RE: RNS out6 Jun 2024 08:09
6th June 2024
Clontarf Energy plc
("Clontarf" or the "Company")
Bolivia Lithium Update
3rd Phase of the 2024 evaporites Convocatoria
Clontarf Energy plc (AIM: CLON), wishes to report the following update:
Further to the Company's 6th, 18th March, and 15th May 2024 announcements, the Bolivian State Lithium Company ("YLB") received Clontarf's financial materials in relation to Phase 3 of the Call for Bids ("convocatoria") for the seven priority salares (salt pans) in Southern Bolivia.
Since Clontarf is an exploration company, and does not issue bonds, it does not have a credit rating and accordingly could not provide an 'A3' or 'A-' rating, as requested in the 2024 convocatoria tender documents. Neither could Clontarf's technology partner, since it is an R+D company, also without property or fixed assets in secure jurisdictions.
Accordingly, Clontarf identified an offtake partner, at the encouragement of the EU Commission, which has substantial revenues, profits and bank lines, as well as an 'A2' short-term credit rating. All requested documents were submitted by the deadlines, both physically and in digital form.
Unfortunately, the authorities appear to have declined the 'A2' short-term credit rating, possibly because the long-term credit rating (BBB+) was marginally below the requested 'A3'. This means that Clontarf hasn't passed through to the fourth stage of the convocatoria.
This regrettable outcome may not be well-grounded in policy or logic: Clontarf and its partners had undertaken to provide 100% of project capital, both from equity markets and appropriate infrastructural funds, to be channelled via the national borrowers. Accordingly, there seemed little logic for bonds, bank guarantees or ratings. Clontarf made these points both directly, and via EU entities. We continue to argue this case and are optimistic that, with proof of technology and confirmation of EU financial support, that this subject may be revisited whether in this or a future bid round, or direct negotiations.