Cypress Development (CYP.V) has completed the assembly of the pilot plant which will be used to test the metallurgical characteristics of the Clayton Valley Lithium project in Nevada. The outcome of the pilot plant program will be very important as Cypress will be testing the use of a chloride-based leaching process in combination with the Chemionex-Lionex process for direct lithium extraction.
This approach worked on a smaller scale basis and the pilot plant program could be seen as the moment of the truth. The flow sheet seems to make sense, and could perhaps mean a breakthrough for clay-hosted lithium projects as the sector will for sure be moving towards a ‘cleaner’ approach to recover the lithium versus the classic acid leaching processes. A successful outcome will further de-risk the project, and the subsequent feasibility study may show superior economics if the company uses a slightly higher lithium price compared to the PEA and PFS studies. Keep in mind the current market price for lithium carbonate exceeds $20,000 per tonne and if that price would have been used in the PFS, the NPV of the Clayton Valley project would have been substantially higher.
The pilot plant programme comes very timely as this appears to be the right time to consider developing a lithium project in North America as the economics will for sure be underpinned by a strong lithium price.
Disclosure: The author has a long position in Cypress Development. Cypress is a sponsor of the website. Please read our disclaimer.
