period end, in Q2 2024, the concentrated eluate has been
further concentrated by reverse osmosis at CTL's pilot plant and the first
batch of 24m3 shipped to Conductive Energy in Chicago for conversion to
battery grade lithium carbonate. The Company will initially scale production
in batches for the start of product qualification testing by potential
off-takers and strategic partners and ramp up production as required by the
qualification process. The pilot plant will also provide design data for the
Laguna Verde PFS. This represents a significant milestone for CTL as it
materially de-risks the scale up of commercial DLE based production, for the
Company, its investors and potential offtake partners ahead of moving towards
commercial production.
Special Lithium Operation Contracts (CEOLs)
Applications for Special Lithium Operation Contracts, or CEOLs, for LV and FB
were submitted in September 2023 in compliance with Chilean law and as
encouraged by the relevant authorities after regular dialogue. Upon award,
CEOLs provide the authority for the CEOL holder to exploit, produce and sell
lithium on behalf of the State which is paid an agreed royalty based on net
profits arising from the project.
In April 2023 the Government issued its National Lithium Strategy whereby it
signalled its intent to become an active participant in lithium production in
Chile and not just a passive receiver of royalties. There was initial
uncertainty as to how this would unfold but the Government provided more
clarity in April 2024 by confirming its intent to become majority shareholder
in the strategic assets of Salar de Atacama and Maricunga through a newly
created lithium subsidiary of Codelco. It was also confirmed, that the State
mining companies Codelco and Enami, who have interests in six other salars,
would seek participation from the private sector under JV arrangements that
made the best sense for each project. Additionally, another 26 salars
considered non-strategic, including Laguna Verde and Francisco Basin, were
confirmed to be opened for development by the private sector.
An administrative procedure was later published whereby "Expressions of
Interest" are to be submitted by mid-June 2024 with the Government expected to
announce the results in early July and to confirm which projects are to be
prioritised for the award of CEOLs. Afterwards, CTL was advised to update its
submissions for CEOLs within the new administrative procedure. The Company is
updating the CEOL applications with recent information ready to submit. The
resubmission process is expected to have no impact on the expected project
timeline.
The Government has also announced that it wants to see 3 or 4 new lithium
projects operational by 2026. CTL's two advanced projects are well ahead of
any other lithium projects of similar scale in Chile and can therefore be
expected to be prioritised by the Government.
To support the CEOL applications, the Company has continued to place CTL in
the very best possible position through a process of regional engagement and
support for the local economy. The Company has a policy of employing local
people where possible and ensuring the economic benefit of developing its
assets is felt across the region and that any concerns and impact are
sensitively managed. The Company announced a ground-breaking agreement in
December 2023, for the first co-created mining model for lithium extraction in
the region, working together with Ercilia Araya Altamirano, Ancestral
Authority of the Colla Pai-Ote community, and representatives from the Río
Jorquera and Pastos Grandes communities. The communities have agreed to
collaborate with CTL on drafting relevant sections of the EIA for Laguna
Verde, which is the first time this approach has been adopted in Chile for
lithium extraction. This is a positive factor that CTL is hopeful will
accelerate the approval process of the EIA as demonstrating local community
support, which is of critical importance to the authorities.
Furthermore, the Company's focus on DLE, as the mechanism to produce LCE, is
in keeping with the National Lithium Strategy to ensure sustainable lithium
production as announced by President Boric in April 2023. Having been an early
adopter of the technology, CTL is well placed to deliver on successful DLE
based brine projects in Chile.
The granting of the CEOLs in 2024 will be an important stepping stone to
production and the delivery of a strategic partner to support
commercialisation of the Company's projects. CTL will continue to work with
the relevant authorities within the scope of the National Lithium Strategy,
which the Company sees as a welcome model for public-private partnership, as
helping de-risk the delivery of lithium projects in Chile.
Corporate Activity
CTL has continually sought to carefully allocate capital to meet its needs and
achieve the goal of delivering commercial production and cashflows as early as
possible. CTL has, therefore, sought to raise funds from investors only when
needed to advance project development and so minimising dilution to investors.
The strategy has been to fund exploration and early project development
through equity and then, following completion of the PFS and commissioning of
the pilot plant, bring in a strategic investor. The planned listing on the ASX
in Australia is in keeping with this. In addition to CTL having key investors
already in Australia, the ASX market also benefits from a strong understanding
of the mining industry and lithium sector with deep pools of capital available
for good projects and where many of the Company's lithium peers are
listed.
ESG
In-line with the development of CTL's projects, the team in Chile expanded
during the year and the Company opened an operational office in Copiapó. At
the end of the year the team amounted to 22 full time employees, with up to an
additional 5 specialist consultants employed by the Company over the course of
2023.
The wider team includes operational, technical, legal and administration
staff. It also includes sustainability support which is key to CTL's right to
operate and ability to deliver. The community relations team made an immediate
and positive impact on the Company driving initiatives which help inform and
keep local and national parties supportive of our objectives.
These efforts were supported by the creation of an ESG Board committee during
the year, which has oversight of sustainability initiatives and reports to the
wider Board. The Company winning the 'Green Achievement Grand Prix Award' at
Huawei's 'Green & Smart Mining: the future is here' awards, which took
place in Chile in December, is a good reflection of this work.
Key to making progress is effective decision making and accountability across
the business. In this regard CTL has in place a strong Board with a good
balance of executive and independent non-executive directors each of whom
comes with valuable and differing experience which makes a material difference
to the strategic direction and running of the business.
During the year, I was delighted to see the Board strengthen further with the
appointment of Maha Daoudi and Tommy McKeith as independent non-executive
directors. Maha has many years of experience in commodity marketing and
trading with a deep knowledge of working in China. Tommy has considerable
experience in exploration and project development and comes with extensive
mining listed company experience in Australia. Both have already made
invaluable contributions. During the year, Jonathan Morley-Kirk also stepped
up to become the Senior Independent Director, following my change of role to
an executive position.
Post-period end I have taken on the responsibilities of CEO, on an interim
basis, following the resignation of Aldo Boitano. Despite the circumstances
of his departure he, as co-founder, did a tremendous amount to develop a
vision for the Company and create the opportunity for investors. For this we
are all grateful.
I would like to take the opportunity to thank the Board, the wider team,
shareholders, and suppliers for their continued support over the last year.
The Company is on a journey and a long way down the path to delivering on its
ambitions. This is entirely down to the experience, skill set, support and
tireless effort put in by all those involved.
Outlook
CTL has an exciting year ahead of us leading up to discussions with strategic
partners later in the year. A lot has been achieved and in a relatively short
time and, as such, the Company is well placed to realise the value of its
portfolio to the benefit of its investors and other stakeholders. That
progress has accelerated further in 2024 with the commissioning of the pilot
plant, the LV PFS progressing, the CEOL process in train and with the lithium
market showing signs of recovery. We look forward to the remainder of 2024
with continued confidence.
Steve Kesler,
Executive Chairman and Interim CEO
20 May 2024
Financial Review
Key Drivers for 2023
In the context of managing CTL's funds in an efficient and effective manner,
the focus during 2023 was primarily twofold: to maintain progress and momentum
on the Group's two main assets, namely: LV and FB; and to carry out the work
needed for an initial technical assessment of the Llamara licences.
The Board has made clear its commitment to bringing LV into production as a
priority, with FB to follow as soon thereafter as feasible. In addition, the
Board has set targets and programmes to meet those objectives which are both
ambitious but also achievable. With sufficient funds the Board is confident
the technical, feasibility, environmental, regulatory and other approvals can
be combined to allow CTL to meet its objective of transitioning into a leading
lithium production company.
Without doubt, CTL has been the most active lithium exploration and
development player in Chile over the past two to three years:
• Undertaking geophysical and multiple technical studies in preparation for
subsequent phases on each asset
• Drilling 14 wells in three challenging environments to deliver a combined
total of 2.7 million tonnes LCE JORC Resource - including undertaking pump
tests and other hydrogeological studies
• Completing two detailed scoping studies which demonstrate exciting and robust
economics at industry-standard forward lithium prices; in turn enabling the
preparation of a PFS for LV which CTL plans to complete in Q3 2024
• Procuring, shipping, constructing and then commissioning a 1 tonne per month
DLE pilot plant - acquired from a Sunresin subsidiary in Belgium
• Commencing the work required to support the EIAs for LV and FB - involving
extensive baseline studies
• Conducting metallurgical tests - both at lab-scale level and also on the
ground at LV and FB, and
• Building a skilled and experienced management, operational and technical team
in Chile to be able to deliver on the planned objectives, including the use of
various consultants and specialist service companies.
All of this comes at a cost and requires the funds to maintain momentum
towards meeting the Board's objectives. At the time of writing, CTL has spent
more than £16 million in Chile on its work programmes over recent years.
Funding in 2023 and Strategy Beyond
CTL began 2023 with £12.4 million cash-in-hand after completing a £12.3
million fundraise (before expenses) in November 2022. That funding allowed CTL
to undertake the extensive work programme, referred to above, throughout the
year. Whilst the Company originally intended to dual list on the ASX during
the second half of 2023, the rate at which several regulatory requirements
with ASX could be addressed was slower than CTL would have liked, and so CTL
had little choice but to defer any planned listing on the ASX until 2024. The
requirement for CTL to have to make commercial changes to the LV Option
Agreement, as announced on 22 April 2024, also held up the planned ASX
listing.
To keep up momentum on the multiple capital programmes being run, CTL
completed an over-subscribed placing on AIM in December 2023, raising £8.5
million (before expenses). This included £0.5 million raised through an open
offer which allowed eligible shareholders to subscribe for placing shares on
similar terms to those institutional investors which had participated. That
funding allowed CTL to commit resources at the end of 2023 to allow it to
begin an extensive programme in Q1 2024 (including a five-well drilling
campaign at LV, a continuation of its EIA monitoring and review requirements,
a more activated PFS process and the progression of CTL's DLE pilot plant
through to commissioning and eluate production), all in the context of
prioritising LV toward production. The Company ended 2023 with £6.2 million
cash-in-hand.
The Company still plans to dual list on ASX in 2024; with the majority of the
administrative and regulatory hurdles now addressed, the listing process is
considered to be in a reasonably advanced stage at the time of writing. The
Company will need to undertake an equity raise as part of that process, in
large part to meet an ASX requirement to have a certain number of new
Australian based shareholders. The amount of any fundraising on ASX is not
yet decided and will invariably be considered in the context of other funding
options.
The Board, which has extensive experience in funding major projects, looks
forward to discussions with potential strategic partners and parties seeking
offtake later in 2024, knowing the Company will be negotiating from a position
of strength at that time and with a product such parties will want to
secure.
Overview of 2023 expenditure
Capex: Exploration & Evaluation assets
A total cash capex of £8.9 million was incurred in 2023 (2022: £4.4
million), made up as follows:
Capital expenditure Comment 2023 2022
£ million £ million
Drilling In 2023, 7 wells completed on LV & FB. 1 on LL 6.19 3.43
Hydrogeology Pump tests 0.57 0.07
DLE Pilot Plant Initial acquisition and resin costs 0.57 0.12
EIA Baseline & other studies 0.38 0.30
Communities Contributions and office refurb. 0.19 -
Scoping & Feasibility LV and FB Scoping Studies, LV PFS 0.29 0.09
Licences All assets 0.56 0.30
Other - 0.10 0.09
Cash cost 8.85 4.40
Income statement
Administrative costs totalled £5.9 million in 2023 (£3.8 million: 2022),
with £4.2 million being cash costs.
Key costs in 2023 included:
Administrative costs 2023 2022
£ million £ million
People Jersey, London & Chile 1.21 0.57
Listing & Compliance AIM and corporate governance 0.34 0.17
Travel Conferences, marketing, travel in Chile 0.88 1.33
PR/IR Includes consulting costs & conferences 0.58 0.12
Legal, finance, tax & audit Including accounting services 0.68 0.33
Other G&A Other overhead costs across the group 0.51 0.09
Cash costs 4.20 2.61
VAT provision Note 12 1.24 0.6
Fair-value of share options Note 14 0.45 0.59
Non-cash costs 1.69 1.19
Total 5.89 3.8
In addition, other comprehensive income includes foreign exchange charges of
approximately £ 1.0 million, which have arisen due to translational and
transactional changes in GBP relative to USD and CLP currency movements.
Statement of financial position
The Group maintains a healthy statement of financial position at 31 December
2023, with net current assets of £6.1 million (2022: £12.1 million)
reflecting current assets of £6.8 million (2022: £12.6 million) and £0.7
million (2022: £0.6 million) of current liabilities.
Financial Control
The Group maintains control over its day-to-day finances through a strong
finance team based in the UK and Chile, supported by outsourced back-office
accounting and tax compliance processes. A Group Financial Controller,
Dermot Boylan, based in the UK, works alongside our Chile-based Finance
Manager, Geraldine Carmona, who manages the finances for our work programmes
in Chile.
Post Balance Sheet Events
On 12 April 2024 the Company announced the resignation of Aldo Boitano after
he made the Company aware that he had entered into a personal loan under which
he agreed to provide security over his shareholding. The granting of security
and subsequent transfers of Ordinary Shares are considered notifiable events
which should have been notified by Mr Boitano to the Company at the relevant
time.
On 22 April 2024 the Company announced it had completed the planned
acquisition of the 23 Laguna Verde licences previously subject to an option
agreement resulting in the Company now having full ownership, as well as
control, of the full 108 mining licences comprising the Laguna Verde project.
On 22 April 2024, the Company also announced it issued convertible loan notes
to raise gross proceeds of £1 million for the Company on what the Directors
believe are advantageous terms. Further details of the convertible loan notes
are set out in the announcement.
On 8 May 2024 the Company announced as far as it can determine, Mr Boitano has
ceased to have any beneficial ownership of shares in the Company.
Gordon Stein
Chief Financial Officer
20 May 2024
Financial Results
Consolidated Statement of Comprehensive Income
Notes Audited Audited
Year ended Year ended
31-Dec-2023 31-Dec-2022
£ £
Income - -
Administrative costs 5 (4,646,803) (3,149,184)
Provision for Chilean VAT recoverable 5 (1,238,798) (644,602)
Operating loss (5,885,600) (3,793,786)
Finance cost - (6,751)
Loss before tax (5,885,600) (3,800,537)
Income tax 7 - -
Loss for the year after tax (5,885,600) (3,800,537)
Other comprehensive (loss) / income:
Foreign exchange differences arising on translation of functional currencies (1,021,070) 337,604
Total comprehensive loss for the year (6,906,670) (3,462,933)
Loss per share
Basic and diluted (GBP £) 8 (0.054) (0.048)
The accompanying notes are an integral part of these consolidated financial
statements.
All amounts are derived from continuing operations
Consolidated Statement of Financial Position
Audited Audited
as at as at
31-Dec-23 31-Dec-22
Notes £ £
Exploration and evaluation assets 11 13,710,413 5,317,412
Non-current assets 13,710,413 5,317,412
Cash and cash equivalents 6,202,028 12,368,265
Trade and other receivables 12 610,898 278,339
Current assets 6,812,926 12,646,604
Trade and other payables 16 (351,637) (440,338)
Provisions and accruals 16 (378,713) (193,408)
Current liabilities (730,350) (633,746)
Net assets 19,792,989 17,330,270
Share capital 13 26,310,625 21,076,155
Capital reserve (77,237) (77,237)
Share based payment reserve 5,713,259 1,578,340
Foreign exchange reserve 17 (705,375) 315,695
Accumulated losses 17 (11,448,283) (5,562,683)
Equity and reserves 19,792,989 17,330,270
The accompanying notes are an integral part of these consolidated financial
statements.
These financial statements were approved and authorised for issue by the Board
of directors on 20 May 2024 and were signed on its behalf by:
Gordon Stein
Chief Financial Officer
20 May 2024
Consolidated Statement of Changes in Equity
Share Capital Capital Reserve Share based payments reserve Foreign exchange reserve Accumulated Total
losses
£ £ £ £ £ £
At 1 January 2022 - 5,313,295 - (21,909) (1,762,146) 3,529,240
Loss for the year - - - - (3,800,537) (3,800,537)
Other comprehensive income - - - 337,604 - 337,604
Total comprehensive loss - - - 337,604 (3,800,537) (3,462,933)
Share options and warrants (989,115) - 1,578,340 - - 589,225
Share-for-share exchange 5,051,201 (5,051,201) - - - -
Shares issued in subsidiaries - (339, 331) - - - (339, 331)
Shares issued 17,014,069 - - - - 17,014,069
31 December 2022 21,076,155 (77,237) 1,578,340 315,695 (5,562,683) 17,330,270
At 1 January 2023 21,076,155 (77,237) 1,578,340 315,695 (5,562,683) 17,330,270
Loss for the year - - - - (5,885,600) (5,885,600)
Other comprehensive loss - - - (1,021,070) - (1,021,070)
Total comprehensive loss - - - (1,021,070) (5,885,600) (6,906,670)
Share options and warrants (3,074,767) - 4,134,919 - 1,060,152
Shares issued 8,309,237 - - - 8,309,237
31 December 2023 26,310,625 (77,237) 5,713,259 (705,375) (11,448,283) 19,792,989
The accompanying notes are an integral part of these consolidated financial
statements.
Consolidated Statement of Consolidated Cash Flows
Audited Audited
Year ended Year ended
31-Dec-2023 31-Dec-2022
£ £
Loss after tax for the period (5,885,600) (3,800,537)
Non-cash items:
Fair value recognition of share options and warrants 527,931 443,690
Movement in trade and other receivables (313,355) (226,877)
Movement in payables, provisions and accruals 262,447 115,412
Finance costs - 6,751
Net cash used in operating activities (5,408,577) (3,461,561)
Expenditure on exploration and evaluation assets 11 (8,851,684) (4,403,228)
Net cash used in investing activities (8,851,684) (4,403,228)
Net proceeds from issue of ordinary shares 13 8,192,346 17,014,069
Finance costs - (6,751)
Net cash generated from financing activities 8,192,346 17,007,318
Net cash flow (6,067,915) 9,142,529
Cash and cash equivalents brought forward 12,368,265 3,230,997
Net cash flow (6,067,915) 9,142,529
Effect of exchange rate changes (98,322) (5,261)
Cash and cash equivalents carried forward 6,202,028 12,368,265
The accompanying notes are an integral part of these consolidated financial
statements.
Notes to the Financial Statements
1. GENERAL INFORMATION
CleanTech Lithium Plc ("CTL Plc", or the "Company")
The consolidated financial statements of CleanTech Lithium Plc for year ended
31 December 2023 were authorised for issue in accordance with a resolution of
the Board on 20 May 2024.
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 year to 31 December 2023, there have been no changes to the
structure of the CleanTech Lithium Group.
2. BASIS OF PREPARATION
The financial statements have been prepared in accordance with U.K.-adopted
international accounting standards (UK IAS). These financial statements are
for the year 1 January 2023 to 31 December 2023 and the comparatives are for
the year 1 January 2022 to 31 December 2022.
Throughout the reporting period, including the comparatives, the historical
cost basis of preparation is used, except for certain financial assets
measured at fair value.
The amounts in this document are presented in British Pounds (GBP), unless
noted otherwise. Due to rounding, numbers presented throughout these financial
statements may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
As permitted by Companies (Jersey) Law 1991 only the consolidated financial
statements are presented.
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 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.
As a part of its Going Concern assessment, consideration has been given to the
Group's anticipated activities which have been included in the financial
forecast. The Group has no capital commitments and so the Directors are of the
opinion that the Group has adequate financial resources to allow it to
continue for at least 12 months from the date of the approval of these
financial statements. Additionally, the Directors have considered downside
scenarios including the event where there is a delay to the expected
generation of cash. In the event of financial distress, the Directors are
confident that the implementation of austerity measures, the proven success in
raising capital, the financing and strategic options available, will enable
the Group to continue as a going concern. Therefore, the going concern basis
is adopted in preparing the financial statements.
The financial statements do not include the adjustments that would result if
the Group and the Company were unable to continue as a going concern.
3. MATERIAL ACCOUNTING POLICIES
The preparation of the Group's financial statements is done in compliance with
U.K. adopted International Accounting Standards and the following summarises
the Group's material accounting policies.
Standards and interpretations issued but not yet applied
At the date of the Group's financial statements, the Directors have reviewed
the standards in issue by the UK Endorsement Board and the International
Financial Reporting Interpretations Committee by the International Accounting
Standards Board, which are effective for periods beginning on or after the
stated effective date but have not yet been applied. In their view, these
standards would not have a material impact on the financial reporting of the
Group.
Foreign currency
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The consolidated financial
statements are presented in pound sterling, which is the Group's presentation
currency.
Transactions and balances
Foreign currency transactions are translated into the relevant functional
currency using the exchange rates prevailing at the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of such
transactions and from the retranslation at period-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
Group companies
The results and financial position of the Chilean entities are recorded in CLP
$ and, where relevant of the Australian entities from AUD $, are translated
into Pounds Sterling (GBP £), the presentation currency, as follows:
• assets and liabilities on the Statement of Financial Position are translated
at the closing rate at each reporting date;
• income and expenses in the Statement of Comprehensive Income are translated at
average exchange rates, unless the average is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in
which case income and expenses are translated at the rate on the dates of the
transactions; and
• all resulting exchange differences are recognised in "other comprehensive
income".
On consolidation, exchange differences arising from the translation of the net
investment in the Chilean entities are recognised in "other comprehensive
income". When a foreign operation is sold, the associated exchange
differences are reclassified to profit or loss, as part of gain or loss on
sales.
Income taxes
Income tax expense consists of current and deferred tax expense. Income tax
expense is recognised in the income statement.
Current tax expense is the expected tax payable on the taxable income for the
year, using tax rates enacted or enacted substantively at the period end, and
adjusted for amendments to tax payable with regards to previous years. The
tax rates that apply in each foreign jurisdiction are disclosed in Note 7
Deferred tax assets and liabilities are recognised for future tax consequences
attributable to differences between the carrying amounts of existing assets
and liabilities on the Statement of Financial Position and their respective
tax bases. Deferred tax assets and liabilities are measured using the enacted
or enacted substantively tax rates expected to apply when the asset is
realised, or the liability settled.
The effect on deferred tax assets and liabilities of a change in tax rates is
recognised in the income statement in the period that substantive enactment
occurs.
A deferred tax asset is recognised to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised.
The following temporary differences do not result in deferred tax assets or
liabilities:
• the initial recognition of goodwill;
• the initial recognition of an asset or liability in a transaction which is not
a business combination;
• the initial recognition of an asset or liability in a transaction which at the
time of the transaction, affects neither accounting profit nor taxable profit
(tax loss); and
• the initial recognition of an asset or liability in a transaction which at the
time of the transaction, does not give rise to equal taxable and deductible
temporary differences.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Exploration and evaluation assets
Exploration and evaluation assets are capitalised as intangible assets on an
individual prospect basis until such time as an economic volume is defined or
the prospect is abandoned. No costs are capitalised until the legal right to
explore the property has been obtained. When it is determined that such costs
will be recouped through development and exploitation, the capitalised
expenditure is first tested for impairment, then transferred to tangible
assets and depreciated over the expected productive life of the asset.
Costs for a producing prospect are amortised on a unit-of-production method,
based on the estimated life of the reserves, while costs for the prospects
abandoned are written-off.
Impairment reviews for deferred exploration and evaluation assets are carried
out on a project-by-project basis, with each project representing a single
cash generating unit. An impairment review is undertaken when indicators of
impairment arise but typically when one or more of the following circumstances
apply:
• unexpected geological occurrences are identified that render the resource
uneconomic;
• title to the asset is compromised;
• fluctuations in commodity prices render the project uneconomic; or
• lack of available financing to progress the project.
Where the Group enters into exploration option agreements with third parties,
the Group may acquire or dispose of mineral rights and certain benefits
attached to those mineral rights. Since these options are exercisable entirely
at the discretion of the optionee, the amounts payable or receivable are not
recorded. Option payments are recorded as exploration and evaluation assets
when payments are made, or as recoveries when payments are received, either
against exploration and evaluation assets or as income within the income
statement depending on the nature of the option agreement.
The recoverability of the amounts capitalised for the undeveloped exploration
and evaluation assets is dependent upon the determination of economically
recoverable ore reserves, confirmation of the Group's interest in the
underlying mineral claims, the ability to develop its exploration and
evaluation assets, the ability to obtain the necessary financing to complete
their development and future profitable production.
Capitalising of people costs
The relevant portion of employee and contractor costs (including the
share-based payment charge) incurred for service and activity deemed to relate
to the evaluation, technical feasibility and commercial viability of
extracting a mineral resource are capitalised.
Environmental rehabilitation
An obligation to incur restoration, rehabilitation and environmental costs
arises when environmental disturbances are caused by the exploration or
development of exploration and evaluation assets due to statutory,
contractual, constructive, or legal obligations.
At the reporting date, the Group has no environmental rehabilitation
obligations in Laguna Negro Francisco SpA, Laguna Escondida SpA, Laguna Brava
SPA, Atacama Tierras Blancas SpA, or Atacama Salt Lakes SpA; as such, no
provision has been recognised in the Group's financial statements.
The Directors review annually for changes in regulatory requirements with
respect to environmental rehabilitation obligations.
Impairment
At the end of each reporting period, the carrying amounts of the Group's
assets are reviewed to determine whether there is any indication that those
assets are impaired. If any such indication exists, the recoverable amount of
the asset is estimated to determine the extent of the impairment, if any.
The recoverable amount is the higher of fair value less costs to sell and
value in use. Fair value is determined as the amount that would be obtained
from the sale of the asset in an arm's length transaction between
knowledgeable and willing parties. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. If the recoverable amount of an
asset is estimated to be less than its carrying amount, the carrying amount of
the asset is reduced to its recoverable amount and the impairment loss is
recognised in the income statement.
For an asset that does not generate independent cash inflows, the recoverable
amount is determined for the cash generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash generating unit) is increased to the revised estimate of its
recoverable amount, but to an amount that does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the
asset (or cash generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in the income statement.
Financial instruments
Where applicable, the Directors classify the Group's financial assets in the
following categories:
• financial assets at "fair value through income statement"; or
• loans and receivables
The classification depends on the purpose for which the financial assets were
acquired. The classification of the Group's financial assets is determined at
initial recognition and depends on the nature and purpose of the financial
instrument.
Financial assets carried at fair value through income statement are recognised
and recorded initially at fair value and transaction costs are expensed in the
income statement.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
obligations as they become due. The Group's ability to continue as a going
concern is dependent on the Directors' ability to raise the funds required.
The Group has no regular cash inflow from its operating activities.
The Directors manage the Group's liquidity risk by:
• maintaining adequate cash reserves through the use of the Group's cash
received from equity placings a;
• continuously monitoring actual cash flows to ensure the Group maintains an
appropriate amount of liquidity; and
• forecasting cash flow requirements for the Group's planned exploration and
development work programmes and its associated corporate activities. Based on
this analysis, the Directors secure sufficient additional investment to ensure
an appropriate level of liquidity is maintained.
Failure to realise additional funding, as required, could result in the delay
or indefinite postponement of further exploration of the Group's mineral
properties and could result in the Group being unable to meet the continued
listing requirements following admission to the London Stock Exchange.
All the Group's liabilities are on demand or fall due in less than one year.
Foreign currency risk
The Group has its only significant exposure to foreign currency risk through
expenditures incurred on the Chilean entities' exploration and evaluation
assets in Chile, denominated in Chilean Pesos. Cash balances held within the
Group entities are denominated in their respective functional currencies
although US dollar accounts are also held for ad hoc expenditure denominated
occasionally in US dollars; the financial instruments denominated in US
dollars held by the Group are minimal at each reporting year.
A 10% movement in the GBP £ / CLP $ exchange rates would increase/(decrease)
net assets of the Group by the amounts shown below. This analysis assumes that
all other variables, in particular interest rates, remain constant.
At 31 December 2023
Effect on net assets of the Group: £
Strengthened by 10% 15,369
Weakened by 10% (15,369)
At 31 December 2022 £
Effect on net assets of the Group:
Strengthened by 10% 478,845
Weakened by 10% (478,485)
Commodity price risk
Fluctuations on prevailing commodity market prices present a possible risk for
the Group. Such commodity prices could impact the cost of power for
production processes and the market price for battery-grade lithium
carbonate. The pre-production status of the Group means exposure to these
risks has minimal financial impact on the Group. The Group does not use
commodity forward contracts and futures to hedge against price risk in
commodities as they are not yet appropriate for the Group.
Loans and receivables
Other receivables and borrowings that have fixed or determinable payments that
are not quoted in an active market are classified as "loans and receivables".
"Loans and receivables" are recognised initially at the transaction value and
carried subsequently at amortised cost less impairment losses. The impairment
loss of receivables is based on a review of all outstanding amounts at year
end.
The Directors have classified the Group's other receivables and borrowings as
"loans and receivables".
Share based payments
The fair value of share options or warrants granted is charged to the income
statement or capitalised in the statement of financial position, with a
corresponding increase in a share-based payment reserve. The fair value of
share options is measured at grant date, using the Black-Scholes pricing
model, and spread over the period up to the point the vesting condition is
met. Upon exercise, the share-based payment reserve is released to the
accumulated profit or loss. The warrant instruments granted to any
counterparty are measured and recognised in the same way as share options at
the date of issue.
Other financial liabilities
"Other financial liabilities" are measured initially at fair value, net of
transaction costs, and are measured subsequently at amortised cost using the
effective interest method, with interest expense recognised on an effective
yield basis. The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest expenses
over the corresponding period. The effective interest rate is the rate that
exactly discounts estimated future cash payments over the expected life of the
financial liability, or, where appropriate, a shorter period.
The Directors have classified the Group's other payables as "other financial
liabilities".
4. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements confirming with adopted IFRSs requires
the Directors to make judgements, estimates and assumptions that affect the
reported amounts of assets and liabilities, as well as the disclosure of
contingent assets and liabilities as at the reporting date and the reported
amount expenses during the period. Actual outcomes may differ from those
estimates. The key sources of uncertainty in estimates that have a risk of
causing material adjustment to the carrying amounts of assets and liabilities,
within the next financial year, are the impairment of assets and the Group's
going concern assessment, as described in note 2. In addition, judgement is
required to be exercised in determining a functional currency, including
assessing the underlying transactions, events and conditions which are
relevant to an entity.
Impairment
The Directors apply significant judgment in assessing each of the Group's
cash-generating units and assets for the existence of indicators of impairment
at the reporting date. Internal and external factors are considered in
assessing whether indicators of impairment are present that would necessitate
impairment testing. The indicators of impairments and their assessment are set
out in Note 11.
VAT receivables
Included within trade and other receivables is an amount approximately £1.8
million in Chilean VAT recoverable. 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, as disclosed in note 12.
5. ADMINISTRATION EXPENSES
Administration expenses in the year to 31 December 2023 totalled £5.9
million, of which approximately £1.8 million reflects non-cash items. More
specifically, approximately £1.2 million reflects a provision made against
VAT in Chile which CleanTech being able to recover once production starts
(Note 12 provides further detail). In addition to the non-cash VAT
provision, approximately £0.5 million has been recorded as a share-based
payments for share options awarded to staff and contractors (further detail is
set out in Note 14).
Of the £4.2million in cash costs, approximately £1.2 million relates to
staff costs (2022: £1.1 million), £0.7 million relates to promotion, public
and investor relations (2022: £0.3 million), approximately £0.6 million
relates to travel (2022: £0.1 million), £0.8 million relates to legal and
professional support (2022: £1.4 million), and approximately £0.5 million
relates to listing and compliance and insurance costs(2022: £0.2 million),
the balance of £0.4 million comprises a variety of other and general
administrative costs (2022: £0.1 million).
6. STAFF AND DIRECTORS
Audited Audited
Year ended Year ended
31-Dec-23 31-Dec-22
Average number of employees and long-term contractors 22 9
Directors 6 4
Total 28 13
During 2023 the Group's the average number of employees increased as
operational requirements expanded, but notably was essentially unchanged from
where the Group's number of employees (a number which includes longer-term
consultants) was at the end of 2022.
During 2023, the Board also expanded following the appointment of two
Non-Executive Directors; details of those appointments are set out in further
detail in both the Strategic Report and Governance sections of this Annual
Report.
Details of Directors remuneration are set out Directors' Remuneration section
on page 37 in the report.
7. INCOME TAX
The accrued income tax expense continues to be £nil as the Group remains in a
loss-making position.
Income tax expense
Audited Audited
Year ended Year ended
31-Dec-23 31-Dec-22
£ £
Current tax - -
Total current tax expense - -
Reconciliation of the tax expense
The standard rate of corporation tax in Jersey is nil % (2022: nil %) which
differs from the tax rates in foreign jurisdictions as follows: Chile tax rate
of 27% (2022: 27%); and U.K. tax rate of 19% (2022: 19%).
Notwithstanding the Group has cost centres in several tax jurisdiction, for
tax reconciliation purposes, the Directors have decided to use the Chilean
corporate tax rate as most appropriate given the operations and future
production of the Group is located in Chile.
Audited Audited
Year ended Year ended
31-Dec-23 31-Dec-22
£ £
Loss before taxation (5,885,600) (3,800,537)
Tax at the aggregated applicable tax rate of 27% (2022: 27%) 2,561,166 1,720,384
Expenses not deductible for tax purposes (1,331,581) (951,012)
Losses carried forward on which no deferred tax is recognised (1,229,585 ) (769,372)
Total current tax expense - -
Not all losses incurred are allowable for taxation purposes. At 31 December
2023, the Group had £ 3,469,383 of accumulated tax losses (2022: £
2,239,798). An indefinite carry-forward of net operating losses is permitted
under Chilean tax rules. Losses mainly relate to those incurred by the
Chilean entities, which are not expected to be transferrable to UK or JE
jurisdictions.
No deferred tax asset is recognised on these losses due to the uncertainty
over the timing of future profits and gains.
8. 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 options schemes and warrant instruments detailed
in Note 14. 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.
Basic and diluted loss per share Audited Audited
Year ended Year ended
31-Dec-2023 31-Dec-22
£ £
Loss after taxation (5,885,600) (3,800,537)
Basic weighted average number of ordinary shares (millions) 109.74 78.56
Basic loss per share (GBP £) (0.054) (0.048)
9. SEGMENTAL INFORMATION
The Group operates in a single business segment, being the exploration and
evaluation of mineral properties. These activities are undertaken in Chile,
alongside administrative operations in the U.K., Jersey and formerly in
Australia.
31 December 2023 Chile Rest of Total
World
£ £ £
Exploration and evaluation assets 13,710,413 - 13,710,413
Non-current assets 13,710,413 - 13,710,413
Trade and other receivables 484,252 126,646 610,898
Related party and intra-group receivables 94,826 (94,826) -
Cash and cash equivalents 48,609 6,153,419 6,202,028
Current assets 627,687 6,185,239 6,812,926
Trade and other payables (230,439) (121,198) (351,637)
Related party and intra-group payables (14,094,942) 14,094,942 -
Provisions and accruals (166,411) (212,302) (378,713)
Current liabilities (14,491,792) 13,761,442 (730,350)
Net Assets (153,692) 19,946,681 19,792,989
31 December 2022 Chile Rest of Total
World
£ £ £
Exploration and evaluation assets 5,317,412 - 5,317,412
Non-current assets 5,317,412 - 5,317,412
Trade and other receivables 186,273 92,066 278,339
Related party and intra-group receivables 102,985 (102,985) -
Cash and cash equivalents 174,311 12,193,954 12,368,265
Current assets 463,569 12,183,035 12,646,604
Trade and other payables 369,756 70,582 440,338
Related party and intra-group payables 510,767 (510,767) -
Provisions and accruals 115,609 77,799 193,408
Current liabilities 996,132 (362,386) 633,746
Net Assets 4,784,848 12,545,421 17,330,270
10. WIND UP OF AUSTRALIAN ENTITIES
On 25 March 2022 the Australian Entities were wound-up and formally
deregistered. There has been no net change to the overall economic substance
of the Group, nor had there been a change to the ultimate beneficial owners of
the Group arising from the corporate restructurings which ultimately led to
the deregistrations of the Australian entities.
11. 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.
Exploration and evaluation assets Audited Audited
Year ended Year ended
31-Dec-2023 31-Dec-22
£ £
Opening balance 5,317,412 765,115
Additions 9,383,902 4,316,747
Effect of foreign exchange translations (990,901) 235,550
Closing balance 13,710,413 5,317,412
Of the additions, approximately £0.5 million is non-cash in nature, which
reflects the accounting adjustment for share-based payments made to staff and
contractors, about which further detail is set out in Note 14
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 31 December 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. Consequently, the Directors do not consider
there is any indication of impairment.
In 2024, the DLE pilot plant was commissioned, consequently the Directors will
consider whether expenditure relating to the DLE pilot plant should be
reclassified as tangible assets in 2024. However, at 31 December 2023,
expenditure related to DLE had been classified as intangible pending
confirmation as to its technical and commercial feasibility.
12. TRADE AND OTHER RECEIVABLES
Trade and other receivables Audited Audited
As at As at
31-Dec-2023 31-Dec-22
£ £
Prepayments and deposits 570,936 194,712
VAT 13,385 4,988
Other receivables 26,577 78,639
Total 610,898 278,339
Prepayments and deposits largely reflect prepayments with respect to with
capital projects in Chile and 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 £13,000 at 31 December 2023, at
that date approximately £1.8 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 £1.2 million provision has been reflected in the
income statement for the year ended 31 December 2023 (£0.6 million in
2022).
Other receivables comprise multiple smaller working capital balances.
13. SHARE CAPITAL
Share capital
Number of shares £
At 1 January 2022 2 0.02
Share for share exchange CTL Ltd 60,366,573 5,051,201
Cash received for shares held in creditors - 194,917
Fundraise shares issued 44,766,925 17,867,122
Commissions on fundraise shares issued - (1,047,970)
Warrant shares fair value adjustment - (989,115)
Equity settled transactions 200,000 -
At 31 December 2022 105,333,500 21,076,155
At 1 January 2023 105,333,500 21,076,155
Share options exercised 1,100,000 396,000
Fundraise shares issued 38,728,826 8,520,341
Commissions on fundraise shares issued - (607,104)
Warrant shares fair value adjustment - (3,074,767)
At 31 December 2023 145,162,326 26,310,625
In 2022, CTL Plc completed its formal acquisition of the Underlying Group
through a share- for-share agreement with the shareholders of CTL Ltd. In
addition, shares were issued by CTL Plc as a part of the IPO placing, and as a
part of the placing which completed in November 2022. Of the share capital
raised, approximately £1.0 million was offset by fundraising commissions.
In 2023, approximately £0.4 million was raised through the exercise of share
options from a previous employee (see Note 14). In addition, CTL Plc
completed a fundraise of approximately £8.5 million, which included £0.1
million of non-cash settled share based payments, and of which approximately
£0.6 million was offset by fundraising commissions.
14. SHARE BASED PAYMENTS
During the year ended 31 December 2023, share options have been granted to
certain Directors, staff and suppliers.
In addition, during the year, 1,100,000 share options were exercised by a
former employee at an exercise price of 36p per share, giving rise to a
£396,000 cash inflow to the Company.
Year ended Year ended
31-Dec-23 31-Dec-22
# #
Outstanding at start of the year 10,984,745 -
Share options granted 3,283,000 6,670,000
Warrant shares granted 21,876,005 4,314,745
Share options exercised (1,100,000) -
Share options revoked or forfeited (681,000) -
Outstanding at end of the year 34,362,750 10,984,745
All warrants have vested, the outstanding share options have various vesting
conditions, some of which have vested, others which have not.
Audited Audited
Year ended Year ended
31-Dec-23 31-Dec-22
# #
IPO share options vested 2,900,000 2,900,000
Performance related options Milestone 1 (see note below: M1) 1,238,334 1,103,667
Performance related options Milestone 2 (see note below: M2) 1,418,334 1,103,667
Performance related options Milestone 3 (see note below: M3) 1,418,332 1,103,666
Non-Executive Director Options Time (see note below: time) 697,000 595,000
Other contractor options Fully vested nil-cost options 500,000 -
Share options outstanding at end of the year 8,172,000 6,670,000
Notes on vesting conditions
M1 This vesting condition is met when the Board publishing a JORC 'measured and
indicated' resource total of 1m tonnes (or more) of Lithium Carbonate
Equivalent; this condition was met during the 2023
M2 This vesting condition is met when the Board agrees to the publication of a
Pre-Feasibility Study (PFS)
M3 This vesting condition is met when proposed pilot plant testing process has
met its objectives to produce sufficient battery grade lithium carbonate
and/or lithium hydroxide to enable the Company to supply material for offtake
customer testing and to provide process design data for the Definitive
Feasibility Study (DFS)
Time Refers to annual anniversary time vesting points
All options and warrants are granted in the Company's name. Share options
granted have a weighted average exercise price of 47 pence and warrants
granted have a weighted average exercise price of 33 pence.
The accounting standards and CTL's accounting policies provide that the cost
of issuing equity instruments (warrants or share options) is measured at its
fair value. In the case of share options, fair values are charged to the
income statement or the exploration asset, with a corresponding increase in
equity. The fair value of share options is measured at grant date, using a
Black-Scholes pricing model and spread over the period during which the
employee becomes unconditionally entitled to the award (the vesting period).
The charge is adjusted to reflect the expected number of shares or options
that vest. The fair value of each option granted in the period was estimated
using the Black Scholes option pricing model with the following assumptions:
Share Options
Fair value of call option per share £0.12 - 0.38
Share price at grant dates £0.39 - 0.55
Exercise price £0.01 - 0.57
Expected volatility 116%
Vesting period 4.7-5.0 years from vesting
Risk-free interest rate (based on government bonds) 4.16%
The fair value of warrants is also measured at grant date, using a Monte Carlo
simulation where vesting dates depend on performance related criteria, or
using the Black-Scholes pricing model where more appropriate. As with the
treatment of share options, the fair value is spread over the period during
which the warrant holder has entitlement to the award. The charge is adjusted
to reflect the number of warrants that vest. In the case of warrants, fair
values are charged to an equity reserve.
The total share option fair value charge for year ended 31 December 2023 is
£1,060,152 (£588,713 in 2022), of which approximately £528,000 has been
recorded in the income statement as a non-cash employee expense; the balance
has been recorded within E&E. The total warrant fair value charge for
year ended 31 December 2023 is approximately £3,074,000 (2022: £989,114).
All of the warrants granted during the year vested on or shortly after the
grant date. The warrants which were awarded to subscribers of the
two-tranche placing and open offer which was approved by shareholders and
completed on 14 December 2023 have a vesting date of 14 December 2024 and
expire on the second annual anniversary. Broker warrants issued as a part of
the two-tranche placing during the period had a vesting date of 15 December
2024 and expire on 15 December 2028.
As noted, these fair value estimates are non-cash accounting entries.
15. CONTINGENT LIABILITIES
Laguna Verde Option Agreement
At 31 December 2023, the Group held 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 USD $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.
Subsequent to the year end, the Company announced the buy-out of the LV option
agreement. This buy-out formalises CleanTech's legal ownership of the mining
concessions of interest in the Laguna Verde asset, details of which are set
out in Note 21.;
16. PAYABLES, PROVISIONS AND ACCRUALS
Year ended 31-Dec-23 Year ended
31-Dec-22
£ £
Trade and other payable (291,369) (321,476)
Provisions (106,451) (86,007)
Other taxes and social security (59,027) (118,862)
Accruals (272,262) (107,401)
Total (730,350) (633,746)
Trade and other payables include routine trade creditors.
The provisions balance largely reflects the provision for taxes associated on
the expenses classified as Director fees for Mr Boitano. Prior to 2021, Mr.
Boitano provided ad hoc financing support to the Group to fund working capital
and exploration and evaluation expenditure. Related party transactions
involving Mr. Boitano comprised settlements of liabilities on behalf of the
Group or on behalf of Mr. Boitano and transfers by Mr. Boitano to or from the
Group under informal finance arrangements. No such funding arrangements were
made between the Group and Mr. Boitano after 2020. In historical periods, net
amounts owing to the Group were waived and expensed to the Income Statement
and totalled approximately £33,000 in 2020. These amounts were classified as
Director fees and a provision for taxes relating to same was made. Any amounts
advanced by or to Mr. Boitano were deemed repayable on demand and did not
carry an interest rate.
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.
17. OTHER RESERVES
Foreign exchange reserve
The foreign exchange reserve represents the differences arising on the
translation of transactions from the functional currencies.
Accumulated losses
The accumulated losses represent the consolidated losses of the Group.
Movements during the year represent the consolidated comprehensive loss for
that year.
18. CAPITAL MANAGEMENT
The capital of the Group consists of the items included within "equity" on the
Statement of Financial Position. The Directors manage the Group's capital
structure based on the nature and availability of funding and the timing of
expected or committed expenditures. The Directors' capital management policy
is to maintain sufficient capital to support the acquisition, exploration and
future development of the Group's exploration and evaluation assets and to
provide sufficient funds for the Group's corporate activities.
The Group's exploration and evaluation assets are in the exploration phase of
development, consequently, the Group is unable to finance its operations
through production revenues. The Group has relied historically on equity
financings and on debt funding, or a combination thereof, to finance its
activities. The Directors project the Group's future capital requirements by
planning the exploration and future development activities to be undertaken on
its exploration and evaluation assets and assessing the level of corporate
activities that are necessary to support the growth and development of the
Group. The Group is not subject to any capital requirements imposed
externally.
19. RELATED PARTY TRANSACTIONS
At the year end, Company had one receivable owing from one of the directors
totalling approximately GBP £18,000 which has been fully repaid in January
2024. There were no related party transactions during the year other than
transactions with Directors as disclosed in the Directors remuneration section
of the report on page 30. In addition, during the year, one month's fees for
one of the directors was settled in shares. In 2022, the Company procured
professional photographs of the Board for publication purposes from a related
party of one of the Directors. The transaction had a value of £750 and was
paid in full in 2022.
20. SUBSIDIARY UNDERTAKINGS
At 31 December 2023, CleanTech Lithium Plc has the following subsidiary
undertakings, all of which are wholly owned, directly or indirectly:
Name of company Country of incorporation Ownership
CleanTech Lithium Ltd England & Wales Wholly owned by CleanTech Lithium Plc
CLS Chile SpA Chile Wholly owned by CleanTech Lithium Ltd
Laguna Negro Francisco SpA Chile Wholly owned by CleanTech Lithium Ltd
Atacama Salt Lakes SpA Chile Wholly owned by CleanTech Lithium Ltd
Laguna Escondida SpA Chile Wholly owned by CleanTech Lithium Ltd
Atacama Tierras Blancas SpA Chile Wholly owned by CleanTech Lithium Ltd
Laguna Brava SpA Chile Wholly owned by CleanTech Lithium Ltd
Llamara SpA Chile Wholly owned by CleanTech Lithium Ltd
CleanTech Lithium Ltd acts as holding company (for the Chilean entities) and
management service provider to the Group. CLS Chile SpA primarily acts as
service provider to the other Chilean entities, which are themselves are asset
and mining licence companies.
The financial information presented by the Group in this report also contains
information relating to the two Australian entities, noting these were
wound-up and formally deregistered on 25 March 2022. There been a change to
the ultimate beneficial owners of the Group arising from the corporate
restructurings and subsequent deregistrations of the Australian entities.
Name of company Country of incorporation Ownership
Chilean Lithium Salars Holdings Limited Australia Wholly owned by CleanTech Lithium Ltd
Chilean Lithium Salars Pty Limited Australia Wholly owned by CleanTech Lithium Ltd
21. SUBSEQUENT EVENTS
Matters relating to events occurring since Period end are reported in the
section entitled Chairman Statement and set out below:
On 12 April 2024, the Company announced it had accepted the resignation of
Aldo Boitano as CEO and director of the Company with immediate effect. This
announcement followed his suspension after he failed to disclose entered into
a loan agreement with a financial institution, under which he agreed to
provide security over ordinary shares which he had held in his name. Steve
Kesler will continue as CEO on an interim basis to ensure no impact on the
Company's ongoing activities. To ensure continuity, Steve Kesler, as
Executive Chairman has been working closely with Mr Boitano and is well placed
to ensure ongoing continuity and progress.
On 22 April 2024 the Company announced it had completed the planned
acquisition of the 23 Laguna Verde licences previously subject to an option
agreement resulting in the Company securing full ownership, as well as
control, of the full 108 mining licences comprising the Laguna Verde
project.
Also on 22 April 2024, the Company announced it issued convertible loan notes
to raise gross proceeds of £1 million for the Company on what the Directors
believe are advantageous terms.
On 8 May 2024 the Company announced that, as far as it can determine, Mr
Boitano has ceased to hold a beneficial interest in shares in the Company.
On 14 May 2024 the Company announced that the DLE pilot plant had produced
high quality eluate with low impurities. DLE primarily acts as a purification
stage, recovering lithium chloride from the brine whilst rejecting other
impurities. The pilot plant in Copiapó has demonstrated that it can operate
at the designed capacity of concentrated eluate production sufficient for
conversion to 1 tonne per month of battery grade lithium carbonate. This
places CleanTech Lithium at the forefront of exploration companies in Chile
and the wider sector, in its ability to make available large samples of
lithium carbonate product to potential strategic and offtake partners seeking
to start product qualification.
-ENDS-
Glossary
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
SBP Share based payments
SPA Sale & Purchase Agreement
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