reports
- Alison Turner
Lepidico - Development plan evolves
On 30 October, Lepidico announced the updated economics of its 2020 definitive feasibility study (DFS) on its integrated lithium hydroxide mine and chemical plant to show a base case NPV8 of US$457m post-tax, which equates to 9.4 Australian cents per share on a pre-funding basis. In our January 2019 report Gold stars and black holes, we calculated that companies with completed DFSs typically have an EV/NPV ratio of 30.9%, which would imply a pre-funding valuation for Lepidico of 2.9c/share, to w...
- Alison Turner
Lepidico - Everything moving all at once
Since our last note on the company, Lepidico has successfully completed extensive further pilot plant trials at larger scale, raised over A$19m in equity, updated and improved the economics of its Phase 1 Plant project and updated and upgraded its mineral resources (and reserves) at Helikon 4 and on surface (in the form of dumps etc) at both Rubicon and Helikon. This note updates our valuation of the company for all of these developments plus new lithium price assumptions (below).
- Alison Turner
Lepidico - Quantifying exploration’s dividends
Lepidico recently announced a series of impressive drill results at Helikon 4 (including 34.8m at 1.25% Li2O) that extend the zone of mineralisation there both down dip and along strike to the east towards Helikon 3 and Helikon 2. Drilling will continue, with a view to upgrading the mineral resource estimate at Karibib into the measured and indicated categories, which will form the basis of a new mine plan at Karibib, potentially extending the Phase 1 operating life of the project from 14 to 20 ...
- Alison Turner
Lepidico - Materially extended Phase 1 opportunity
On Friday 23 September, Lepidico announced a series of impressive drill results from Helikon 4 (including 34.8m at 1.25% Li2O) that extend the zone of mineralisation both down dip and along strike to the east towards Helikon 3 and Helikon 2. Drilling will continue, with a view to upgrading the mineral resource estimate at Karibib in October into the measured and indicated categories and thereby extend the Phase 1 operating life of the project from 14 to 20 years and potentially beyond. The upgra...
- Alison Turner
Lepidico - Coming in sight of the Rubicon
Lepidico is awaiting the delivery of Phase 1 control estimates from its EPCM contractor ahead of making a final investment decision (FID) on its Karibib integrated lithium mine and chemical plant project in September. Within this context, it has now almost completed the resourcing of its executive management team with four major recent appointments at a time when the price of lithium chemicals has continued to hover close to record highs (in sharp contrast to most other metals).
- Alison Turner
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 c...
- Alison Turner
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 c...
Lepidico Ltd: 1 director
A director at Lepidico Ltd sold 37,434,728 shares at 0.037AUD and the significance rating of the trade was 70/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly...
- Alison Turner
Lepidico - Binding offtake signed with Traxys
On 16 December, Lepidico announced a binding offtake agreement with world-renowned metal trader Traxys for 100% of its lithium hydroxide production for seven years (or 35,000t of LiOH) from its Phase 1 project. The agreement accommodates Lepidico’s marketing strategy of supplying both battery supply chain and industrial market customers in that it also allows the company to agree the sale of lithium chemicals to independent third parties, with Traxys administering any such sales by means of a ba...
- Alison Turner
Lepidico - Binding offtake signed with Traxys
On 16 December, Lepidico announced a binding offtake agreement with world-renowned metal trader Traxys for 100% of its lithium hydroxide production for seven years (or 35,000t of LiOH) from its Phase 1 project. The agreement accommodates Lepidico’s marketing strategy of supplying both battery supply chain and industrial market customers in that it also allows the company to agree the sale of lithium chemicals to independent third parties, with Traxys administering any such sales by means of a ba...
- Alison Turner
Lepidico - Phase 2 coming into view
On 15 June, Lepidico announced that its one for seven entitlement (rights) offer to raise A$9.6m had closed ‘significantly oversubscribed’ to the extent that the company had taken advantage of the strength in demand to place a further 223.1m shares (plus options) with investors to raise an additional A$2.9m. The funds raised will be used to generate product samples for a new prospective customer, with which negotiations are well advanced. They will also be applied to fast-track initial developme...
- Alison Turner
Lepidico - Fine tuning the mine and chemical plant
Lepidico’s announcement that it has raised capital and awarded the EPCM contract for its Phase 1 Plant project to Lycopodium follows on the heels of an offtake agreement with China’s BJR and comes barely a month after it announced an expansion of its resource base in Namibia. Relative to existing hard rock resources, the resource expansion quantified high grade surface material contained in tailings, stockpiles and dumps both at Rubicon and Helikon that could potentially support operations at Ka...
- Alison Turner
Lepidico - Convertible bond acquired with DLI fully retired
On 7 December, Lepidico announced that it had established a strategic collaboration with the UK’s Cornish Lithium (CLL, a private company) according to which it has granted CLL an exclusive licence over its L-Max and LOH-Max technologies (plus 100m options) for C$4.0m. Proceeds of the deal have allowed Lepidico to retire all of its convertible bond debt (see page six of our 5 November note Enter the US government), protecting shareholders from unnecessary convertible dilution, as well as confirm...
- Alison Turner
Lepidico - Enter the US government
On 28 October, Lepidico (LPD) announced that it had signed a formal mandate with the US International Development Finance Corporation (DFC) to undertake an in-depth analysis and evaluation of the Karibib Phase 1 (L Max/LOH-Max) project for the purpose of determining whether it qualifies for DFC debt-based financing. This entry of a US federal government institution into the development of Lepidico’s Phase 1 project is consistent with the former’s attempt to secure the future supply of up to 35 m...
- Alison Turner
Lepidico - Valuation update post-feasibility study
On 28 May, Lepidico (LPD) announced the results of its definitive feasibility study (DFS) on its integrated Karibib mining/chemical plant project to produce 4,900t of battery-grade lithium hydroxide (monohydrate) per annum plus a suite of high-value, Group 1 metal by-products over 14 years. The DFS calculated a project NPV8 of US$221m and an IRR of 31% after initial capex of US$139m (including a 13% contingency). C1 cash costs were estimated at US$1,656/t lithium carbonate equivalent (LCE) and a...
- Alison Turner
Lepidico - Developing to the (L-)Max
On 28 May, Lepidico (LPD) announced the results of its Association of the Advancement of Cost Engineering (AACE) class three (definitive) feasibility study (DFS) on its integrated Karibib mining/chemical plant project to produce 4,900tpa of battery grade lithium hydroxide (monohydrate) plus high value, Group 1 metal by-products over 14 years. At a lithium hydroxide price of US$13,669/t (cf US$10,350–11,200/t currently), the DFS calculated a project NPV8 of US$221m, or A$340m (A$0.066/share) an...
- Alison Turner
Lepidico - Valuation update pending feasibility study
In the last two months, Lepidico has announced an updated mineral resource at Karibib and first optimised production schedules for by-products. At nameplate capacity of 5,600tpa of lithium hydroxide monohydrate, Lepidico estimates sulphate of potash (SOP) production in excess of 11,000tpa, amorphous silica production in excess of 30,000tpa, caesium formate brine production of 210tpa and rubidium sulphate production of 1,400tpa. Although in some cases variable, these by-product tonnages are signi...
- Alison Turner
Lepidico - Caesing the opportunity
On 21 October, Lepidico announced that it had produced a high-specification sample of caesium-rubidium formate brine from its pilot plant, which employs its proprietary process technologies, including L-Max® (hereafter L-Max). The brine is reported to have low levels of deleterious elements and to meet key specification criteria for use in the oil and gas industry, where such solutions have properties suitably unique for use as completion fluids (see pages 3–4). Following its acquisition of D...
- Charles Gibson
Lepidico - Valuation update
In May, Lepidico (LPD) announced a trio of transformational initiatives. The first of these was an all-share offer to acquire Desert Lion (TSXV: DLI), according to which LPD will pay 5.4 shares for every one Desert Lion share. The second was a one-for-nine renounceable rights issue to raise up to A$10.8m via the issue of 372.9m new shares (plus warrants) at a price of A$0.029/share. The third was a supply and marketing alliance with Gulf Fluor for the supply of sulphuric acid, including the prov...
- Charles Gibson
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