CleanTech Lithium (LSE:CTL) — Investor Updates Series - PFS / DFS 101 - The Road to Production

0:00 Good evening, ladies and gentlemen, and welcome to the CLEANTECH LITHIUM investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, could be submitted at any time. Just submit those using the Q and A tab on the right hand corner of your screen. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, we'll publish those where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to Daniel Fox, ladies. Good afternoon. Good evening.

0:31 Mark, thank you as always. Steve, good evening to you. How are you? Hi, Dan. So it's been a while. Obviously, we had a bit of a hiatus because, obviously, you're on the road in Europe, and then I'm afraid I was caught up. But delighted to see you back again for what is gonna be the next in our ongoing series of little sort of one zero one pockets. The plan for this evening was to do an overview of

0:57 PFS, BFS, and really the differences between them. I've been amazed that having been doing this for twenty four years, the number of people who can get through life without really understanding the differences and what's involved. So I think everybody's very much looking forward to that. However, it would be remiss of me not to just touch on the fact that the company put out a an r and s this morning announcing the commissioning of the pilot plant. And I know we've had a few questions from some shareholders about that. So if I may, I was gonna say, if we can have another time five, ten minutes on that, and then we'll try and keep today's session down to about sort of a just a half hour. But I know you guys put together a little video. So I was gonna say, Mark, if we could just play that video, and then we'll come back to Steve and ask him to go through the RNS detail.

3:04 Steve, getting very snazzy there with our graphics and our video ones. Yeah. So, yeah, we we put out an update this morning. I've actually got it to the left here. So the the pilot plant starts operations. Just I think everybody welcome just your thoughts and comments into how it's going, where we are. And I specifically, there was just a couple of questions that if anybody wants to please pass post a question, please do so in the chat.

3:30 But, yeah, obviously, a little little bit behind, but fantastic it's now away. Yes. Yeah. No. We we've been working on on this for for for quite some time. As as as we've said, we bought this pilot plant from from Sun Resin. It was built by the subsidiary in Belgium, Puritech, delivered

3:54 towards the end of last year, put into construction. We started to, to to commission. We had the sun resin, engineers, over the last, wouldn't know, week or so, completing that, that commissioning and getting the brine running through the, through the plant and getting, concentrated Eliwood, out at the other end. And and just to just to put this into into context, you know, for our our

4:24 shareholders, the purpose of the pilot plant is is is basically threefold. Now one is to be producing lithium in a pilot plant at sufficient scale that we get good engineering data, and we can optimize the plant to get good engineering data to feed into the prefeasibility study engineering. That that's very, very important. The second one is to start producing battery grade lithium carbonate that we can give to potential off takers, be there battery companies, car car companies, you know, or or traders, to start their product qualification pro program.

5:16 And the the qualification, program is is is quite, is quite complex, takes quite a lot of time. Generally, the, the offtakers will require initially a few kilograms of of of the product to do the chemical analysis, then they will require tens of kilos to start studying the the the morphology of the precipitate. Are they fine with with that? Are there any impurities of of of concern to them? If all all of that is fine, then they will want hundreds of kilos to do testing in their sort of demo cathode battery plants.

6:03 So so there's a a sort of three stage process there. So we're gonna be starting to make material even before we've started to to engage, you know, with with off takers, which we will be doing before too too long. Now the pilot plant, we operate we bring down brine, and the pilot plant is is based at at Copiapo, where we have people living there, all the support is there. And we can use it not just for processing brine from Laguna Verde, but we'll also do it from Francisco based on our other exploration projects. And we could do testing on third party brines in Chile as as well. So that's why it's located in in in in Copiopo.

6:53 Sorry. Just on on that that point, so how how far for those who don't know, so how far is Copiopo from from Laguna Verde? It's about 250 kilometers. Okay. So so what what we do is to pump brine from the the extraction wells into into tankers, and we truck it down to Copiapo. We have very large storage reservoirs in our facility, which we can then feed the brine through the the DLE plant,

7:25 produce concentrated Eliwood. The brine is about 200 ppm, just under 200 ppm lithium. We expect the the lithium in the concentrated Eliot to be in the region 406 to 600 parts per million. We then use reverse osmosis to concentrate that Eliot further to about 4,000 p ppm.

7:57 So that's that's the equipment that we have in the pilot place, the DLE and reverse osmosis to get a 4,000 Eliot. And how how sorry. So how long does how long does that take you? I mean, how does it take take you to run through to get to the the 400 and then to go from the 400 to the sorry, the four six hundred up to the 4,000?

8:17 Well, you're you're virtually gay getting the the the 400 instantaneously. The moment you start feeding the brine within hours, you're getting the four hundred PPM Eliwood. The the the pilot plant has 30 columns, and and and you're feeding six of them in in parallel. There's a couple of stages of absorption, and then the the the absorbed lithium on the on the on the absorbent is then washed off with with water. There's three parallel columns of three stages. When that is is is emitted from that, that is the concentrated Eliwood.

9:09 The whole cycle of processing of the 30 columns is about is about a forty hour cycle, but you're producing Eliwood within a couple of hours of feeding the brine into into the plant. The next stage to pass the the eluate, when we're satisfied, the, you know, the concentration is good, we've got all the processing conditions optimized, we will then pass through a reverse osmosis. And, again, you're you're looking at almost instantaneous within minutes, you know, of passing the the Eliwood through. You get a a 10 times concentration. You get pretty clean water out one side and concentrated Eliwood at 4,000 PPM at the at the other side. So this first stage is all to look at making what we consider a good quality Eliwood that we've eliminated the impurities.

10:07 And during the DLE, 9999.5% of the impurities are left behind in the spent brine. We get 9095% extraction of lithium into the the the concentrated eluate. This is the bit that we do in Kopjeopoe. Then the next stage is the downstream conversion to to lithium carbonate. And rather than spending $4,000,000 on building our our own plant

10:37 in in in in Kopiapo, there are existing facilities in in North America. And we've had discussions with three companies in in North America, and We've signed a contract with one called Conductive Energy. They're based out of out of Calgary. They they have their processing plant in in in in Chicago. And they've been doing this this work with DLE and conversion to to to carbonate for a number of projects in in North America in in the last year or two. And the other company we're working with is Forward Water Technologies of of Toronto, and it's their equipment that's forming the first part of the of the downstream processing.

11:30 From the the 4,000 PPM Eliot, we sent to to Chicago. Forward Technologies are sending their their reverse osmosis and forward osmosis plant in containers to the Conductive

11:53 Pilot plant facility. And that stage of forward and reverse osmosis and forward osmosis will increase the concentration to about 20,000 PPM lithium in the in the Eliot. Then the conductive energy process plant takes it further. They do the further removal of traces of calcium, magnesium, boron from ion exchange. Then it's the carbonation to precipitate lithium carbonate and bicarbonation to form the battery grade lithium carbonate, which then gets filtered and dried and and bagged. So that that's the process. It's two part. DLE is in Chile, and the downstream conversion is being done in in in in Chicago.

12:44 And the product will be analyzed both by conductive and independent laboratories now to confirm that it it is battery grade battery grade material. So picking up on that last point there, Steve. So just for for the shareholders general,

12:57 I mean, back of the envelope, We're now running cycles. You're producing Elliott. How many cycles do you need to do to get sufficient

13:07 Elliott at 4,000 PPM to then ship? And how much would you ship in one go? How long does it take to get from Chile up to Chicago?

13:16 And how long does it take then for the company in Chicago to go through that process to take it up to 20,000? Our our estimate is that to to get the first batch of of concentrated Eliot will take about a month. We're looking at shipping batches of 43 cubic meters of concentrated Eliot to to to to Chicago. That those go in in in tanks in containers

13:51 from the coast, whether it goes from from Antifa, Augusta or or or or Valparaiso. The the route would probably be through through Seattle and then by by truck to to Chicago. That's probably gonna take a couple of weeks, two, three weeks to to get to to Chicago. Then the the plant in in in Chicago has already will already have been set up. We've sent smaller quantities directly to Chicago for conductive energy to set up their plant specifically for our our Eliot so that when the larger quantity arrives, they start the processing immediately.

14:40 And, again, they obviously, they they need to do the final tweaking, make sure every part is working, but it should be weeks to produce the the lithium carbonate, then another week to get it analyzed. From a batch of 43 cubic meters that we send out, we'll be producing just over 800 kilograms you know, of lithium carbonate per per batch. And as I say, that that will be sufficient to to start off discussions with potential, you know, off takers because they only need kilos and tens of kilos Yeah. Initially. But once we start with multiple off takers who want hundreds of of kilos, we'll be sending more batches for processing.

15:30 And, Steve, on that note, I mean, I I know in the past, you know, with other companies when they send things off to labs, there's problems. But so how and then how long does it take to to go to the two labs so we can actually get that first report back, independent report saying your actual end product is battery grade? From from taking the the sample, sending it to a laboratory within two weeks, we'll have the the analysis. That that that's a normal time. Okay. So really And that's a full spread. That that's not just ensuring that it's more than 99.5% lithium carbonate, but it's the the full spectrum of all the impurities, you which are of concern to battery producers. Which on our last run, we were very happy that it looks like we have very low levels of impurities of all the that's in them. Yeah. When when when we first started working with with d with DLE, we produced a one kilogram sample, and that was more than 99.5%.

16:35 It's more like 99.9% lit lithium carbonate with very low impurities. So back of the envelope with a bit of slippage in. What we we'd hope to be able to sort of get that thing about about two months from today?

16:48 Well, middle of of of March. Yeah. We about that. No. Provided everything go go goes smoothly, we should be, during the course of May, having good data of what's going on at conductive energy. Now, clearly, over the next over the next month, now we'll have data coming out of the pilot plant in in copy of post. So we'll be able to give, you know, information how that is going, what the efficiency is, what the recovery is. You know, are we getting the 400 to 600 PPM? Are we getting the the upgrading to 4,000

17:24 p p m and what are the impurity levels of the Eliwood that we're gonna send to Chicago. And then the fun begins. I mean, I I I know in conversations that you have a number of parties who've approached in the data room, so all of them waiting to actually get that final end product and the first couple of kilos, and then we can start really

17:45 going out to market. And and and I I say that there there there's three main reasons, you for for this pilot plant, you know, is is is one, you know, to get process design information, two, to get product out, and three is for people to see it. You we want people in the community, the indigenous communities, the government, the universities, the students, the people in in Kopiopo to be able to visit, you know, the plant and actually see DLE in operation. Brine going in one end, Eliot going out the other end, spent brine going back into the tankers to be taken back to site. Excellent. Well, we very much look forward to having the updates. It's on how the process is going. And then, obviously, we look forward to two or so months from now when we can actually say, here is our end product, and then looking forward to seeing how those negotiations lead to potential offtake partners and end users.

18:40 Thank you very much for that, Steve. I think that's very useful. If anybody has any further questions, do please drop them into the q and a, and I will look to address them at the end. But so the main one for today though, Steve, was we've been talking about some of the key aspects that the company is gonna have to do to go through its journey from exploration through to being a producer. We touched the other day on the drilling campaign. We've touched on DLE technology. And, obviously, we put out an announcement about the expected date for the PFS. And I've had a number of people in the course of of conversation with shareholders asking to really understand what's the difference between the scoping study, the PFS, and then how the PFS sits into the DFS and the time is between that. And given that you've done this on a number of occasions before, I thought it'd be quite useful if we could just run through those,

19:28 in a generic sense, and then we can come back to Zoo applying that to how that is to CLEANTECH LITHIUM at the moment and where we are on that schedule, the various parts that are coming into the PFS, and then how the PFS will move in. Because a couple of people in the, the Telegram group were commenting earlier about the delay of certain of our peer group like, Lake Resources, how they took several years to go from the PFS to the DFS. And I know in our conversation that we've been discussing that not all PFSs are necessarily equal. And one of the things why we've decided to delay slightly is to get a much more robust and comprehensive PFS,

20:06 which will then allow us to feed more easily into the DFS. But maybe you wanna start with the generic definitions of scoping study forward. Yeah. Let's see if we can get these slides. First of all, let let let's talk a little bit about the situation in in in Chile because it's been very interesting in the last in the last month. Everybody's been concerned with the lithium price coming down, concerned about the government awarding CLs and the delays in in that.

20:40 The minister for for mining, you was in Toronto speaking at PEDEC a couple of weeks ago. And, again, she was very strong in saying, look. The government's moving ahead fast. They will expect by the end of March to have finished their their study in defining, you know, which SLAS will be protected from exploitation.

21:06 As you know, in the national lithium strategy, they say 30% will be protected, 70% will be allowed to go into exploitation. And that definition will be at the end of this month, and that will then be announced. They have just about finished all the dialogue with with with community groups, and she expects at the end of this month to be able to announce now what is the form of the contracts that will be put in place for the sales and to have a better definite definition of those contracts by the middle of of the year. Now in the middle of this, the the minister of finance was public in in in Chile and saying the government wants to see three or four new lithium projects in production by 2026, not including any expansions of projects by SQM or Albemarle.

22:08 So that's three to four new projects. And, basically, if you look at what's happening in Chile, nobody apart from CLEANTECH LITHIUM has done any exploration in detail, no full lithium, or have conducted any studies or have declared any resources. So if there are gonna be three or four projects

22:28 in production by 2026, we are way in advance of any other projects in in Chile. The other thing that you've seen in the recent weeks, clearly, lithium price collapse over the last year. There's lots of signs it's reached the bottom. It started to increase from the bottom of 12,000. It hit 15,000 yesterday, and all the analysts are expecting prices to continue to strengthen in the second half of of the year. So this is all looking very positive, for us. Now if we start to look at, at feasibility studies, basically, it's in three stages.

23:11 The preliminary economic assessment or scoping study, then it's the prefeasibility study, and the feasibility study. Lots of people talk about bankable feasibility studies. I just prefer feasibility study. And you're looking at different things in in each of these. With the with the scoping study, you're it's it's a low level study. You're looking for any red flags which will prevent the project from from proceeding. You're looking at early stage, you know, concepts. What resources do you have there? Basically, this is after exploration, after you've declared a a resource.

23:57 What type of metallurgy will be will be used?

24:02 What are the economics looking like based on very limited engineering and and largely desktop studies and looking at data and cost data, you from from a database? And, basically, we've done these conceptual studies

24:21 for both Laguna Verde and Francisco Basin. We produced results which look to have no red flags and and very robust economic results. Now once you've said that, you're then saying, do the results look good enough that we can progress into a prefeasibility study? And we said, yes. The results look good. Let's go on to a prefeasibility study. And that study is is, again, looking at the input, which is the the resources which you have, but you can only use those resources which you have a higher a degree of confidence. Those are the measured and measured and indicated resources as part of your as part of your study.

25:14 And what we're looking at is all the all the alternatives, alternatives, all the options that we have for the the project. It could be, you know, what are the alternatives in terms of the mining or the pumping or the location of the wells? What is the production rate? What is the the processing technology that that's going to be used? Is it going to be an absorbent based DLE? Is it going to obviously, we can't use evaporation. No no puns. That's no longer considered sustainable in in Chile. But there are other processing methods. What is the best processing methods to go downstream to get lithium carbonate? Do we wanna produce lithium carbonate? No. The market is in a period of change. No. Most of the battery manufacturers in North America and and the EU want lithium hydroxide for their high powered NMC batteries, you for the Porsches and Mercedes.

26:15 In in China, they want carbonate for the the lower power, but very much cheaper vehicles. Now we clearly have an advantage in selling into into the EU and and and and The United States. I want green lithium, you know, because, clearly, we've said we're gonna be powered off renewable energy, and we're going to be reinjecting the brine back underground so we don't deplete the the aquifer.

26:42 We should have preferential status, you know, for delivery of material into into the EU, but at the moment, they only want hydroxide. But that market is changing as well. There's been pushback, you from from consumers saying that the the the EV cars in in The United States and and Europe are too expensive.

27:04 They want cheaper vehicles. Now you're seeing the Chinese selling BYDs and others other vehicles into Europe. The European motor manufacturers have picked up on that. Renault are now looking at at at much cheaper vehicles. And the cheaper vehicles need the the LFP batteries, which require the lithium carbonate. So there's a growth in demand of lithium carbonate. And then coming down the road, not just yet, but within a couple of years, are solid state batteries. We've had I think I've mentioned before, Toyota are now commercializing their solid state batteries, and they're professing to have a range of 1,500 kilometers off the battery with a ten to fifteen minute recharge time. So a game changer as far as EV vehicles, and they're inherently safer.

27:57 And they need more lithium than the lithium ion battery because the anode is not graphite, but it's it's lithium.

28:06 So so just just coming back to the PFS so it's a bit more more focused. So those are some of the variables that would come in, but what are the things that CLEANTECH LITHIUM has to achieve in its milestones to get the PFS out?

28:19 Well, we we we have to study all all of the these aspects. I'll I'll I'll I'll get I'll go into in into more detail on on our particular PFS in in the next slide. But, basically, what we're looking at prefeasibility study is looking at all the options, and at the end of the day, looking at what we consider is the best option to take forward into a full feasibility study. So we we are doing lots of trade off studies and then finding out what is the best project to take forward. And that we go into the feasibility study. And and we're we're saying that this is the best project, then we go into much more, you know, engineering. We'll do somewhere just under 50%, you engineering.

29:09 We'll get much better information on the on the CapEx and the OpEx because we're going out for quotes on on the pieces of equipment. We have all of our material takeoffs and quantities and get quotes from engineering and construction companies. So we're building up a much more robust CapEx and OpEx estimate in the in the 10 to 15% range. And what we wanted the feasibility study is is have sufficient detail in the, you know, in the project in in the mining or the extraction of the brine, the processing of the brine, the plant location, infrastructure, the sources of power and water, and and all of those costs to a level

29:57 where the the company can say, yes. This project looks attractive. We wanna take it forward. And financing institutions can see that the that the project is one that they want to provide finance for. Hence, often it's called a bankable feasibility study because it meets the bank's the bank's requirements.

30:21 But both of the Sorry. These are the these stages. Interchange bankable feasibility study with feasibility study, and it's also the same interchangeable for definitive feasibility study. Yes. Yeah. Yeah. Okay. So all three terms, same thing. And the the PEA is also often referred to or interchange with scoping study. Correct. Yep. So Just

30:43 scoping study PEA conceptual in in nature, low level in in information.

30:48 Does it look interesting to take to PFS? PFS, look at all the options and look at what you consider the best project to take forward into feasibility study, and that you take into much more detail in terms of engineering costing and refining any issues that have arisen from the the the PFS. So those are basically the three stages of, of study. So I think the one thing I would sort of come come back to there slightly just on the on the on the PFS is that there's no there is no definitive set guideline because, obviously, we had hoped to be out earlier this year. There was a certain expectation. There was a certain disappointment. But I think the key thing that I think is it might be good to come across is that while there is a range of areas that need to be discussed, the the level of detail that you can go into can be, a certain depth or it can be much more. But the more you do into the PFS, so then the the more that should facilitate

31:47 the advancement of the DFS or the the feasibility study at a a swifter rate. So the point I think I want to come back to, open conversation with you, is that the the board has decided that it's it's important to have a much more comprehensive and thorough PFS. And when we look at the PFSs on some of the the peer groups, not all of them are as robust as we're hoping to be. Would that be fair? And and and in particular, what what you don't want to do is

32:17 start to go into other trade offs and look at options in your feasibility study. You do that at the prefeasibility study and, and come up with what is the best project, and then you work hard at delivering that feasibility study as rapidly as possible. Okay. Great. Let's move on to the next one. The the the the the next issue, know, a number of of laymen don't don't sort of recognize the difference between resources and reserves. Isn't it all the same thing? And and and no. It's not. Basically,

32:53 mineral resources, when you do do the exploration, you're looking at what is the valuable mineral, in our case, which is which is under underground. And that'll be in a ballpark. The whole aquifer, as we've declared, contains now, at the moment, 1,800,000 tons of lithium carbonate equivalent. Now you need reserves to be able to have a production plan,

33:21 which you have high confidence in, and that that will form your production forecast and finance financial forecast in the future. And in going from resources to reserves, you need to undertake a prefeasibility study or a feasibility study and look at all what we call modifying factors. Factors. You're you're looking at,

33:49 can those resources be be mined? Can they be processed? What are what are the economics of those?

33:58 Is there a cutoff grade below which is uneconomic to process those resources? Is there a market for the the material? Are there any legal impediments, any environmental issues that are preventing part of that resource, you from from being pro processed. Maybe part of the resource is sitting in a a national park. You can't get at it. But it's still a resource, but it will never become a reserve. Are there government issues? Yeah. We have a resource, but we don't have a reserve until we have a sale. And and that's the or or pretty much a guarantee of the of the sale. You need an operating contract to be able to to extract.

34:46 So what you're doing is looking at, from the resource, what is going to be, the economically minable part of that resource, which will be declared as, as reserves. And only the two parts, the indicators in the measure where you have higher confidence will go into what we call probable and proved reserves. And when I say confidence, it's common practice in Chile when when you're looking at at brine. If you're doing a drill hole, you're looking at an area of a one and a half kilometer radius around that that drill hole, and you're satisfied you have sufficient continuity that will be measured. The area which is from one and a half to three kilometers, no, from that drill hole will be indicated.

35:39 And anything more than three kilometers will have to be considered inferred as long as there is geological, in our case, geophysical data to indicate that there's there's the likelihood of lithium bearing material underground. So you've got those three confidence levels, and that translates into proved and probable reserves, which go into the production plan in the prefeasibility and the feasibility study. And this is the work I don't wanna segue too much off, but just on on that note, on on the current drilling, how much of the current drilling is expansion of the resource, and how much of the current drilling is to help move that resource into higher confidence levels of indicated and measured just for our shareholders? In in in Laguna Verde, we have 1,800,000 tons of of declared resource of which 1,100,000 is is measured and and and indicated.

36:44 With the with the geophysics, you know, we expected to find some additional material, you deeper, but I think probably that there there may be some increase in in the the overall measured and indicated resource, but we'll probably get more movement from the indicated into the measured and maybe some inferred into into indicated. So I think we're looking more for quality of of resource rather than increasing quantity of resource in this drilling campaign. But the the the major part of of the campaign is not so much in the resource, but it's getting an understanding of the hydrogeology. As I say, we we've engaged Montgomery and and and associates.

37:33 They need to get good information on the porosity and the permeability of the of the aquifer. That's why we're doing pumping tests to see at what rate we can extract the brine from the aquifer and what the drawdown rate, the cone of depression, as it's called, is. Also doing reinjection because we need not only to be able to extract, but then to demonstrate that we can reinject what happens when we reinject to the groundwater levels levels in those areas that we are injecting. All this goes into build a hydrogeological model, which we then use to plan the extraction well field and the reinjection well field as part of the prefeasibility study. So a lot of this drilling work is not just, to increase resources. It's to improve quality of the resource, but to get a lot more hydrogeological information, which is essential, for the production planning.

38:33 No. I I think it's quite important for many of you to remember this is sort of more like a an oilfield extraction than sort of traditional mine. Although we put ourselves as a mining company, it's it's much more to do with the wells and the reinjection and the drawdown and depletions, etcetera. Excellent. Well, thank you for that. Okay. So okay. Then then then if we look at at a PFS, this is the sort of chapters that go into a PFS, and this is our PFS for for Laguna Verde. And and there's there's many chapters there upfront. Basically, description of of the project, the, you know, the climate, where it is, history of exploration, the the geology deposit type, etcetera, etcetera. Then the bits I put in in in yellow is is where we have inputs, you know, real inputs in into the PFS, and the reds are where we have major outputs, you from from the PFS. So, clearly, chapter 10 is drilling. You know, we'll we'll have full description of what we've done, how we've done it, how many holes, where, what the results were, all the analysis.

39:45 So that's all in absolute detail. And then all of that data goes through verification, audit, know how we did the the laboratory analysis, the checks on the laboratories, that that's all good. We actually brought in an expert, a chap called Don Haynes, to do the the full, QAQC audit of all our processes from drilling, sampling, delivery to laboratory, getting the results. Steve, sorry. Just just for those who may not be aware, QAQC? Quality assurance, quality control to make sure we have absolute confidence in the results that we have produced.

40:31 And we chose Don Haynes because he wrote the standards in lithium brine analysis and resource estimation for the Canadian Institute of Metallurgy, which was used by the by the ASX for their guidelines for reporting under under JORC as well. And he gave a very good clean bill of health to all the work that we've done in terms of of the quality. Then, of course, we have the the resource estimates we've we've we've already put out for Laguna Verde, 1,800,000. And we'll have another resource estimate at the end of this drilling season this year. We have a whole chapter of 13 then, all the mineral processing and metallurgical testing we've been doing, ourselves in the laboratory testing, all the various resins and absorbents from many manufacturers.

41:30 We have results from the tests which those manufacturers have been doing at their facilities in China and Argentina and and and North America. And we'll be having the results from the pilot plant testing. We'll be going into into here. So this is all data that goes to feed into into the the the engineering. Now having defined the resource, having a very good understanding of the the hydrogeology and what is going to be used for the mining, either the the extraction wells and the reinjection wells and the processing, then Montgomery and Associates will use all of that information to put out the first mineral reserve estimate. So from the 1,800,000, not everything can be extracted extracted because a a lot of the water just can't be pumped from that aquifer.

42:25 And we'll get an estimate of how much of that can be recovered. And to give an indication ballpark in in Latin American brines, it's considered about a third of the resource can be recovered and as as as economically extractable lithium brine. Some brines with higher higher porosity, it may be higher than that. Others may be a bit lower than that, but that's a rule of thumb. So the the reserve will all always be significantly less than the than than the resource. Then the mining methods And but, Steve, on on that note of rotation, if we're doing two twenty thousand ton a year, 40,000 ton a year, we're looking at a 10 to 15, you're you're you're looking really to have a a reserve number at 400 to 600,000 tons.

43:22 Yeah. And and and and clear and clearly, depending on that reserve number, we did the scoping study at 20,000. That's we we thought that would be a good number. But when we're doing the the PFS, this full analysis, you know, of of of the reserves and the mining in terms of the the capacity of each well, well, where they will be located, where the reinjection will will be done to maximize the recovery of the of the resource, we'll get a much better idea of of whether the the optimum capacity for the project is it 20,000? Is it 17,000? Is it 22,000? And and that's will be one of the outputs of the prefeasibility study. What is the optimum production rate now from this from this project? Now clearly, want maximum production rate to maximize no cash flow, but it needs to be sustainable over a reasonably long period of time.

44:26 So that comes out out of here. Recovery methods. Now we've, we focused on using, absorbent resin. We're using alumina based, absorbent. It could have been a titanium based. It could have been solvent extraction, but, you know, we're using an alumina, no resin, in in our pilot plant. But then we need to put all the downstream, you processing stages as well all the way through to our end end product. Project infrastructure, that's a big issue. Where is the plant going to be? Is the entire plant all the way through to carbonate going to be at the project site, which is up at 4,300 meters where we can get, quite heavy snow, and it can get very cold, during the during the winter months?

45:22 Or do we only want to have the DLE and Eliwood concentration up at the project site and then transport the concentrated Eliwood down to a carbonation plant down on the coast? That means we have no. We don't have to transport all the carbonate and other sort of chemicals and things, you know, up to up to the the project site. And there may be benefits in doing that because we have two projects, know, Laguna Verde and Francisco Basin. Do we want to have a total duplicate plant, you know, all the way to carbonate at both facilities, or do we wanna have the DLE and Eliot concentration at both sites and ship the Eliot to a common downstream facility.

46:11 So these are all the issues we look at in the prefeasibility study. Power, water, what is the where is the grid in in Chile? We have an in interconnected grid. We have a power line. They're going to to the north of us to to to mining other mining projects. Does the line have the capacity for the 25 kilometer 25 megawatts that that that we need? Where does it where do we connect in? We would need to have a a substation there, then a transmission line to to the project. Is that overground? Is it underground? What is the routing to to get to to the the project site?

46:59 In discussion with the the power companies, do we build the, you know, the power line and pay for the CapEx and they just feed power into it, or will they contract to build the transmission line and we pay for the power delivered at the project site? Mhmm. Water. Where does the water come from? You know, do we put down water wells in the in the facility? But we're putting down extraction wells, and we're going through zones of of pretty much fresh water. Can we use the water before we get to the brine and treat that by reverse osmosis and get water for the project. So these are all the issues that we we look at there. Market studies. Again, what is the market for the product?

47:45 Hydroxide, carbonate, chloride, what are the trends in the in the future? All helps to drive us to define what is the best product that we want to make. And if it turns out to be carbonate is the best product for us, are we flexible enough in our project to in the future if the market changes and wants chloride for the solid state batteries? Will we be able to modify our plant to produce chloride in in the future? What are all the environmental, issues? At Laguna Verde, we have a lake, a very pretty green lake on on on on the surface. We need to be able to demonstrate with the hydrological modeling, and and we're pumping from sort of a hundred hundred and fifty meters below that that lake that we can extract and reinject without affecting the the the surface lake in in in any respect, you know, whatsoever.

48:47 What are the are there any endangered species in the in the area? Obviously, we'd we'd been doing baseline studies. We'll have a full environmental impact. But, again, we need to to highlight, are there any issues which could impact the permitting of this of this project? What are the communities living around the the the area? Obviously, there's nobody living within a 100 kilometers of the project site, but we are passing through communities on the transport corridors. So are there any issues No one. The social Okay. So I think I'm just cognizant we're we're running about ten minutes under the hour. Okay. So I I get a sense of all the detail then, Steve. Let's move on to the next one. I suppose one one question that comes out of this is, we're looking at doing the PFS for Laguna Verde at the moment. I imagine a large chunk of this, and, technically, the the market study things can get recycled into the PFS for Francisco Basin.

49:49 Yes. Yeah. Yeah. Obviously, the the drilling and resource is specific, but the the the mining, the extraction, reinjection design of the wells and the processing should be pretty much the same. So both the cost and the timing for the second PFS should be significantly less? It it should be because a lot of the work will will be done during this during this one. Okay. And, again, this is, you know, the the the the pilot plant and the data from from the pilot plant is is essential for the the engineering, you know, but particularly what are the, you know, the impurity levels that come through the the resin. They're all very small, but they have to be taken out, and that affects the design of the the downstream polishing and ion exchange and and other stuff.

50:44 So so the pilot plant is is essential input into the the PFS. And then what do we do with this PFS? And and and people say, why why haven't we gone out and got offtake contracts and financing and investors? And the reality is is all of this starts with a prefeasibility study. Now my experience is is that financing institutions, potential strategic investors in a project, they they they are not really spending the time or wanting to take projects to their board until there's at least a comprehensive prefeasibility study that demonstrates, yes, this is a good project. It's got good economic returns, and it can produce the the material which the the offtakers will will will want.

51:31 And after the pre pre feasibility study is done, we then do all of our work in in parallel. Now we define the project. We're into DFS. Whilst we're doing the the DFS, we are doing the environmental impact assessment. And we've done the the baseline studies. We will then use the prefeasibility project configuration and engineering in the EIA to determine what impacts and if there are, what mitigating measures are gonna be put in place. And then from the EIA, that gets submitted into the permitting authorities. With the PFS, we then start talking to to off takers.

52:18 We now have material which we can give them. We can say we can produce 20,000 tons a year, and we wanna start talking, offtake with you. But if you want our offtake, our nice green lithium offtake, how are you going to, cornerstone the the financing for this project? And this is where strategic investors and then we have five already signed up under under under NDA, and there will be more who will want the material. And largely, they will want to have a strategic investment in the prod not not in CLEANTECH LITHIUM, but at the project level. They're being pushed if you listen to the benchmark minerals and the MD Simon Malls.

53:04 He's still very strong every week and saying, look, you call companies, battery companies, if you want security of supply, you've got to take a position in the actual production process. So get an equity or a debt investment in these in these projects. So offtake strategic investors and financing. We've already talked to certain financing institutions like KFW, but there are many other multilaterals and commercial banks and streaming companies who, again, on the back of a PFS, will start to look at whether they want to be a participant in in the project. And, usually, I aim to line up the offtake contracts, the terms of the strategic investment, and the financing package all in agreements.

53:57 And they will be in a form that when we have certain things in place and we can start drawing down the, you know, the the the finance, all those agreements get, you know, get signed in a format that we can start drawing on finance. And that means there must be a positive DFS, the environmental permit must be in place, and there must be a seal, an operating contract, in place. So we can do all of those studies. We can then get our agreements in place. And when we have the DFS, the environmental permit, and the and the sale, that's then we can start to draw down the financing packages that we would have put put in place.

54:50 And all of this happens in parallel. Just to get cognizant of time, I do wanna get to the questions from shareholders. We're probably about five minutes over. But just on that note, looking at your flow sheet here, how long would you expect it to go from the PFS to the DFS given some of the comments people made about the timeline that it took, late between there two? My estimate if the prefeasibility study is is is very robust and thorough at looking at all the alternatives and coming out with the best, then we push with the same engineering company, Wally, into into the into the DFS. And my ex I've done a DFS in six months. I would expect middle of middle of next year would be a reasonable time for, you know, for a a a DFS.

55:40 We're looking I think the point the point we're trying to make here is that sometimes companies rush a PFS, and they put it out, maybe it's not as comprehensive, which then can lead to a a significant gap between the two Correct. In other people's cases. Yeah. Okay. I think that's very useful. I'm I'm conscious that we do have a number of questions from shareholders in. So that outlines the difference between the two and all the components. And then the DFS is just a further concentration between the two, and we hope there will be something between six to nine months between the two. What well, I just wanted to you got control of the slides there. What was our last slide that we had? No. That that was the end. That was that was that one. Okay. Well, thank you. I mean, I think that that's very useful for a number of people in just understanding the detail that goes in.

56:30 I would like to just because we were remiss we didn't get to all of them. There's a couple here we can answer. There's some that we can't. But, Steve, very briefly, we had a chat about the CLs and the political one. We understand there's no guaranteed time frame, but people are just asking whether you can comment about the ongoing discussions with the government. Yeah. I I they they we we've had discussions with with government, basically, they said, look. No. Thanks for your your submission. We submitted in in September last last year, but they they said, look. We we can't address we can't address those until we finish our exercise of defining which Salaz are going to be protected. And clearly, Laguna Verde will not be one of those. We have very strong community support who are pushing, you know, government very strongly and say, look. You wanna get ahead in in now with new lithium projects in Chile.

57:22 Here is an advanced project. Let's get let's get ahead with with with this one as quickly as as possible. So we could summarize that that sort of no no definitive feedback, but the minister's saying they want four up and running by 2026, of which we have to be in at least the top four in terms of advanced stage. At at the moment, there are no advanced projects in Chile except the two of, of of CLEANTECH LITHIUM. Nobody else has done any exploration whatsoever. Excellent. Okay. This came in from Steve M. Steve also just asked about the the lithium pricing. Obviously, the the sell off has not been great for the market and how we're seeing the demand versus supply. Steve, if I can say, Wilson's put out a report that we mentioned on our last call, which I'm happy to put in the telegram group. Canaccord has just given an an updated, pricing and so has benchmark, But they're all calling for a recovery over the next twelve to twenty four months significantly in the lithium price moving back into a deficit in the second half of this year.

58:21 But I think it's probably better to send you those reports, Steve, than than have us asking Steve here to go into depth because, obviously, we're just, we're taking a review on on third party consultancy. Right. There's a question here from ENGIE about what are the warrants for when do they come into effect. Ian, could you just reply back to that and I what warrants your do you talk about warranties or the warrants in the last financing? If you could clarify, I'll come back to you in a minute. Ali B Steve is asking is how's the Eliot gonna be transported to The US, but you touched on that. It's going on a container ship and then on trucks. Is the standard container sizes? I see. Well, I I think each each vessel is about 25 cubic meters, so there'll there'll be a couple a couple of containers going to to to to Chicago for each 43 cubic meter batch.

59:21 But they're standard I mean, they're they're obviously designed to take liquid, but they're they're standard standard shipping containers, so they will they'll be over shipping and road. Andy was coming in that the exact date's being quoted. Andy, I I think everybody's learned through years of mining that it's can be to the detriment to come in to give exact dates. Things can take a little bit longer. You might leave a day for downline. Obviously, all the plants being commissioned, it's still being sort of ramped up and going through that process. You delayed a day, and you missed a shipping date. So I think it's very prudent to give approximate dates of being around two months rather than trying to give hard and fast dates. Steve, is you are you happy with that? Yeah. Yeah. I I don't give hard dates. Yeah. I it's it's a a general regression. So Johnny was asking about the CLs. And, again, you know, that's with the government just doing their internal policy, and then they can go back to everybody. So that's a generic, governmental issue rather than something specifically.

1:00:17 But, again, I would reiterate when anybody asked about the sales. It was the Chilean government that invited CLEANTECH to put their CL applications in. It was at their suggestion. Originally, the company had anticipated on doing it at a slightly later date, but it was the government last year that said we should get on and put those applications in. And so it was with with their support and encouragement. Right. We have Lance b here. Well, let's just come back on. So one more question for John. Look at the current high end EV market upgrade to solid state batteries. John, I don't think either Steve or myself can really comment about solid state batteries into cars. I I can send you some research from other people on on the battery usage in the car industry, probably a bit bit more in-depth for you.

1:01:09 So, Steve, is asking a bit of a side step. But on the strategic note with respect to Francisco Basin, is it part of the current strategic goal to focus on LV with a view to commercializing that ahead of any substantive development on Francisco Basin such that the company perhaps look to sue self finance Francisco Basin with a view without being able to supply product at the margin than saying it's an offtake agreement. I imagine that's something that'll come out of the the two PFSs. Yeah. I think no no Francisco, no Basin. No. We've we've parked work on that because the the finance that we did at the at the end of last last year, we decided to apply all of that to progress Laguna Verde as rapidly as possible.

1:01:59 And, clearly, we need to learn a lot on the on on the design of extraction and reinjection wells and on the the processing with the with the DLE, with the pilot plant, and the engineering going into the PFS. All of that will be directly applicable in into Francisco Basin. So we should really do all of that work before we start the PFS on on on on Francisco Basin. But, clearly, when we have more funding available, we would like to go back into into Francisco Basin and get back into increasing the size of that resource, if you, you remember. We did limited drilling in Francisco Basin. We only have a well, we have a a good resource, a naught point 9,000,000 tons, but we'd like to get that one significantly increase.

1:02:50 So when we have funding, we will get back into the the drilling program of, of of Francisco Basin. Thank you. So, Miles was asking you saying, why why is the, the PFS always been in q one right up to our our weekly call on the very February 1? The the drilling and the pilot plant results have not been delayed since. We can come on to that in a slight clarification there, Miles. But a six month delay to the PFS, what new information led to this? And he's also just commenting that we've remained silent on the DFS and the funding. Obviously, we've spoken about the DFS and the delay between the two. And, Steve, I'll pass you in a second. But but, Miles, we we I I think we've been very candid that we have been delayed in the commissioning. It it happens.

1:03:35 You know, these are not off the shelf. Everything needs some tweaking. Different looks at resins. Some parts were delayed. I think we mentioned on one that some parts were miscent and then had to be returned. So the pilot plant has been delayed. We were hoping for it to be ready towards the, at the end of the third quarter, early fourth quarter last year. It's regrettable, but it's it's just the nature of, of the mining industry. So those have been one factors. But, Steve, just other comment piece about why the PFS has been delayed. Obviously, we've mentioned before how it's gonna be much more in-depth and thorough than we'd originally planned. Yeah. I I I I think the the the largest no no, reason for it is is really needing to get much much more robust and more hydrogeological data. You know, we we did our our drilling programs last year. We did a couple of pumping tests and recognized that we need to really understand the hydrologic hydrogeology of the basin, which is why we brought in Montgomery experts in this area.

1:04:48 We brought onboard another consultant who's been working in in Argentina on reinjection wells and doing this work as as part of the the work going into the into the the prefeasibility study. We cannot complete the prefeasibility study until we have very solid hydrogeological model to plan the extraction and and reinjection wells. And as I say, that work with with Montgomery, we engaged them at the end of last year. We raised the money in November to continue the the drilling work, and that work will go on until until May. And then we'll be doing the the analysis of resources, reserves, and the hydrogeological modeling update.

1:05:33 So that that's the that's the reality, the work needed to be done on the resource reserves and hydrogeology. Pilot plant delays, it it fits into that. There there are other things we're looking at as part of the the the PFS, you know, the the different products. But the the main rationale is making sure we've got thorough hydrogeological information because that's important feeding into the EIA. That one. And and, Miles, if I can just go on another one. So there was always a schedule of works, and the company had, hoped it was gonna go to the ASX towards the the third quarter last year. There was a backup on the the ASX. They had a a shortage of staff in both deals, which then led to a choice of the company between, again, going back to The UK market. But the the funds that were raised are doing these drilling programs. So that was a couple of months behind, which is led then to a delay of starting of the works.

1:06:33 And then as we've gone into more detail, the decision has been due to a much more robust PFS, which is just going to take longer. So you do sometimes get these slippage in dates, and that's what sort of came about. And we spread your comments about the DFS. The DFS, as Steve said, would look to come in after the PFS. And at that point, one could then start looking at what is the actual detailed funding requirements. And at that point, you're entering into conversations with both project financiers, the banks in terms of debt financing, and with offtake partners. So you really need to go for the PFS, the DFS give you hard and fast numbers, and then you can end into meaningful conversations about how you're going to fund that. The majority of which we believe will come in debt rather than, donation to shareholders.

1:07:21 On that one, oh, here's Steve. Steve, want to be diplomatic about. So, Neil Kaye was asking, in previous updates, we've we've talked about ourselves, in comparison to late resources, which is also looking to DLE project just over the border in Argentina, but, obviously, they don't own their entire basin. And and they've had a bit of a share collapse, although they've had some changes in senior management. And we're just asking is, given that we we've compared ourselves to them in terms of being at DLE and in Latin America, how can we avoid and how do we differentiate ourselves in terms of being able to represent the shareholder value or the value in the company and avoid the collapse of the share price that they've had? What we have to do do is is deliver very robust studies, which highlights, you know, what is the, you know, the capital cost and the operating cost.

1:08:19 You know, the scoping studies indicated a fairly low capital cost. Now many other DLE projects are coming out with with higher capital cost because of the the increased infrastructure which they have. Now, fortunately, we have a lot of existing infrastructure in in in in Chile. If we look at at at late resources, their big issues were were on on power. I think they had to put in 350 kilometers of of of power line and temporary diesel power in order to get themselves established. So their CapEx is is is very, very much higher.

1:09:06 I think during the, you know, their studies, they've been having a few project changes, which we clearly don't wanna do. We wanna look at all the alternatives at the PFS. And when we finish that, go fast into into PFS into DFS and make sure that we don't surprise the market at the end of the day. You know, when when you go into the market and say the, you know, the capital cost is, you know, 700,000,000, and then with production in 2026, then turnaround, it's gonna be 1,260,000,000 and production two years later. Clearly, shareholders don't don't like that. And so what we wanna make sure is our PFS is is thorough, and we can put that information out into the market to reassure everybody that we have confidence in what we're doing.

1:10:03 And I think that comes back to the point. There there are we've always said there are a number of projects out there, but when you look at them, there's a number that we question would ever actually get into production. We looked at a number of projects at Fox Davis before deciding to get involved, in trying to support CLEANTECH through their funding requirements and their IPO, the transition for a private onto the market. And one of the things we liked about is when we looked at it, we genuinely believe that the company has got a very strong chance of going through to being a producing lithium developer, for want of a better word. When we look at a lot of the peer groups, there are factors to do either location, people, power, access to water, people living on the property, which we think a lot of these projects will be difficult to overcome. In The US, you've got some, some lithium projects on native lands there with mass, native Indian burial sites on there and people protesting.

1:11:05 But in the case of CLEANTECH, owning the entire basin, allowing it to do its reinjection, the the fact that there are no people around, very limited fauna and fauna, the a very pro mining site in country, sorry, in terms of Chile, the fact of being a, free trade country with The US and the benefits from the inflation reduction act, all of these are huge massive positives for the company, which can tend to be overlooked. So in answer to that one, I I think the the key thing is we're maybe taking a little bit, longer than we would necessarily originally planned to do, but we're doing a thorough job. We're making sure that we inform the market on a regular basis, and we're making sure we don't come up with any surprises, so that we can meet our targets both in terms of costs and, deadlines for getting into production.

1:11:51 Steve, a thanks from Ian on the indications there from ENG. EMP is asking about Barclays are advising that due to changes in HMRC rules, he'll no longer behold CTL in his ISA. Ian, can I just if you want to email directly to me at [email protected], I will check with what the changes are of the rules and come back to you? That's probably one for this forum, but I'd be happy to address it to you offline. Ah, and the last question was about the warrants on the last financing. So, Steve, I'll I'll address that if that's okay. Sure. So it was a a half warrant or one warrant for every two shares, Ian. They are, were issued at a 50% premium, so they become in the money at thirty three p.

1:12:41 I can't remember if they were I think they're three years from memory. I'd have to get up and check. So they were an inducement as part of the market. So they are they are live now, but they don't go in the money until we're above thirty three p, and and they're just warrants that they were issued out to investors on the last round. Again, if you have any further questions, you're more than welcome to come back. So, Steve, then just in in in summary, scoping study, preliminary economic assessment, the same thing. We have our scoping studies. We're now moving into the PFS. The more you look into it, the more detailed you get, the it became then apparent that we needed sort of more hydrological studies, and there was a delay within the funding until November that we'd expected in September, which when we looked at we were hoping Montgomery would be able to do them all in the drilling, but we you're relying on third parties, when you do a PFS. There's a lot of there's a lot of component parts that are are coming back to the company. It's not the company that's it's obviously doing all these third parties. So we're reliant on other people's work schedules. You go out for an initial quote, and then if you can't commission them and actually say, let's get going until November, other things come along. That's one of the reasons why we had to push back, a few months on the PFS.

1:13:57 But the key things I need to take away is it's a very robust PFS that we're undertaking. It should then be a relatively short timeline from the PFS to the DFS. Great news today in terms of commissioning on the pilot plant, which, again, this is quite a substantial pilot plant. I mean, I I think some people talk about pilot plants, and you're talking about sort of backroom shared lab scales. This is a a fairly significant pilot plant capable of providing a lot of data and a lot of product, which is gonna be key to the company being able to engage with the most important audience here, which is gonna be the end users. So this is really significant and shouldn't really be overlooked in terms of the key milestone for the company's development.

1:14:42 And on that, Steve, then we're hoping that give or take two months, we should have our first end product and the reports back from the labs confirming exactly the grade of the lithium and the impurities, and then we can start engaging meaningfully with, offtake partners and and industrial users. I very much hope we can meet that. We shall try very, very hard. Steve, well, as always, thank you very much. We'll hopefully get back to schedule one in about two weeks' time. I think we're gonna be talking a little bit about how how project financing works. We're also hoping at some point in the next few weeks to get a further drilling update. I think that's the next off the ranks, but, again, that will come due when it's all ready. But to everybody else, thank you very much for, for joining. Thank you very much for the questions.

1:15:28 This will be posted, within a few hours to the company's site on Meet the Company. We'll post it into the Telegram group. If people will be happy to repost it, that's very much appreciated. And we're looking forward to seeing everybody in about two weeks' time. Steve, many thanks. Okay. That's a pleasure. Daniel, Steve, thank you very much indeed. Could I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations? So take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the team from CLEANTECH LITHIUM, we'd like to thank you for attending today's presentation. Good evening to you.