Cypress Development (CYP.V) and its partner, Lilac Solutions (a lithium extraction technology company) have reported on their most recent test work conducted on the clay-hosted lithium resource at Clayton Valley, Nevada. According to the recent results, approximately 83% of the lithium was recovered while 99% of the impurities were rejected. Both are important elements to ensure the economic viability of the Clayton Valley lithium project.
The test results will be used in the company’s upcoming pre-feasibility study which we expect to confirm the outcome of the PEA which was completed almost a year ago. If Cypress would be able to use an 83% recovery rate for its economic model (compared to 81.5% in the PEA), it would further reduce the risk of the project as the higher recovery rate could act as an additional buffer to mitigate any potential negative developments going from PEA to PFS.
Last year, we already established the project will – according to the PEA – generate tonnes of cash flow at $12,000/t LCE, but we also confirmed the project works at a lithium carbonate price of $8,000/t. And that’s important, as not every lithium project in the world will be built; those with the lowest capital intensity and lowest breakeven production prices will always have a strategic and competitive advantage over projects with poorer results.
The pre-feasibility study should be out soon, but we have no reason to expect any negative surprises.
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The author has a long position in Cypress Development. Cypress is a sponsor of the website.. Please read the disclaimer
