Cypress Development (CYP.V) has achieved an important milestone as the pilot plant has confirmed it is possible to produce battery-grade lithium carbonate from the clay-hosted lithium deposit at Clayton Valley.
According to the recent test work, the Lithium Carbonate reached a purity of 99.94% which is indeed sufficient to qualify as battery-grade lithium (which requires a minimum grade of 99.5%). That’s important as technical grade lithium commands a lower price compared to battery-grade carbonate which is currently trading at approximately US$70,000/t. That’s more than seven times higher than the lithium price used in Cypress’ base case scenario in the pre-feasibility study, and about five times higher than its bull case which was based on a lithium price of just over $14,000/t.
The confirmation of the production of battery-grade lithium is also important for the upcoming feasibility study and given the current lithium price on the world markets there’s zero doubt the company will be able to increase its base case lithium price. At the very least, that should be sufficient to compensate for the impact of inflation on the initial capex and opex.
Disclosure: The author has a long position in Cypress Development. Cypress is a sponsor of the website. Please read our disclaimer.
