Lepidico - Big swings and small roundabouts
While lithium had a relatively poor coronavirus in terms of its price performance relative to other metals, the speed of its catch-up post-crisis has been striking. The price has doubled since August and there is near-universal consensus that the market will remain in deficit (barring the extraordinary) for the remainder of the decade. This note updates our valuation and forecasts for Lepidico to reflect a 19.3% increase in our long-term lithium hydroxide price assumption to a still relatively conservative US$18,000/t, which more than offsets the effects of some of the delays (eg slow assay turnaround times) that the company is experiencing.Lepidico is engaged in mineral exploration and the development and licensing of L-Max® technology. Co.'s lithium portfolio of exploration and commercial ventures include the Lemare project in Canada; the Euriowie project near Broken Hill in New South Wales, Australia; Third Element Metals Pty Ltd, a joint venture in Brazil; a joint venture in Argentina; and L-Max® licence arrangements with Lithium Australia Ltd. and European Metals Holdings Limited. Co. also retains its interest in the East Pilbara Polymetallic project, which is located in the East Pilbara region of Western Australia. The L-Max® process allows the extraction and recovery of lithium from lithium bearing micas.
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