Dear Shareholders,

In this update we are delighted to provide you with a report on progress since our Chairman’s Letter of November last year when we announced the commencement of our drilling programme in Cornwall.

Since the Chairman’s Letter, there have been a number of positive developments in the electric vehicle sector, all of which are encouraging for our project:

  1. The recent news from the British Government regarding the ban on sales of petrol, diesel and hybrid vehicles from 2035 onwards has focussed many minds in government towards the supply chain for the electric vehicle industry. This is particularly true for raw materials such as lithium – given its vital role in the energy transition, lithium was recently described by Volkswagen as the “the irreplaceable element of the Electric Era.” Our award of funding from Innovate UK’s Faraday Battery Challenge in June 2019 provided early evidence of government attention to this topic but, given the pace of change towards decarbonising the economy, we hope that more government funding will become available in the coming months.
  2. The rapid move towards electric vehicles has coincided with a global move towards “sustainable investing” and an ever-increasing focus on the provenance and carbon footprint of the supply of battery materials, particularly the need to reduce the distance between lithium production sites and battery factories and car manufacturing. We believe this is greatly in our favour as Cornish Lithium seeks to build a wholly low-carbon, sustainable supply of lithium for the UK economy. We believe that a domestic, low-carbon supply of lithium is likely to encourage developers to build lithium battery factories in Britain.
  3. The US based Breakthrough Energy Ventures fund, in which Bill Gates is a major investor, has invested US$20m into a lithium extraction technology company called Lilac Solutions. (See Link) This technology enables the rapid extraction of lithium from brines, such as those we are evaluating in Cornwall, and has focussed many minds on the possibilities that such innovation will bring.
  4. The combination of lithium extraction and geothermal energy has become an area of focus in Europe and, notably, a project called the “EuGeLi Project” has recently been awarded funding of €3.5m to explore the potential to produce zero carbon energy and to simultaneously extract lithium. By working on projects to combine lithium extraction with geothermal energy in Cornwall, Cornish Lithium aims to produce lithium with a near-zero carbon footprint. The fact that the first geothermal project to be drilled in Cornwall is situated right next to our own drill site is an opportunity we intend to explore going forward.

Lithium in Geothermal Brines

As we mentioned in our Chairman’s letter to shareholders, we commenced our drilling programme for lithium in geothermal brines in November 2019.

The first of our two-borehole test programme has now been completed and, encouragingly, identified more zones containing lithium enriched brines than we originally expected. For this reason, we decided to continue drilling beyond the original target depth of 900m, eventually ending the hole at nearly 1,100m after having passed through the overlying sedimentary rocks and into underlying granite rock. During this process we successfully trialled cutting-edge sampling techniques and are very pleased with early indications of flow rate and rock permeability. Initial tests are encouraging and have demonstrated that the geothermal brines recovered are indeed significantly enriched in lithium, as originally indicated by the data that Cornish Lithium has assembled from historic mining archives. As a result, we have now commenced discussions with potential commercial partners which have developed suitable extraction technologies. One such possible provider has developed technology which has successfully extracted lithium from geothermal brine in New Zealand and we are encouraged that such technology could potentially be suitable for our project. We also intend to continue working with UK based universities, one of which has recently developed a potentially commercial method of lithium extraction from geothermal brines. As mentioned earlier in this update the investment of US$20m by Breakthrough Energy Ventures highlights increasing interest in such technologies.

We recently commenced drilling our second hole and meanwhile continue to run scientific tests on the first hole to ensure we extract the maximum possible data from areas in which we encountered permeable geological structures carrying lithium enriched brines. As we have mentioned in the past, these test holes should be regarded as scientific in nature as we are using them to test various parameters such as permeability, flow rates, temperature and rock characteristics. This data is essential given our intention to quickly move towards additional drilling in other prospective areas where we have mineral rights agreements. Such additional drilling will ensure that we select the optimal site for further testing and ultimately commercial extraction. Further drilling will however be subject to additional funding being available.

Lithium in Granite

Cornish Lithium is also pleased to announce that it has commenced drilling 40 shallow test holes at a project site near St Austell. This project is focussed on the potential to extract lithium from granite rock at a location that is believed to have been mined for lithium during World War Two. This drilling programme builds on an extensive surface sampling programme undertaken by the company over the last few months. Initial results were highly encouraging and hence it was considered important to further assess the project using shallow test drilling. The drill programme will provide sufficient material for us to assess lithium content and mineral makeup as well as possible processing routes. Discussions have commenced with technology providers who can potentially extract lithium from such deposits using environmentally friendly techniques.

Mineral Rights Agreements

The Company continues to negotiate additional mineral rights agreements in Cornwall given our increasing understanding of the geology and the potential to extract lithium from geothermal waters. Sentiment towards a potential lithium industry in Cornwall remains overwhelmingly positive given the opportunity to create new employment in the region and to attract other battery related industries.

Information Technology

Cornish Lithium continues to collect historic data from various sources and to incorporate such data in our sub-surface digital models. Given the increasing size of these models and the processing power needed to render them in 3D, the Company recently invested in a very powerful computer with suitable graphics and processing capabilities. It is expected that this technology will significantly reduce the time taken to build our models and thus to improve our drill targeting capabilities. We consider that a significant portion of the value of Cornish Lithium now resides in the intellectual property associated with our data and our ability to integrate such data into geological models. Such work provides invaluable data for our own drilling programmes but also for possible opportunities where we can bring in joint venture partners.

Government Interaction

The increasing threat of climate change has engendered a rapid response in Europe with the EU pledging €1 trillion to decarbonise the economy and to establish a sustainable EV industry and associated supply chain. The EU has also pledged €3.2bn of public support from seven member states for a “pan-European research and innovation project in all segments of the battery value chain.” The EU is acutely aware that a secure and ethical supply of vital battery metals such as lithium is key to a sustainable decarbonised economy. Given the UK departure from the EU, funding from Europe is no longer available to UK businesses. It is therefore incumbent on the British Government to encourage innovation in the battery supply chain, especially given that the UK is hosting the 2020 UN Climate Change Conference in November this year. A recent article in the Financial Times noted: “While it is not up to governments to find the technologies to decarbonise the world, it is up to them to incentivise their development.” Cornish Lithium is pleased to have been invited for talks with various government bodies regarding a possible lithium supply chain in Cornwall. Such a new industry would also meet other government objectives such as “levelling up” disadvantaged areas outside London.


We are delighted that one of our Senior Geologists, Lucy Crane, won the 2019 “Rising Star in Mining Award” at the prestigious Mines & Money Conference, which was held in London at the end of November. Lucy also successfully completed a TEDx talk on the importance of metals to modern day life and technology. ( Link here )


Given the early stage success of our current drilling programmes, the company wishes to rapidly progress towards commercial testing of our current samples and, to this end, hopes to have a pilot extraction plant in operation – possibly before  the end of this year. The Company also wishes to drill further test holes in other areas of Cornwall to ascertain the optimal position of a commercial lithium extraction plant and to test the potential over a wider area. Such work will inform decisions regarding a full-scale extraction plant which could be built in conjunction with commercial partners. Given recent discussions it may be possible to build such a plant more quickly and cheaply than previously envisaged. This work represents a considerable acceleration of our intended programme and will therefore require further funding from our shareholders, the UK government, or both. Cornish Lithium would be very grateful for any indications from shareholders regarding whether they wish to participate should we raise further funds.

I hope that you will agree that we have made significant progress in the short time since securing funding. The profile of our project is growing both nationally and internationally and there is growing recognition that new sources of lithium are desperately needed if the transition to low carbon energy is to be accomplished. This is particularly true in the UK, given government aspirations to be leaders in the race towards electric vehicles and power storage batteries as part of the national commitment to bring all greenhouse gas emissions to net zero by 2050.

All shareholders are welcome to contact me if there are matters you wish to discuss in more detail.

Yours sincerely,

Jeremy Wrathall

Founder & CEO – Cornish Lithium Ltd.

[email protected]

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