Canaccord Genuity initiates coverage on CleanTech Lithium at 'speculative buy'

Analysts at Canaccord Genuity initiated coverage on AIM-listed lithium exploration and development company CleanTech Lithium on Tuesday with a 'speculative buy' rating and a 290.0p target price.

Canaccord said the Northern Chile focussed company's Laguna Verde and Francisco Basin sites could be "standout assets" within the sector and expects Laguna Verde's resources to underpin a 30+ year life.

The Canadian bank stated that due to a lack of evaporation ponds, existing infrastructure and prefabrication of large plant components, it estimates low capital intensity of approximately $16,000 per tonne, with operating costs of $4,000 per tonne, while investment returns were predicted to be "rapid", with a fast ramp-up and strong margins underpinning approximately $150.0m-200.om in free cash flow per year from the first year of operation.

"DLE allows the company to minimise aquifer depletion, with a smaller geographical footprint than conventional evaporation brines, and the availability of renewable power should allow the company to pursue a target of close-to-zero emissions," noted Canaccord.

"There are also no indigenous communities within ~2 hours of the area. We believe these ESG credentials bode well for permitting at a time when the Chilean government has a strong focus on sustainability," added the analysts.

Reporting by Iain Gilbert at Sharecast.com