REG - CleanTech Lithium - Francisco Basin Scoping Study
26/09/2023 07:00
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RNS Number : 5953N CleanTech Lithium PLC 26 September 2023
26 September 2023
CleanTech Lithium PLC ("CleanTech Lithium" or the "Company")
Scoping Study Confirms Potential Viability of Francisco Basin as
CleanTech Lithium's Second Major Project in Chile
CleanTech Lithium PLC, (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF), an exploration
and development company, advancing sustainable lithium projects in Chile for
the clean energy transition, announces the results of a recently completed
Scoping Study for the Francisco Basin Project, which confirms the project's
outstanding economics, potential for future resource expansion and strong ESG
credentials.
Highlights:
· Supports the potential for Francisco Basin to become a major supplier
of battery grade lithium to European and US markets based on sustainable
direct lithium extraction ("DLE") technology
Scoping Study Highlights:
· Based on annual production of 20,000 tonnes of battery grade lithium
carbonate for a production period of 12 years based largely on Indicated
resources
· Calculates accumulated net cashflows (post-tax and royalties) of
US$2.5 billion to be generated over the production period with low operating
cost of US$3,641 per tonne of lithium carbonate
· Estimated capital expenditure of US$450.0m, based on DLE plant using
Sunresin Materials existing DLE technology, including 20% contingency
· Attractive economics with post-tax NPV of US$1.1 billion using a
discount rate of 8%, post-tax IRR of 43.5% and a payback period of 2 years and
7 months - based on a long-term lithium carbonate price of US$22,500 per tonne
from 2028 (Note: see below for sensitivity analysis including the NPV at a 10%
discount rate)
· The study assumes production commences in 2027 as the Company aims to
progress project development stages with a one-year lag to the more advanced
Laguna Verde project, where production is targeted for 2026
· Industry leading ESG credentials, a critical advantage for the EU
market, based on utilising DLE which returns spent brine to the basin
aquifers, and renewable energy for processing power by connecting with the
Chilean grid and its abundant renewable energy supply
· The Company plans to undertake another resource drill programme at
Francisco Basin, commencing Q4 2023, aiming to further upgrade the current
resource estimate, which is 0.92 million tonnes of lithium carbonate
equivalent (LCE) at a grade of 207mg/L Lithium
· This could extend the 12-year production period and would enhance
projected economic returns
· A Pre-Feasibility Study ("PFS") on the project is planned to commence
on the completion of the resource drill programme, which is expected to be in
2H 2024
Commenting, Aldo Boitano, Chief Executive Officer, of CleanTech Lithium PLC,
said:
"The Scoping Study provides added confidence in the robust economics of our
second project, Francisco Basin, based on low operating and capital costs,
with a post-tax NPV of US$1.1 billion and IRR of 43.5%, and a payback period
of 2 years and 7 months. The study further advances the process and technical
design concept for the project, with strong ESG principles incorporated at
each stage.
"The next step at the project is to complete further resource drilling with
the aim to expand and upgrade the current JORC resource estimate of 0.92
million tonnes LCE; an increase in the resource provides the potential to
extend the production period of 12 years assumed in the study. DLE test-work
on Francisco Basin brine is ongoing and important technical data will be
generated when trials start at our pilot plant, which is currently being
assembled at our facility in Copiapó. The Company plans to proceed to a
Pre-Feasibility Study (PFS) for the project on completion of the planned
resource drill programme, which is expected to be in 2H 2024.
"Francisco Basin is our second project which is being developed on a schedule
one year behind our more advanced Laguna Verde project. Combining the two
scoping studies means we have a total NPV of nearly $3 billion and an IRR of
more than 43% for each project.
"This Scoping Study marks a major milestone for the Company and I would like
to take this opportunity to thank the Scoping Study consultant, Chilean based
lithium sector experts Ad-Infinitum, as well as our technical team for their
hard work in completing the study. The Scoping Study outlines a plan to
produce battery-grade lithium with a low environmental footprint, which
positions the Company extremely well to supply the EU and US markets."
Further Information
Summary of Key Scoping Study Outcomes
A summary of the outcomes for key operational and economic analysis metrics
derived from the completion of the scoping study are presented in the table
below.
Key Operating Metrics Unit Study Outcome
Production Rate of Lithium Carbonate Tonnes per annum 20,000
Operational Life Years 12
Resource Utilised (Indicated & Inferred) - Total Thousand tonnes 236.0
Resource Utilised (Indicated) - 68% Thousand tonnes 160.5
Resource Utilised (Inferred) - 32% Thousand tonnes 75.5
Construction Period Years 1.5
Recovery rate - Direct Lithium Extraction % 94.8
Recovery rate - Concentration stages & chemical plant % 90.0
Recovery rate - Total % 89.3
Key Financial Metrics
Capital Cost (including 20% contingency) US$ Million 450.0
Operating Cost US$ / tonne Li2CO3 3,641
Lithium Price (Lithium Carbonate)) $US/tonne Forecast Curve
Accumulated Net Cashflows Over Operational Life US$ Billion 2.5
Payback Period Years 2 years 7 months
IRR Post-Tax % 43.5
NPV Post-Tax (Discount Rate = 8%) US$ Billion 1.09
NPV Post-Tax (Discount Rate = 10%) - Sensitivity Analysis US$ Billion 0.89
Information on Study and Contributors
The study was undertaken by Ad-Infinitum, a Chilean engineering services
company/technical consultant with over 30 years of experience in the lithium
sector with clients including SQM, Albemarle and Galan Lithium. Ad-Infinitum
specialise in processes and operations involving the processing of brines and
minerals that contain Lithium, Potassium, Sulfate, Nitrates and other
elements; and provide specialist technical solutions that contribute to the
development of projects in all their stages, as well as the improvement of
operations. Since 2014, Ad-Infinitum has worked on lithium production
processes from brine on different projects in Chile, Argentina, China, Korea
and elsewhere.
The capital cost estimates for the DLE plant were contributed by Sunresin, the
leader in commercial scale DLE plants. The lithium price cost curve estimate
used in the study is based on estimates by Canaccord Genuity, a market leading
broker with considerable experience in the lithium sector. The key study
contributors are further summarised in the table below.
The Mineral Resource scheduled for extraction in the scoping study production
plan is based on the Francisco Basin updated JORC resource estimate reported
by the Company in August 2023. For the 12 year production plan, approximately
68% of the volume is attributed to resources classified as Indicated and 32%
of the volume is attributed to resources classified as Inferred. The
resource estimate was prepared by an Independent Competent Person, Christian
Feddersen, in accordance with the requirements of the JORC Code.
Scope Contributor
Study Manager Ad Infinitum
Direct Lithium Extraction Plant Sunresin
Metallurgical Test-Work Ad Infinitum
Mineral Resource Estimation Christian Feddersen
Geological Consultant Geomin
Land Title Juan Bedmar e Hijo Ltda
Environmental, Social and Community Impact Minería y Medio Ambiente Ltda (MYMA)
Lithium Price Forecast Canaccord Genuity estimates, May 2023
Scoping Study Summary
Project Description and Geology
The Francisco Basin project is located in the northern Atacama Region of Chile
at an altitude of 4,150m above sea level. The project is located 200km east
of the capital city of the region, Copiapó, where the mining sector is the
main driver of the economy which allows access to mining services and
specialised infrastructure. The port of Caldera, 270 km away by road, is a
point of entry for supplies and an outlet for products with excellent loading
facilities for general cargo and specialty commodities. The project is
accessed by a network of paved and unpaved roads from Copiapó. Figure 1
provides a regional map, which additionally shows that Francisco Basin is
approximately 100km from CleanTech Lithium´s most advanced project, Laguna
Verde.
Figure 1: Regional Map of Francisco Basin Showing Distance From Key Centres
and Laguna Verde Project
Francisco Basin is classified as an immature clastic salar characterised by
greater moisture regimes and a sediment profile with higher porosities than
mature halite salars. The Francisco Basin is an elongated basin aligned on a
NW-SE axis bounded on all sides by volcanic mountain ranges. The surface of
the salar is at an elevation of approximately 4,136m. To the south-east the
basin forms a gently rising plain which forms the focus area of the project.
The basin fill is characterised by sedimentary deposits that can be separated
into three general units:
1. An upper unit of fine to coarse sands intercalated with fine gravels,
minor clay and tuff levels
2. A middle unit of clay beds intercalated with minor levels of fine
sands and gypsum
3. A basal unit of moderately consolidated gravels and sands,
transitioning to silt beds
The brine aquifer is contained mainly from the middle unit down to the
basement, with the general basin stratigraphy interpretation presented in
Figure 2 below.
Figure 2: Francisco Basin General Stratigraphy
Mineral Property and Title
Under Chilean law, exploration and exploitation of mineral resources are
granted through mining concessions. CleanTech Lithium, via its 100% owned
subsidiary Laguna Negro Francisco SpA, owns a total of 47 exploitation and
exploration mining concessions at the Francisco Basin Project with a total
area of 127km(2). The map of the concession outline is shown in Figure 3.
Under Chilean law, the exploration and exploitation of lithium can be executed
by a Special Operation Contract for Lithium (CEOL), under the terms and
conditions established by the President of the Republic. On 6 September 2023,
the Company submitted CEOL applications to the Chilean authorities which are
now subject to a formal review process which is expected to take 3-6 months.
The outline of the area of the CEOL applications is shown in Figure 3.
Figure 3: Tenement map of Francisco Basin Project Mining Concessions
Mineral Resource Estimate
An updated JORC compliant resource estimate for the Francisco Basin project of
919,346 tonnes of LCE was published on 24 August 2023. This estimate was based
on resource drill programmes undertaken in the first halves of 2022 and 2023.
In addition to a single resource well completed in 2022 (designated FB01), a
further five wells (FB02 - FB06) were completed during the 2023 programme,
with recorded drilling depths and coordinates as per Table 1 below.
Table 1: Francisco Basin Resource Drilling Details
The resource estimate is classified in the categories of Indicated and
Inferred. Of the total resource 443,215 tonnes are classified in the Indicated
category and 476,130 is classified in the Inferred category, as shown in Table
2 below. For the 12-year production plan outlined in the scoping study, 68% of
the volume is assumed from Indicated resources and 32% from Inferred, which
roughly corresponds to the final four years of the production profile.
Total Indicated Resources
Total Volume m(3) 3,376,080,000
Specific Yield % 11.2%
Brine Volume m(3) 377,547,013
Average Li Grade mg/l 220.5
Li Mass tonne 83,264
Indicated Resource (Lithium Carbonate Equivalent) tonne 443,215
Total Inferred Resources
Total Volume m(3) 3,313,680,000
Specific Yield % 13.8%
Brine Volume m(3) 458,182,522
Average Li Grade mg/l 195.2
Li Mass tonne 89,448
Inferred Resource (Lithium Carbonate Equivalent) tonne 476,130
Total Indicated + Inferred Resources
Total Brine Volume m(3) 835,729,536
Average Li Grade mg/l 206.6
Li Mass tonne 172,712
Indicated + Inferred Resource (Lithium Carbonate Equivalent) tonne 919,346
Table 2: Francisco Basin JORC Resource Estimate
Mining Method
Lithium enriched brine occurring within the porous sub-surface sediments is to
be extracted utilising a well field. A total of twenty-three extractions
wells have been considered in the study, with the area of the well field shown
in red in Figure 3. The extracted brine will be transferred to a tank to be
mixed prior to being fed into the first stage of plant processing, which is
the DLE adsorption columns. The spent brine from the adsorption process, which
is the brine with lithium removed, will be reinjected into the salar basin
through deep wells, in areas where the mineral resource will not be affected
by dilution. The area considered in the Scoping Study for reinjection wells is
shown in Figure 4. Further hydrogeological work is required to develop the
extraction and reinjection model for the production phase of the project.
Figure 4: Scoping Study Wellfield Infrastructure Layout Plan
Power Supply
Francisco Basin project will use renewable energy for power supply through
contracting a supplier of renewable energy via a Power Purchase Agreement
(PPA). The study notes that as of December 2022, 62% of the installed capacity
in Chile is renewable energy, such as hydropower, solar-thermal, geothermal,
wind, and photovoltaic solar, making such a PPA feasible. A feature of the
project is the proximity to the Maricunga Substation, 10km south-west of the
project area as shown in Figure 4, which is supplied via a 110 KV transmission
line. This is expected to significantly facilitate the cost of providing
energy supply to the project.
Process Method
Brine processing test design work has progressed emphasising the minimisation
of environmental impact, waste disposal and water consumption to ensure high
ESG standards for the project. The process considers the use of DLE to
selectively extract lithium-ions from the brine before standard concentration,
impurity removal and finally carbonation stages. DLE is primarily a cleaning
stage and subsequent concentration stages are used to increase the lithium
concentration to about 1% Li. The process design, based on test work
completed and simulation, can be described broadly in six stages to produce
lithium carbonate as listed below, and shown in Figure 5 which provides an
overview diagram of the process stages. As process work is further advanced
the option of producing lithium hydroxide, either via conversion of lithium
carbonate or an alternative process route will be further evaluated.
1. Direct Lithium Extraction (DLE)
2. Concentration of the solution
3. Purification of the solution
4. Carbonation and Production of Li2CO3
5. Treatment of the Mother Liquor
6. Water Recovery
Figure 5: Process Stages
Process Recovery
Lithium recovery is the key factor to determine the efficiency and
effectiveness of the process. The overall recovery rate used in the study of
89.3% is based on the DLE stage achieving a 94.8% recovery. Treatment of the
mother liquor after carbonation to precipitate NaCI and then recirculation of
the concentrated solution to the first purification stage allows for the
maximisation of process water recovery and overall lithium recovery. Based on
the modelling, the stages with the lowest recovery are the direct extraction
and lithium carbonation processes. These process stages will be optimised in
the piloting stage. The modelled lithium recovery according to the process
stage is shown in Table 3 below.
Flow (ton/hr) Li % LCE recovered (tonne/hr) LCE recovered (tonne/yr) Li Recovery
From wells 2,549 0.021 2.81 22,186 100.0%
DLE 509.5 0.098 2.67 21,036 94.8%
Membranes NF/RO 124.9 0.393 2.62 20,617 98.0%
Concentration FO 40.6 1.21 2.62 20,617 100.0%
Purification 40.6 1.21 2.62 20,617 100.0%
Carbonation 2.5 18.80 2.54 20,000 90.0%
Mother Liquor recovery 5.4 1.18 0.34 2,682 12.0%
Overall Recovery 89.3%
Table 3: Overall Process Recovery
Summary Mass Balance
The streams that represent the incoming and outgoing material flows in the
system are quantified in the summary mass balance below.
Stream Mass (tonne/yr)
Inlet Well brine 20,092,840
Na(2)CO(3) Purification 423
NaOH Purification 580
IX Boron Reagents 0
IX Ca-Mg Reagent 14
Na2CO3 Carbonation 34,177
HCl mother liquor recovery 3,840
CaCl(2) mother liquor recovery 829
Water use (recycled & re-injected) 880,146
Total Inlet 21,012,850
Outlet Spent brine 20,051,869
NF reject 781,744
Purification (Mg (OH)(2)) solid waste 1,243
Wash water 96,041
IX-Boron, Ca-Mg wastes 50
Li2CO3 Production 20,000
H2O moisture 8,565
Mother liquor recovery. Solid waste (NaCl) 53,336
Total Outlet 21,012,850
Table 4: Summary Mass Balance for 20,000 tpa LCE production rate
Wash water refers to water used for washing in the process with elements such
as Boron, Calcium and Magnesium, that cannot be recycled. As these are
extracted from the brine this wash water will be combined in the reinjection
brine. The largest waste product stream is NaCl from mother liquor recovery.
This will also be combined with spent brine and reinjected without changing
the original brine chemistry.
Reagent Requirements
Table 5 shows the volume of reagents required to produce lithium carbonate
based on the modelled process with the annual consumption rates based on
elemental consumption and adjusted for real volumes of commercial product.
Pure Reagent Total Commercial Reagent Commercial name Purity Adjusted total tonne
tonne
Na(2)CO(3) 34,600 Na(2)CO(3) Soda ash 99.2% 34,879
NaOH 580 NaOH Caustic soda (granular) 99.0% 586
HCl 3,840 HCl al 32% Muriatic acid 32.0% 12,000
CaCl(2) 560 CaCl(2)*2H(2)O (99%) Calcium chloride di-hydrate 74.0% 757
Table 5: Annual consumption of Reagents
Basin Water Balance
The process to produce the planned 20,000 tpa of battery grade lithium
requires water for desorption (or elution) in the DLE process, preparation of
reagents, washing and other process steps. The total volume required is
880,200m(3) or 28 l/s. This is planned to be provided by a fresh water
extraction well located in a peripheral area of the basin, where numerous
fresh water extraction wells have previously been drilled. This volume of
process water, labelled ´Water make-up´ in Figure 6, is part of the
reinjection volume and does not therefore represent water loss.
Figure 6: Basin Water Balance
The observed difference in the extraction and reinjection flows corresponds to
the water loss in the process, for which a break down is summarised in Table
6. This is based on a loss factor from Nano filtration reject and liquid
waste which are not suitable for reinjection, along with moisture loss in the
final product and in the NaCl waste stream produced by recovery of mother
liquor. This represents a water loss of 31,926 m(3)/year, which corresponds to
1.6m(3) of water loss per tonne of final product.
As a comparison, water loss from evaporation pond based operations in Chile is
estimated to exceed 100m(3) per tonne of final product, representing the water
lost to the atmosphere in the process of evaporation. In a DLE based operation
this water loss is vastly reduced, avoiding the environmental impact of basin
aquifer depletion.
Table 6: Water loss breakdown
Process Work Next Stage - Pilot Plant and Lithium Hydroxide Evaluation
For the development of more advanced engineering studies, the study recommends
the operation of a pilot plant to validate and adjust, if necessary, the
process design. The Company has commenced assembly of a pilot plant with the
capacity to produce 1 tonne per month of battery-grade lithium carbonate. The
pilot plant has a feed brine inlet of 4.5m(3) per hour which will be processed
by the DLE unit to produce a lithium eluate. For the concentration of the
eluate, Nano Filtration, Reverse Osmosis and Forward Osmosis is being
considered, with the aim of obtaining a lithium chloride solution with a
concentration of 1.2% lithium, before the final removal of contaminants and
carbonation stages. The Company has a 1,000m(2) facility near Copiapó where
the pilot plant DLE unit is currently being assembled for commissioning and
commencement of operation before the end of 2023.
Fig. 7: Pilot plant DLE columns installed Copiapó (Aug 2023) Fig. 8: Rotary
valve final tests Belgium (Aug 2023)
Based on long-term industry trends, lithium hydroxide is expected to
experience higher demand growth than lithium carbonate. Lithium hydroxide can
be conventionally obtained by converting the lithium carbonate produced in the
first stage of the process with lime. This will be tested in test-work and
potentially at the pilot plant scale. Several other processes to produce
lithium hydroxide from brines are in development that will also be considered.
Capital Expenditure
Capital expenditure (CAPEX) estimates are based on an annual production of
20,000 tonnes of lithium carbonate. The cost of the equipment has been
obtained by Ad-Infinitum from a combination of data from similar projects and
information from supplier quotes. A summary of the CAPEX by major areas is
provided in Table 7. This estimate was made based on figures for the fourth
quarter of 2022 with a 10% inflation adjustment applied for some lines. The
estimated accuracy is within a range of -15%/+30%. Maintenance CAPEX is
estimated at a total of US$ 21.5 million over the 12-year evaluation period.
Area Description US$ 000
1000 Well Field 64,032
3000 Lithium Carbonate Plant 238,939
3100-3300 DLE and Reverse Osmosis (incl. Resin) 199,018
3300-3800 Chemical Plant 35,070
3900 Packaging, Storage and Handling 4,851
4000 Services 23,800
Total Direct Cost 326,771
Indirect Cost 48,198
Contingencies (20%) 74,994
Total CAPEX 449,964
Table 7: Capital Expenditure Summary Breakdown
The Well Field CAPEX item includes brine extraction wells, spent brine
reinjection wells, and water extraction wells as shown in Table 8 below.
Twenty-three brine extraction wells have been assumed at an average depth of
350 metres with each well estimated at an average flow rate of 30 L/s.
Sixteen spent brine reinjection wells were assumed with spent brine discharged
in two reinjection fields, requiring two main pumps. Two wells have been
assumed for process water supply, with their respective pumps and pipes
transporting the water to the lithium carbonate plant area.
Area Description US$ 000
1100 Brine extraction wells 51,768
1200 Brine reinjection well 10,027
1300 Water wells 2,238
Total Wells 64,032
Table 8: Well Field Capital Expenditure Breakdown
The Plant CAPEX estimate is made up of the DLE plant, based on a quotation
received from Sunresin, and a Reverse Osmosis and Chemical plant, based on
data from suppliers and developers of the required equipment calculated using
Ad-Infinitum's database. Table 9 shows a further breakdown of the DLE and
Reverse Osmosis estimates.
Area Description US$ 000
3100 DLE 115,673
3200 Reverse Osmosis 83,345
Total 199,018
Table 9: Plant Capital Expenditure Breakdown
The Services CAPEX estimate of US$23.8 million includes all the satellite
activities that are essential for the operation of the wells and the lithium
carbonate plant: electricity supply, boilers, preparation of reagents, water
treatment, and fire-fighting system, among others.
The Indirect Costs estimate of US$48.2 million includes all other expenses
incurred during the construction period. The Construction and Operation
Camp, and Polyclinic, are the major expense, followed by the Vendor´s
technical assistance.
Finally, a 20% Contingency was applied to all CAPEX items by Ad-Infinitum in
accordance with industry practice.
Operating Expenditure
Estimates are based on the design of the production process, considering
yields and estimated recoveries, and the estimated consumption and prices for
the main reagents used. The estimates of expenses, prices and labour are based
on Ad-Infinitum's database for the costs of similar operations in Chile.
Operating expenses are summarised in Table 10.
Operating Expenditure US$/tonne LCE Annual Total US$ mn
Reagents 1,065 21,298
Water 196 3,927
Energy 1,135 22,707
Manpower 293 5,855
Transport 201 4,012
Catering & Camp Services 148 2,954
Maintenance 369 7,388
Total Direct Costs 3,406 68,134
SGA 234 4,685
Total OPEX 3,641 72,826
Table 10: Operating Expenditure Summary Breakdown
Energy and Reagents are the two largest items representing 32% and 30% of
total operating costs. The unit cost for energy is US$0.1437/kWh consistent
with the pricing of similar supply contracts in the Chilean market. The
Reagent cost is dominated by Soda Ash used in the Carbonation process, which
comprises 67% of the total cost for reagents.
Manpower costs include an estimated total operational manpower of 163 people
with an additional 59 people providing G&A services - totalling 222
personnel supporting the operation of the project.
Transportation assumes land transportation of the product packed in 1-tonne
capacity bulk bags by ramp truck from the plant in Francisco Basin, via
Copiapó, to the port at Caldera from where it is shipped in containers to its
destination in the EU and/or the USA.
Cash flow and Economic analysis
The economic analysis carried out in the study included the following basic
assumptions:
CAPEX Schedule 2025 - US$315.0 million
2026 - US$112.5 million
2027 - US$22.5 million
Total - US$450.0 million
Production Schedule Annual production of 20,000 tonnes per annum
Production ramp-up projected at 40% in Year 1 with full capacity being
achieved in Year 2.
65% of initial production will be battery grade, reaching 100% in Year 2
Grade
Lithium Carbonate Sales Prices Annual Prices 2027 - US$40,000 per tonne
2028 - US$22,500 per tonne
Long-term - US$22,500 per tonne
Opex Cost per tonne US$3,641
Financing Project Funding Analysis assumes entire project funded by the Company from its own capital
Taxes & Royalties Corporate Tax First Category Tax as currently defined in the Chilean tax regime for mining
industries - 27% on net profits (after royalties)
Specific payments to the Chile State - Based on the Companies CEOL
Royalties (CEOL) applications made in early 2022:
§ Specific quarterly payment - 3% of revenues
§ R&D expenses - 1.5% of revenues
Withholding Tax § Community Development Fund - 1.5% of revenues
§ Annual Operating Margin Payment - a progressive table which increases
from 7% to a maximum rate of 16% when the operating margin reaches 85%. This
is the same table as included on page 47 of the Company's Admission Document
for its IPO on the London Stock Exchange in March 2022 and which has been
included in the CEOL application recently announced for Francisco Basin.
With foreign companies or investors, the additional tax that companies must
pay when distributing their profits and dividends overseas is 35%, in which
case, the First Category Tax operates as a credit. In the study, the tax
rate of 27% is used as the applicable rate on a project economics basis. Study
also assumes CleanTech Lithium will establish tax arrangements in Chile and
elsewhere to manage the additional 8% net withholding tax which may be payable
in the event that dividends are distributed outside Chile.
Table 11: Key Assumptions in Economic Analysis of Francisco Basin project
Cashflows Analysis
The Scoping Study confirms, based on the assumptions, very strong cashflows
from operations from an early stage as shown in Table 12 below.
Table 12: Cashflow Forecast Summary
Economic Evaluation Results:
Base Case: Based on the post-tax cashflows shown in Table 12 above, the
following economic evaluation results were obtained:
Post-tax NPV(8) US$ 1.087 billion
Post-tax NPV(10) US$0.895 billion
IRR 43.5%
Payback period 2 years and 7 months
Table 13: Economic Evaluation Results after taxes
Sensitivity Analysis
A sensitivity analysis was undertaken for the three parameters with the
greatest impact on the calculation of the Present Value of the project and the
Internal Rate of Return. This analysis was carried out for variations of -25%
and 25% regarding the Base Case, with the results being shown in Table 14
below. These sensitivities show the robust economics of the project, even in
downside scenarios.
NPV After taxes, US$ million NPV, Var %
Variable 75% 100% 125% 75% 100% 125%
CAPEX MM$ 1,155 1,087 1,018 106% 100% 94%
OPEX M$/tonne 1,144 1,087 1,028 105% 100% 95%
Price M$/tonne 684 1,087 1,485 63% 100% 137%
IRR After taxes, % IRR, Var %
Variable 75% 100% 125% 75% 100% 125%
CAPEX MM$ 54.8% 43.5% 36.1% 126% 100% 83%
OPEX M$/tonne 45.0% 43.5% 42.0% 103% 100% 97%
Price M$/tonne 32.4% 43.5% 53.4% 75% 100% 123%
Table 14: NPV and IRR sensitivities over Capex, Opex and Sales Price
It is observed for both analyses that the "Price" variable is the one that has
the greatest impact on the calculation of the Present Value of the project
flows, as well as on the calculation of the Internal Rate of Return, followed
by Capex in the case of IRR.
Project Funding
It is recognised in the Scoping Study that to achieve the range of outcomes
indicated, it is estimated that pre-production funding of approximately
US$400-450 million before working capital will likely be required. The Report
states that given the very high worldwide demand for lithium for electric car
batteries, with significant demand growth forecast for the next 10 years, it
is anticipated by the Company that the finance will be sourced through a
combination of the following:
· Equity and debt instruments from strategic partners or offtake
partners and their associated banks
· Through access to funds that are available from the USA, European
Union and other countries to support the expansion of green lithium supply
· From ESG specialist funds and/or infrastructure funds, targeted at
sustainable lithium production practices which pass ESG criteria/hurdles
· From new or existing equity investors and debt providers from the UK,
USA, Australia and elsewhere, and/or
· From various other sources, linked to the above.
CleanTech Lithium plc has formed the view that there is a reasonable basis to
believe that requisite funding for development of the Francisco Basin Project
would be available when required, having considered factors including the
following:
• The quality of the Francisco Basin Project, in terms of the grade
of the deposit and relatively low level of projected pre-production capital
expenditure. The release of the Scoping Study will provide a potential
platform for CleanTech Lithium to commence discussions with potential
strategic or offtake partners and financiers, although the Company may wait
until a pre-feasibility study has been completed on this Project before
entering into substantive discussions.
• Global debt and equity finance availability for lithium extraction
projects like the Francisco Basin Project is expected to remain robust,
particularly given the long-term price forecasts for lithium.
• The project is in Chile, which holds the largest reserves of
lithium in the world (source: United States Geological Survey, McKinsey
& Company article, 25 May 2022) and is a well-respected international
mining jurisdiction.
• The Company has no existing debt.
Environmental and Social Licence Considerations
The project does not fall within a designated environmental protection area,
with fauna being scarce due to the high aridity and extreme climate at the
altitude of 4,150m. The study confirms that the Company is currently
developing an environmental baseline study, as well as compiling information
for the environmental impact assessment (EIS) which will be necessary for the
production phase of the project. The Company is supported by MYMA (Minería y
Medio Ambiente Ltda), which specialises in environmental studies and
permitting.
For the purpose of assessing possible impacts CleanTech Lithium plans to
develop close relationships with project stakeholders. The Company has
recently opened an office in Copiapó and is developing an Early Engagement
Plan (PACA) that aims to keep an open communication channel with relevant
community bodies and organisations and allows for a continuous assessment of
the social impact of the project.
Conclusions and Recommendations
Francisco Basin is classified as an immature clastic salt lake basin. The
total resource for the Project is estimated at 919,346 tonnes of LCE, with
443,215 tonnes being in the Indicated resource category and 476,130 tonnes
being in the Inferred resource category. The average lithium value is 207 mg/l
Lithium.
Public studies of the lithium market indicate strong demand and sustained high
prices during the evaluation period. The demand for electric vehicles
continues to increase, and progressively more countries are declaring bans on
the sale of combustion vehicles in the coming years, ensuring the elevated
levels of demand for lithium.
Chile is one of the few countries in the world where there are lithium
deposits in continental brines, so the interest and supply requirements for
this material should be of national interest.
The offer of a project with low environmental impact is in line with current
regulations, so meeting the standards of environmental regulations should be a
focus. At this point, it is necessary to have more information on the
reinjection system and the development of a hydrogeological model that
confirms the low impact on groundwater and its null impact on lake surfaces.
The operating cost, according to what is indicated in the scoping study
(-15%/+35% accuracy), of US$ 3,641 per tonne, is a competitive cost for the
projected prices, even in comparison with the costs of projects from
continental brines and with traditional processes (solar evaporation).
The capital cost of the project is estimated (-15%/+ 30%) at US$ 450 million,
considering 20% contingencies.
The economic analysis of the project, after taxes, gives a Net Present Value
of US$ 1.1 billion, using a discount rate of 8%, and giving an internal rate
of return of 43.5%. The term to recover the investment (payback period) is 2
years and 7 months.
The sensitivity analysis of the economic evaluation model shows that the
factor that most impacts the Present Value of the project, for the same
variations, is the Price factor. And with respect to IRR, both the Price and
Capex are the most influential parameters.
It is recommended that a further resource drilling programme is undertaken at
the project with the aim of further expanding and upgrading the current
resource estimate. A plan for the location of the next stage of drillholes
comprising a total of four wells is shown in Figure 9 below. This is based on
three additional resource wells drilled with diamond drilling, labelled FB07 -
FB09, with FB07 planned for the same site as well FB02 which was not
successfully completed during the 1H 2023 drilling programme. An additional
wide diameter reverse flooded well, labelled IFFB01, is recommended
specifically designed for reinjection tests.
Fig 9: Francisco Basin Recommended Drillhole Locations
Based on the results of the initial explorations and the future exploration
program, it is concluded that the Francisco Basin Project justifies continuing
its development to determine if the lithium resource can be turned into a
reserve, in terms of economic and technical aspects, and confirm the
feasibility of its production on a pilot scale.
For further information contact:
CleanTech Lithium PLC
Aldo Boitano/Gordon Stein Jersey office: +44 (0) 1534 668 321
Chile office: +562-32239222
Or via Celicourt
Celicourt Communications +44 (0) 20 7770 6424
Felicity Winkles/Philip Dennis/Ali AlQahtani cleantech@celicourt.uk
Dr. Reuter Investor Relations +49 69 1532 5857
Dr. Eva Reuter
Porter Novelli - Chile +569 95348744
Ernesto Escobar Ernesto@publicoporternovelli.cl
Harbor Access - North America +1 475 477 9401
Jonathan Paterson/Lisa Micali
Beaumont Cornish Limited +44 (0) 207 628 3396
(Nominated Adviser)
Roland Cornish/Asia Szusciak
Fox-Davies Capital Limited +44 20 3884 8450
(Joint Broker)
Daniel Fox-Davies daniel@fox-davies.com (mailto:daniel@fox-davies.com)
Canaccord Genuity Limited +44 (0) 207 523 4680
(Joint Broker)
James Asensio
Gordon Hamilton
Competent Persons
The following professionals act as qualified persons, as defined in the AIM
Note for Mining, Oil and Gas Companies (June 2009):
· Christian Gert Feddersen Welkner: Geologist and Master of Science,
major in geology (University of Chile). With more than 20 years of experience,
Mr Feddersen is a qualified person independent of the company and a member of
the Chile Mining Resources and Reserves Competence Qualifying Commission, a
"Recognised Professional Organisation" (OPR). He is registered with No. 132 in
the public registry of Competent Persons in Mineral Resources and Reserves,
under the Law of Competent Persons and its Regulations in force in Chile. Mr
Feddersen, who has reviewed and approved the geological information included
in the announcement, has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and the activity being
undertaken and qualifies as a competent person, as defined in the JORC Code.
· Marcelo Bravo: Chemical Engineer (Universidad Católica del Norte),
has a Master's Degree in Engineering Sciences major in Mineral Processing,
Universidad de Antofagasta. He currently works as a Senior Process Consulting
Engineer at the Ad-Infinitum company. Mr Bravo has relevant experience in
researching and developing potassium, lithium carbonate, and solar
evapo-concentration design processes in Chile, Argentina, and Bolivia. Mr
Bravo, who has reviewed and approved the information contained in the chapters
relevant to his expertise contained in this announcement, is registered with
No. 412 in the public registry of Competent Persons in Mining Resources and
Reserves per the Law of Persons Competent and its Regulations in force in
Chile. Mr Bravo has sufficient experience relevant to the metallurgical tests
and the type of subsequent processing of the extracted brines under
consideration and to the activity being carried out to qualify as a competent
person, as defined in the JORC Code.
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.
Cautionary Statement
The Scoping Study referred to in this AIM release has been undertaken for the
purpose of initial evaluation of a potential development of the Francisco
Basin Project located approximately 110 km, in a straight line, at east of
Copiapó city, south of the Maricunga salt flat, Copiapó Municipality,
Copiapó Province, Atacama III Region, Chile ("Francisco Basin Project"). It
is a preliminary technical and economic study of the potential viability of
the Francisco Basin Project. The Scoping Study outcomes, production target and
forecast financial information referred to in the release are based on low
level technical and economic assessments that are insufficient to support
estimation of Ore Reserves.
The Scoping Study is presented in US dollars to an accuracy level of +/- 35%.
While each of the modifying factors was considered and applied, there is no
certainty of eventual conversion to Ore Reserves or that the production target
itself will be realised. Further exploration and evaluation and appropriate
studies are required before CleanTech Lithium will be able to estimate any Ore
Reserves or to provide any assurance of any economic development case. Given
the uncertainties involved, investors should not make any investment decisions
based solely on the results of the Scoping Study. Of the Mineral Resources
scheduled for extraction in the Scoping Study production plan, approximately
68% are classified as Indicated and 32% as Inferred during the 12+-year
evaluation period.
The Company has concluded that it has reasonable grounds for disclosing a
production target which includes an amount of Inferred Mineral Resources.
There is a low level of geological confidence associated with Inferred Mineral
Resources and there is no certainty that further exploration work will result
in the determination of Indicated Mineral Resources or that the production
target itself will be realised. Inferred Mineral Resources support production
over the last 4 years of operation. The viability of the development scenario
envisaged in the Scoping Study does not depend on the inclusion of Inferred
Mineral Resources. Removing the Inferred Resources from the mine plan still
provides a positive NPV and attractive IRR but reduces the production life to
8 years.
The Mineral Resources underpinning the production target in the Scoping Study
have been prepared by a competent person in accordance with the requirements
of the JORC Code (2012). For full details on the Mineral Resource estimate,
please refer to the AIM announcement by CleanTech Lithium plc of 24 August
2023 for the Francisco Basin project.
Other than as presented in this announcement, CleanTech Lithium plc confirms
that it is not aware of any new information or data that materially affects
the information included in previous announcements and that all material
assumptions and technical parameters underpinning the estimate continue to
apply and have not been changed. This Scoping Study is based on the material
assumptions outlined in this announcement. These include assumptions about the
availability of funding. While CleanTech Lithium plc considers that all the
material assumptions are based on reasonable grounds, there is no certainty
that they will prove to be correct or that the range of outcomes indicated by
the Scoping Study will be achieved.
To achieve the range of outcomes indicated in the Scoping Study, funding in
the order of between US$400-450 million will likely be required. Investors
should note that that there is no certainty that CleanTech Lithium plc will be
able to raise that amount of funding when needed. It is also possible that
such funding may only be available on terms that may be dilutive to or
otherwise affect the value of CleanTech Lithium plc's existing shares. It is
also possible that CleanTech Lithium plc could pursue other value realisation
strategies such as an agreement with a strategic partner for future funding
and offtake, a sale or partial sale of its interest in the Francisco Basin
Project or other potentially dilutive options. If it does, this could
materially reduce CleanTech Lithium plc's proportionate ownership of the
project.
This announcement contains forward-looking statements. CleanTech Lithium plc
has concluded that it has a reasonable basis for providing these
forward-looking statements and believes it has a reasonable basis to expect it
will be able to fund development of the Francisco Basin Project. However,
several factors could cause actual results or expectations to differ
materially from the results expressed or implied in the forward-looking
statements. Given the uncertainties involved, investors should not make any
investment decisions based solely of the results of this study.
Important Information for this Announcement
The Scoping Study has been prepared and reported in accordance with the
requirements of the JORC Code (2012). The primary purpose of the Scoping
Study is to establish whether or not to proceed to a Pre-Feasibility Study
("PFS") and has been prepared to an accuracy level of +/- 35%, the Scoping
Study results should not be considered a profit forecast or production
forecast. As defined by the JORC Code, a "Scoping Study is an order of
magnitude technical and economic study of the potential viability of Mineral
Resources. It includes appropriate assessments of realistic assumed Modifying
Factors together with any other relevant operational factors that are
necessary to demonstrate at the time of reporting that progress to a
Pre-Feasibility Study can be justified."
The Modifying Factors included in the JORC Code have been assessed as part of
the Scoping Study, including mining (brine extraction), processing,
metallurgical, infrastructure, economic, marketing, legal, environmental,
social and government factors. The Company has received advice from
appropriate experts when assessing each Modifying Factor.
Following an assessment of the results of the Scoping Study, the Company has
formed the view that a PFS is justified for the Francisco Basin project, which
it will commence following completion of the recommended drilling programme.
The PFS will provide the Company with a more comprehensive assessment of a
range of options for the technical and economic viability of the Francisco
Basin project.
The Company has concluded it has a reasonable basis for providing any of the
forward-looking statements included in this announcement and believes that it
has a reasonable basis to expect that the Company will be able to fund its
stated objective of completing a PFS for the Francisco Basin project. All
material assumptions on which the forecast financial information is based are
set out in this announcement.
Some of the statements appearing in this announcement may be in the nature of
"forward-looking statements" which include all statements other than
statements of historical fact, including, without limitation, those regarding
the Company's financial position, business strategy, plans and objectives of
management for future operations, or any statements preceded by, followed by
or that include the words "targets", "believes", "expects", "aims", "intends",
"will", "may", "anticipates", "would", "could" or similar expressions or
negatives thereof. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors beyond the Company's control
that could cause the actual results, performance or achievements of the Group
to be materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such forward-looking
statements are based on numerous assumptions regarding the Company's present
and future business strategies and the environment in which the Company will
operate in the future. These forward-looking statements speak only as at the
date of this document. The Company expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statements are based unless required to do so
by applicable law or the AIM Rules.
Beaumont Cornish Limited, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as nominated adviser to
the Company in relation to the matters referred herein. Beaumont Cornish
Limited is acting exclusively for the Company and for no one else in relation
to the matters described in this announcement and is not advising any other
person and accordingly will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Beaumont Cornish
Limited, or for providing advice in relation to the contents of this
announcement or any matter referred to in it.
Notes
About CleanTech Lithium
CleanTech Lithium (AIM:CTL, Frankfurt:T2N, OTCQX:CTLHF) is an exploration and
development company advancing sustainable lithium projects in Chile for the
clean energy transition. Committed to net-zero, CleanTech Lithium's mission is
to produce material quantities of battery grade using sustainable Direct
Lithium Extraction technology, powered by renewable energy, the Company plan
to be the leading supplier of 'green' lithium to the EV and battery
manufacturing market.
CleanTech Lithium has three lithium projects - Laguna Verde, Francisco Basin
and Llamara - located in the lithium triangle, the world's centre for battery
grade lithium production. The Laguna Verde and Francisco Basin projects are
situated within basins controlled by the Company, which affords significant
potential development and operational advantages. Llamara is the Company's
latest greenfield project, which offers material potential upside at a low
initial cost. All three projects have direct access to existing infrastructure
and renewable power.
CleanTech Lithium is committed to using renewable power for processing and
reducing the environmental impact of its lithium production by utilising
Direct Lithium Extraction. Direct Lithium Extraction is a transformative
technology which removes lithium from brine, with higher recoveries and
purities. The method offers short development lead times, low upfront capex,
with no extensive site construction and no evaporation pond development so
there is no water depletion from the aquifer. www.ctlithium.com
(http://www.ctlithium.com)
**ENDS**
List of Abbreviations used in Scoping Study
% percentage m/d metres per day
°C temperature in degrees Celsius mg milligram
3D three dimensional Mg magnesium
m.a.s.l. meters above sea level mg/L milligrams per litre
ALS ALS Life Sciences Chile mL millilitre
B boron mm millimetre
BV bed volume mm/year millimetres per year
Ca calcium US$MN million dollars
CaCl(2) calcium chloride MVR mechanical vapor recompression
CaCO(3) calcium carbonate MW megawatt
Ca(OH)(2) calcium hydroxide MWh megawatt hour
CAPEX Capital Cost Estimates Na sodium
CCHEN Chilean National Nuclear Commission Na(2)CO(3) sodium carbonate (soda ash)
CEOL Special Operation Contracts for Lithium NaCl halite
Cl chlorine NaOH sodium hydroxide
CODELCO National Copper Corporation NF nanofiltration
CONAMA National Environment Committee NFB nanofiltration for Boron
CORFO Development Corporation No. number
CP competent person NI National Instrument
CPR competent person report NPV Net Present Value
CTL CleanTech Lithium OPEX Operating Cost Estimates
CYMA engineering and management company Pe effective porosity
cm centimetre pH The measure of acidity or alkalinity
cm(3) cubic centimetres PPA power purchase agreement
DGA General Water Directorate Pt total porosity
DIA Environmental Impact Statement QA/QC quality assurance/quality control
DLE direct lithium extraction QP Qualified Person
DTM digital surface model RBRC relative brine release capacity
EIA Environmental Impact Study RCA Environmental Qualification Resolutions
ENAMI National Mining Company RO reverse osmosis
GPS global positioning system RQD rock quality designator
Has hectares R+D research and development
H(3)BO(3) boric acid SEA Environmental Assessment Service
HCl hydrochloric acid SEIA Environmental Impact Assessment System
ICP-OES inductively coupled plasma - optical emission spectrometry SERNAGEOMIN National Geology and Mining Service
IRD French Institute de Recherche pour le Development S-L solid-liquid
IRR Internal Rate of Return SO(4) sulfate
IVA value added tax SRK SRK Consulting
IX ion exchange SS Scoping Study
JORC Joint Ore Reserves Committee Sr Specific retention
JV joint venture SX solvent extraction
K potassium Sy specific yield/drainable porosity
km kilometre TEM transient electromagnetic
km(2) square kilometre t tonnes
KV kilovolt tonne/hr tonnes per hour
L/s litres per second t/y tonnes per year
LCE lithium carbonate equivalent TDS total dissolved solids
Li lithium US$ United States dollar
LiOH*H(2)O lithium hydroxide WBS work breakdown structure
Li(2)CO(3) lithium carbonate WML Wealth Minerals Ltd.
LV Laguna Verde y year
m metre ZOIT Zone of Tourist Interest
m(3) cubic metres
JORC Code, 2012 Edition - Table 1 report
Francisco Basin
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Criteria JORC Code explanation Commentary
Sampling techniques · Nature and quality of sampling (eg cut channels, random chips, or · After the wells PVC casing and silica gravel installation, a
specific specialised industry standard measurement tools appropriate to the development process took place. The well development includes an injection of
minerals under investigation, such as down hole gamma sondes, or handheld XRF a hypochlorite solution to break the drilling additives, enough solution
instruments, etc). These examples should not be taken as limiting the broad actuation waiting time and then, purging of minimum three well volumes
meaning of sampling. operation to clean the cased well from drilling mud and injected fresh water.
· Include reference to measures taken to ensure sample representivity
and the appropriate calibration of any measurement tools or systems used. · The developing process was made using a small rig, a
high-pressure compressor and 2-inch threaded PVC that can be coupled to reach
· Aspects of the determination of mineralisation that are Material to any depth. The purging/cleaning operation is made from top to bottom,
the Public Report. injecting air with a hose inside the 2-inch PVC and "suctioning" the water,
emulating a Reverse Circulation (Air-Lift) system.
· In cases where 'industry standard' work has been done this would be
relatively simple (eg 'reverse circulation drilling was used to obtain 1 m · Once the well is verified, clan assuring that the purged water is
samples from which 3 kg was pulverised to produce a 30 g charge for fire brine coming from the aquifer, the PVC Casing Suction (Air-Lift) samples were
assay'). In other cases more explanation may be required, such as where there taken on FB01 well from bottom to top, while the 2-inch PVC is extracted from
is coarse gold that has inherent sampling problems. Unusual commodities or the well. A 20-liter bucket is filled with brine and the brine sample is
mineralisation types (eg submarine nodules) may warrant disclosure of detailed obtained from the bucket once the remaining fine sediments that could appear
information. in the sample decant.
· One-liter Samples every 3 m were taken and, every 6 m sent to
laboratory to preserve a second sample set for auditory purposes.
· Conductivity-based TDS and T°C were measured in every sample
with a Hanna Multiparameter. All materials and sampling bottles were first
flushed with brine water before receiving the final sample.
· After the PVC Casing Suction sampling, a stabilization period of
minimum 5 days took place before proceed with the PVC Casing Bailer sampling
to let the well match the aquifer hydro-chemical stratigraphy.
· PVC Casing Disposable Bailer sampling process was made by JCP
Ltda., specialists in water sampling on drillholes FB01, FB02, FB03, FB05 and
FB06. Samples were taken from the interest depths with a double valve
discardable bailer. The bailer is lowered and raised with an electric cable
winch, to maintain a constant velocity and avoid bailer valves opening after
taking the sample from the desire support.
· PVC Casing Disposable Bailer samples were obtained every 6 m
support to avoid disturbing the entire column during the sampling process.
Conductivity-based TDS and Temperature °C were measured for every sample with
a Hanna multiparameter.
· PVC Casing Pressurized Bailer samples were obtained in FB04. A
pressurized bailer brand Solinst proportioned by Geomin SpA were used This
bailer permit to obtain sealed water samples down to 1,000 m with a pressure
system that open the and seal the sampler in the interest support.
· Pressurized Bailer samples were obtained every 6 m support to
avoid disturbing the entire column during the sampling process.
Conductivity-based TDS (Multi-TDS) and Temperature °C were measured for every
sample.
Drilling techniques · Drill type (eg core, reverse circulation, open-hole hammer, rotary · Reverse flooded drilling system with 20 to 14 inch diameter was used
air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or in well FB01, FB02, FB03 (FB03A) and FB04.
standard tube, depth of diamond tails, face-sampling bit or other type,
whether core is oriented and if so, by what method, etc).
· FB01 was cased and habilitated from 0 m to its final depth 335 m with
8-inch PVC.
· FB02 was cased and habilitated from 0 m to its final depth 351 m with
4-inch PVC.
· FB03 was cased and habilitated from 0 to 314 m with 4-inch PVC.
· FB04 was cased and habilitated from 0 m to 414m
· Diamond Drilling system with HQ3 diameters were used in FB05 and FB06
· FB05 was cased and habilitated 2 inch PVC from 0 m to 455 m
· FB06 was cased and habilitated 2 inch PVC from 0 m to 450 m
Drill sample recovery · Method of recording and assessing core and chip sample recoveries and · On Reverse Flooded Drilling system, cuttings and 10 kg sample bags
results assessed. were recovered for geological logging and tests purposes. Direct supervision
and continue geological logging were applied to assure recovery
· Measures taken to maximise sample recovery and ensure representative
nature of the samples. · On Diamond Drilling system, diamond core recovery were assured by
direct supervision and continuous geotechnical logging
· Whether a relationship exists between sample recovery and grade and
whether sample bias may have occurred due to preferential loss/gain of
fine/coarse material.
Logging · Whether core and chip samples have been geologically and · Continue geological logging took place during drilling
geotechnically logged to a level of detail to support appropriate Mineral
Resource estimation, mining studies and metallurgical studies. · For all 2022 brine samples conductivity-based TDS and Temperature °C
parameters were measured during the sampling
· Whether logging is qualitative or quantitative in nature. Core (or
costean, channel, etc) photography. · From 2023, for all brine samples conductivity-based TDS, pH and
Temperature °C parameters were measured during the sampling
· The total length and percentage of the relevant intersections logged.
Sub-sampling techniques and sample preparation · If core, whether cut or sawn and whether quarter, half or all core · On year 2022, during the brine samples batch preparation process,
taken. Standard (internal standard composed by known stable brine), Duplicates and
Blank samples (distilled water) were randomly included in the batch in the
· If non-core, whether riffled, tube sampled, rotary split, etc and rate of one every twenty original samples.
whether sampled wet or dry.
· From year 2023, during the brine samples batch preparation
· For all sample types, the nature, quality and appropriateness of the process, Standard (internal standard composed by known stable brine),
sample preparation technique. Duplicates and Blank samples (distilled water) were randomly included in the
batch in the rate of one every ten original samples.
· Quality control procedures adopted for all sub-sampling stages to
maximise representivity of samples. · After check samples insertion, all samples were re-numbered
before submitted to laboratory. The author personally supervised the
· Measures taken to ensure that the sampling is representative of the laboratory batch preparation process.
in situ material collected, including for instance results for field
duplicate/second-half sampling.
· Whether sample sizes are appropriate to the grain size of the
material being sampled.
Quality of assay data and laboratory tests · The nature, quality and appropriateness of the assaying and · Brine samples obtained on 2022 were assayed on ALS Life Science
laboratory procedures used and whether the technique is considered partial or Chile laboratory, by Li, K, B, Mg, Ca, Cu and Na by ICP-OES, method described
total. on QWI-IO-ICP-OES- 01 Edisión A, Modification 0 EPA 3005A; EPA 200.2.
· For geophysical tools, spectrometers, handheld XRF instruments, etc, · From year 2023 all brine samples were assayed also on ALS Life
the parameters used in determining the analysis including instrument make and Science Chile laboratory by ICP-OES, method described on QWI-IO-ICP-OES- 01
model, reading times, calibrations factors applied and their derivation, etc. Edisión A, Modification 0 EPA 3005A; EPA 200.2, but now reporting the full
element swift
· Nature of quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable levels of · Total Density use the method described on THOMPSON Y, TROEH DE.
accuracy (ie lack of bias) and precision have been established. Los suelos y su fertilidad.2002. Editorial Reverté S.A. Cuarta Edición.
Págs.75-85.
· Chlorine detemination described on QWI-IO-Cl-01 Emisión B mod. 1
Método basado en Standard Methods for the Examination of Water and
Wastewater, 23st Edition 2017. Método 4500-Cl-B QWI-IO-Cl-01 Emisión B, mod.
1. SM 4500-Cl- B, 22nd Edition 2012.
· Total Disolved Solids (TDS) with method describe on INN/SMA SM
2540 C Ed 22, 2012
· Sulfate according method described on INN/SMA SM 4500 SO4-D Ed
22, 2012
· Duplicates were obtained randomly during the brine sampling.
Also, Blanks (distilled water) and Standards were randomly inserted during the
laboratory batch preparation.
· The standards were prepared on the installations of Universidad
Católica del Norte using a known stable brine according procedure prepared by
Ad Infinitum. Standard nominal grade was calculated in a round robin process
that include 04 laboratories. ALS life Sciences Chile laboratory was validated
during the round robin process.
· Check samples composed by standards, duplicates and blanks were
inserted in a rate of one each twenty original samples during year 2022.
· From year 2023, check samples composed by standards, duplicates
and blanks were inserted in a rate of one each ten original samples
· For the 2023 QA/QC process, a new set of standards were
internally prepared on the Copiapó warehouse installations, using 200 liters
of brine obtained from Laguna Verde CleanTech project. Standard nominal
Lithium grade was calculated in a round robin process that include 04
laboratories (Ch. Feddersen Standards preparation, statistical analysis,
nominal valuation & laboratories analysis, February 2023)
· For the TEM Geophysical survey a Applied Electromagnetic Research
FAST-TEM 48 equipment was used, composed by a transmitter and receiver unit, a
PC and the circuit cables (buckle), with batteries as power source. A
coincident transmission / reception loop of 220x220 m2 was used for the 98
surveyed stations, reaching a survey depth of 400 m.
· The equipment used for the Gravimetry geophysical survey was a
Scintrex portable digital model CG-5 Autograv, type "microgravity meter", with
a 0.001 mGal resolution with tidal, temperature, pressure and leveling
automatic correction system
· The topographic data measured during the gravimetry survey were
acquired with a double frequency differential positioning equipment, brand CHC
NAV, model I-80 GNSS, that consists in two synchronized equipments, one fix
at a known topographic station and the other, mobile thru the surveyed
gravimetry stations
Verification of sampling and assaying · The verification of significant intersections by either independent · The assay data was verified by the author against the assay
or alternative company personnel. certificate.
· The use of twinned holes. · Geophysics were used as delivered by Terra Pacific and Geodatos
· Documentation of primary data, data entry procedures, data · Geological logs were managed by geology contractor GEOMIN and checked
verification, data storage (physical and electronic) protocols. by the competent person
· Discuss any adjustment to assay data. · Brine samples batches were prepared personally by the author or by
JCP Ltda. And Geomin SpA, with the supervision of the author. All data are in
EXCEL files
Location of data points · Accuracy and quality of surveys used to locate drill holes (collar · Drillhole collars were captured with non-differential hand held GPS.
and down-hole surveys), trenches, mine workings and other locations used in Position was verified by topographic features Total station topographic
Mineral Resource estimation. capture of the drillhole collars is pending
· Specification of the grid system used. · The TEM geophysical survey coordinates were captured with
non-differential hand held GPS.
· Quality and adequacy of topographic control.
· Gravimetry stations were captured with a double frequency
differential positioning equipment, brand CHC NAV, model I-80 GNSS, that
consists in two synchronized equipments, one fix at a known topographic
station and the other, mobile thru the surveyed gravimetry stations
· The coordinate system is UTM, Datum WGS84 Zone 19J
Data spacing and distribution · Data spacing for reporting of Exploration Results. · PVC Casing Suction brine samples were taken every 3 m and, sent to
laboratory every 6 m
· Whether the data spacing and distribution is sufficient to establish
the degree of geological and grade continuity appropriate for the Mineral
Resource and Ore Reserve estimation procedure(s) and classifications applied.
· PVC Casing Disposable Bailer brine samples were taken every 6 m
· Whether sample compositing has been applied.
· PVC Casing Pressurized Bailer brine samples were taken every 6 m
· For TEM geophysical survey a 750 m stations distance, in lines every
750 m were used.
· For the Gravimetry survey a 200 m to 300 m stations distance were
used
· The author believes that the data spacing and distribution is
sufficient to establish the degree of geological and grade continuity
appropriate for the Resource Estimation
Orientation of data in relation to geological structure · Whether the orientation of sampling achieves unbiased sampling of
possible structures and the extent to which this is known, considering the
deposit type.
· If the relationship between the drilling orientation and the
orientation of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if material.
Sample security · The measures taken to ensure sample security. · All brine samples were marked and immediately transported them to
Copiapó city warehouse
· The brine water samples were transported without any perturbation
directly to a warehouse in Copiapó city, were laboratory samples batch was
prepared and stored in sealed plastic coolers, then sent via currier to ALS
laboratory Santiago. All the process was made under the Competent Person
direct supervision.
· ALS personnel report that the samples were received without any
problem or disturbance
Audits or reviews · The results of any audits or reviews of sampling techniques and data. · The assay data was verified by the Competent Person against the assay
certificate.
· No audits were undertaken
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria JORC Code explanation Commentary
Mineral tenement and land tenure status · Type, reference name/number, location and ownership including · CleanTech Lithium holds in Francisco Basin 12,762 hectares of Mining
agreements or material issues with third parties such as joint ventures, Concessions, separated in 1,474 hectares Exploitation Concessions, 10,088
partnerships, overriding royalties, native title interests, historical sites, hectares of Exploitation Applications and 1,200 hectares of Exploration
wilderness or national park and environmental settings. Applications.
· The security of the tenure held at the time of reporting along with · The Competent Person relies in the Mining Expert Surveyor Mr, Juan
any known impediments to obtaining a licence to operate in the area. Bedmar.
· All concession acquisition costs and taxes have been fully paid and
that there are no claims or liens against them
· There are no known impediments to obtain the licence to operate in
the area
Exploration done by other parties · Acknowledgment and appraisal of exploration by other parties. · No Lithium Exploration works has been done by third parties in the
past
Geology · Deposit type, geological setting and style of mineralisation. · Francisco Basin are classified as the "Salar Marginal Facies" of a
hyper saline lagoon that approaches to an immature clastic salar
classification (Negro Francisco lagoon), with the lagoon corresponding to the
"salar nucleus"
Drill hole Information · A summary of all information material to the understanding of the · The following drillhole coordinates are in WGS84 zone 19 J Datum
exploration results including a tabulation of the following information for
all Material drill holes: · FB01 E479,904 N6,959,310 ELEV 4,151 m a.s.l.
o easting and northing of the drill hole collar · FB02 E483,350 N6,957,900 ELEV 4,164 m a.s.l.
o elevation or RL (Reduced Level - elevation above sea level in metres) of the · FB03 E483,949 N6,959,090 ELEV 4,161 m a.s.l.
drill hole collar
· FB03A E483,835 N6,959,040 ELEV 4,160 m a.s.l.
o dip and azimuth of the hole
· FB04 E482,715 N6,956,410 ELEV 4,177 m a.s.l.
o down hole length and interception depth
· FB05 E482,000 N6,957,900 ELEV 4,159 m a.s.l.
o hole length.
· FB06 E485,600 N6,957,900 ELEV 4,181 m a.s.l.
· If the exclusion of this information is justified on the basis that
the information is not Material and this exclusion does not detract from the
understanding of the report, the Competent Person should clearly explain why
this is the case.
Data aggregation methods · In reporting Exploration Results, weighting averaging techniques, · No low-grade cut-off or high-grade capping has been implemented due
maximum and/or minimum grade truncations (eg cutting of high grades) and to the consistent nature of the brine assay data
cut-off grades are usually Material and should be stated.
· No data aggregate of any kind has been implemented
· Where aggregate intercepts incorporate short lengths of high grade
results and longer lengths of low grade results, the procedure used for such
aggregation should be stated and some typical examples of such aggregations
should be shown in detail.
· The assumptions used for any reporting of metal equivalent values
should be clearly stated.
Relationship between mineralisation widths and intercept lengths · These relationships are particularly important in the reporting of · The relationship between aquifer widths and intercept lengths are
Exploration Results. direct
· If the geometry of the mineralisation with respect to the drill hole
angle is known, its nature should be reported.
· If it is not known and only the down hole lengths are reported, there
should be a clear statement to this effect (eg 'down hole length, true width
not known').
Diagrams · Appropriate maps and sections (with scales) and tabulations of · Addressed in the report
intercepts should be included for any significant discovery being reported
These should include, but not be limited to a plan view of drill hole collar
locations and appropriate sectional views.
Balanced reporting · Where comprehensive reporting of all Exploration Results is not · All results have been included.
practicable, representative reporting of both low and high grades and/or
widths should be practiced to avoid misleading reporting of Exploration
Results.
Other substantive exploration data · Other exploration data, if meaningful and material, should be · Pump Test on FB01 well just finished
reported including (but not limited to): geological observations; geophysical
survey results; geochemical survey results; bulk samples - size and method of · A 50 hp submergible electric pump, piping with flowmeters were used
treatment; metallurgical test results; bulk density, groundwater, geotechnical for the pump tests. The tests consist in 6-hour variable pump test to verify
and rock characteristics; potential deleterious or contaminating substances. the aquifer capabilities and a constant 12-hour pump test
· In FB01 the pump was installed at 159 m
Further work · The nature and scale of planned further work (eg tests for lateral · Drilling to be undertaken upgrade Inferred Resources to Measured +
extensions or depth extensions or large-scale step-out drilling). Indicated and Indicated Resouces to Measured Resources and to improve
drainable porosity estimation. Include a drillhole designed for reinjection
· Diagrams clearly highlighting the areas of possible extensions, tests
including the main geological interpretations and future drilling areas,
provided this information is not commercially sensitive. · Hydraulic testing be undertaken, for instance pumping tests from
wells to determine, aquifer properties, expected production rates, upgrade
Resources to Reserves and infrastructure design.
· Aquifer recharge dynamics be studied to determine the water balance
and subsequent production water balance. For instance, simultaneous data
recording of rainfall and subsurface brine level fluctuations to understand
the relationship between rainfall and aquifer recharge, and hence the brine
recharge of the aquifer. SGA Hydrogeologist consultants are actually working
on basins steady still model
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to
this section.)
Criteria JORC Code explanation Commentary
Database integrity · Measures taken to ensure that data has not been corrupted by, for · Cross-check of laboratory assay reports and Database
example, transcription or keying errors, between its initial collection and
its use for Mineral Resource estimation purposes. · QA/QC as described in Sampling Section
· Data validation procedures used.
Site visits · Comment on any site visits undertaken by the Competent Person and the
outcome of those visits.
· Continue supervision of March to May 2022 drilling campaign.
· If no site visits have been undertaken indicate why this is the case.
· Continue supervision on October 2022 to July 2023 drilling campaign
Geological interpretation · Confidence in (or conversely, the uncertainty of ) the geological
interpretation of the mineral deposit.
· For the geological interpretation was made based in the TEM study and
· Nature of the data used and of any assumptions made. drillholes
· The effect, if any, of alternative interpretations on Mineral · Low resistivities are associated with sediments saturated in brines,
Resource estimation. but also with very fine sediments or clays
· The use of geology in guiding and controlling Mineral Resource · Drillholes confirm the geological interpretations
estimation.
· The factors affecting continuity both of grade and geology.
Dimensions · The extent and variability of the Mineral Resource expressed as · The Brine Resource is a sub horizontal lens with an approximately
length (along strike or otherwise), plan width, and depth below surface to the area of 9 km x 5 km and 320 m wide
upper and lower limits of the Mineral Resource.
Estimation and modelling techniques · The nature and appropriateness of the estimation technique(s) applied · The brine ore model was built from the TEM geophysical surveys
and key assumptions, including treatment of extreme grade values, domaining, performed by Terra Pacific (Terra Pacific, 2018), and Golder-Kinross TEM
interpolation parameters and maximum distance of extrapolation from data survey profiles that are on public domain. 25 every 50 m plans were built,
points. If a computer assisted estimation method was chosen include a considering a north east limit at 2,500 m from FB01 drillhole (Indicated
description of computer software and parameters used. radius), that collide with the shore of the salt portion of the Del Negro
Francisco lagoon.
· The availability of check estimates, previous estimates and/or mine
production records and whether the Mineral Resource estimate takes appropriate · The built model was clipped from below with the basement surface
account of such data. constructed using the gravimetry survey performed by Geodatos (Geodatos, April
2023), and the basement intercepts in FB01 and FB05 drillholes and, from above
· The assumptions made regarding recovery of by-products. by the brine aquifer ceiling surface, constructed with the first brine aquifer
intercepts on FB01 (99 m), FB02 (260 m), FB04 (300 m), FB05 (195 m) and FB06
· Estimation of deleterious elements or other non-grade variables of (285 m) drillholes and, the interpreted brine intercept from TEM geophysics on
economic significance (eg sulphur for acid mine drainage characterisation). drillhole FB03 (305 m), to form the final 3D model. This final model
corresponds to the Francisco Basin Brine Ore Volume
· In the case of block model interpolation, the block size in relation
to the average sample spacing and the search employed. · One block model was constructed on Francisco Basin with the
following properties:
· Any assumptions behind modelling of selective mining units.
· Block size: 200 m x 200 m x 6 m.
· Any assumptions about correlation between variables.
· Block Model Origin: 484,800 East, 6,952,400 North, Level 4,080 m
· Description of how the geological interpretation was used to control a.s.l.
the resource estimates.
· N° Columns: 40
· Discussion of basis for using or not using grade cutting or capping.
· N° Rows: 60
· The process of validation, the checking process used, the comparison
of model data to drill hole data, and use of reconciliation data if available. · N° Levels: 90
· Rotation: 50° Clockwise
· The individual block variables are:
· Rock Type: 0=No Ore, 1= Brine Ore
· Density
· Percent
· Economic
· Material: 1=Upper Zone Sand-Gravel, 2=Inner Zone Clay, 3=Lower
Bed Consolidated Sand-Gravel Transitioning to Silt and 4 = 1,000 m around
FB05
· Li (Lithium)
· Mg (Magnesium)
· K (Potash)
· B (Boron)
· SO4
· Ca (Calcium)
· Category: 1=Measured, 2=Indicated and 3=Inferred
· Porosity
· Elevation
· The traditional Inverse to the Square Distance method to estimate
the block variables was used. To accomplish this, the samples from the
Sub-Surface Assay Resource Database were manually assigned to their
correspondent block levels on both block models. Once assigned, the block
variable values were calculated by levels with the correspondent assigned
samples and their horizontal distances from the individual block to estimate.
All calculations were performed in EXCEL files.
· The calculated block variables are:
· Lithium (Li)
· Magnesium (Mg)
· Potash (K)
· Boron (B)
· Sulfate (SO4)
· Calcium (Ca)
· To assign drainable porosity for resources calculation, the
Francisco Basin Brine Ore Volume was divided in the following units:
· Upper unit of Fine to coarse sands intercalated with fine
polymictic gravels and minor clay and tuff levels (block variable Material=1).
A drainable porosity of 22% was assigned to this unit according literature, as
a small amount of the resources lie inside this unit.
· Middle unit of clays beds with variable plasticity intercalated
with minor levels of fine sands and gypsum (block variable Material=2). This
unit presents RBRC values in FB05 samples between 0.2% and 5.1% depending on
the plasticity level and sand content. The suction level at 160 m of the pump
test performed in FB01 were located in the upper part of this clay unit,
giving transmittivity (k) values between 0.88 m/d and 1.23 m/d. These k values
are related with much higher drainable porosity values.
On the FB01 detailed cutting geological logging, this unit appear with more
fine sand beds intercalations, more sand content and lower plasticity levels.
In FB02 this unit also appear with more sand content and lower plasticity
levels. Considering all, a drainable porosity of 8% were assigned to this
unit.
· Basal unit of moderately consolidated gravels and sands,
transitioning to silt beds (block variable Material=3) This unit presents RBRC
values in FB05 samples between 0.7% and 10.8%. In FB01 this unit is composed
mainly by sands with scarce gravels that are related with higher drainable
porosity. To FB03 drillhole, this unit transition to a very soft silt bed with
minor plasticity level. This stratigraphical unit was the one that "swallow"
the drilling tools, provoking the rods brakeage and tools loose in that well
and should have high drainable porosity (silt could reach 20% according
literature). Also, starts to appear in the bottom of FB02 drillhole, before
the drilling rods brakeage and tools loose, just like in FB03
drillhole.Considering all, a drainable porosity of 15% were assigned to this
unit. For the blocks Material variable assignation between values 1 to 3, two
surfaces were built with the unit's contacts on Francisco Basin drillholes,
corresponding to the ceiling and bottom of the Middle Unit of Clay Bed. Then,
these surfaces were intercepted with the blocks that lie inside the Francisco
Basin Brine Ore Volume to assign their correspondent Material variable
value.
· Volume inside a 1,000 m radius around drillhole FB05 (block
variable Material=4) Blocks inside 1,000 m radius around FB05 were assigned
with block variable Material=4. For the blocks were variable Material=4, FB05
RBRC samples were manually assigned to their correspondent block level. Once
assigned, the block porosity values were copied by levels with the
correspondent RBRC sample value. All calculations were performed in EXCEL
file. The following is the file used for the porosity assignation around FB05
drillhole. 2023-08-03_PorosityEstimationFB05ReducedV1.xlsx
Moisture · Whether the tonnages are estimated on a dry basis or with natural · Not applicable for brine resources
moisture, and the method of determination of the moisture content.
Cut-off parameters · The basis of the adopted cut-off grade(s) or quality parameters · No cut-off parameters were used
applied.
Mining factors or assumptions · Assumptions made regarding possible mining methods, minimum mining · Mining will be undertaken by pumping brine from production wells and
dimensions and internal (or, if applicable, external) mining dilution. It is re-injection
always necessary as part of the process of determining reasonable prospects
for eventual economic extraction to consider potential mining methods, but the · Pump Test on FB01 well just finished
assumptions made regarding mining methods and parameters when estimating
Mineral Resources may not always be rigorous. Where this is the case, this · Pump Test on FB01 was made with a 50 hp submergible electric pump,
should be reported with an explanation of the basis of the mining assumptions piping with flowmeters were used for the pump tests. The tests consist in
made. 6-hour variable pump test to verify the aquifer capabilities and a constant
12-hour pump test
· In FB01 the pump was installed at 159 m
Metallurgical factors or assumptions · The basis for assumptions or predictions regarding metallurgical · The lithium carbonate production process considers six stages to
amenability. It is always necessary as part of the process of determining minimize the water and energy requirements:
reasonable prospects for eventual economic extraction to consider potential
metallurgical methods, but the assumptions regarding metallurgical treatment
processes and parameters made when reporting Mineral Resources may not always
be rigorous. Where this is the case, this should be reported with an 1. Direct Lithium Extraction (DLE)
explanation of the basis of the metallurgical assumptions made.
2. Concentration of the solution
3. Purification of the solution
4. Carbonation and Production of Li2CO3
5. Treatment of the Mother Liquor
6. Water Recovery
Lithium is selectively extracted in the DLE stage, and the brine is
reinjected. In the concentration stage, water is removed from the solution to
concentrate 1.2%Li, and 90% of the water is recovered. The conventional
purification and carbonation stages have been optimized to maximize production
and reduce contaminants, ensuring the battery-grade product is obtained.
In the mother liquor treatment stage, the solution is recovered and
concentrated, which provides 6 to 7 recovery points of Lithium, and process
water is recovered.
The overall recovery of lithium is 89,3%.
· The recovery of process water makes it possible to minimize the water
requirement of the process, and it has been estimated that water losses will
be 1.6 m3/tonne of product.
Environmen-tal factors or assumptions · Assumptions made regarding possible waste and process residue · The main environmental impacts expected is the Production Plant /
disposal options. It is always necessary as part of the process of determining Camp and the surface disturbance associated with production wells and brine
reasonable prospects for eventual economic extraction to consider the mixing ponds. These impacts are not expected to prevent project
potential environmental impacts of the mining and processing operation. While
at this stage the determination of potential environmental impacts,
particularly for a greenfields project, may not always be well advanced, the
status of early consideration of these potential environmental impacts should
be reported. Where these aspects have not been considered this should be
reported with an explanation of the environmental assumptions made.
Bulk density · Whether assumed or determined. If assumed, the basis for the · Bulk density is not relevant to brine resource estimation.
assumptions. If determined, the method used, whether wet or dry, the frequency
of the measurements, the nature, size and representativeness of the samples.
· The bulk density for bulk material must have been measured by methods
that adequately account for void spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within the deposit.
· Discuss assumptions for bulk density estimates used in the evaluation
process of the different materials.
Classification · The basis for the classification of the Mineral Resources into · The considered criteria were based on the recommended sampling
varying confidence categories. grid distances of the complementary guide to CH 20235 code to report resources
and reserves in brine deposits (Comision Calificadora en Competencias en
· Whether appropriate account has been taken of all relevant factors Recursos y Reservas Mineras, July 2021).
(ie relative confidence in tonnage/grade estimations, reliability of input
data, confidence in continuity of geology and metal values, quality, quantity
and distribution of the data).
· The resources categorization is dependent of the brine samples
· Whether the result appropriately reflects the Competent Person's view availability, their quality in terms of confidence and the drainable porosity
of the deposit. assignation confidence level.
· Considering the above, the resources categorization conditions
for the Francisco Basin block are:
· Blocks estimated at 2,500 m around FB01 and FB05 samples were
considered as INDICATED
· The rest of the blocks that don't match the above condition were
considered as INFERRED
· The result reflects the view of the Competent Person
Audits or reviews · The results of any audits or reviews of Mineral Resource estimates. · No audit or reviews were undertaken.
Discussion of relative accuracy/ confidence · Where appropriate a statement of the relative accuracy and confidence · The estimated tonnage represents the in-situ brine with no recovery
level in the Mineral Resource estimate using an approach or procedure deemed factor applied. It will not be possible to extract all of the contained brine
appropriate by the Competent Person. For example, the application of by pumping from production wells. The amount which can be extracted depends on
statistical or geostatistical procedures to quantify the relative accuracy of many factors including the permeability of the sediments, the drainable
the resource within stated confidence limits, or, if such an approach is not porosity, and the recharge dynamics of the aquifers.
deemed appropriate, a qualitative discussion of the factors that could affect
the relative accuracy and confidence of the estimate. · No production data are available for comparison
· The statement should specify whether it relates to global or local
estimates, and, if local, state the relevant tonnages, which should be
relevant to technical and economic evaluation. Documentation should include
assumptions made and the procedures used.
· These statements of relative accuracy and confidence of the estimate
should be compared with production data, where available.
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