Lepidico

ASX: LPD

Market CapAU$156m

Last Close AU$0.02

Via its Karibib project in Namibia and unique IP, Lepidico is a vertically integrated lithium development business that has produced both lithium carbonate and lithium hydroxide from non-traditional hard rock lithium-bearing minerals using its registered L-Max and LOH-Max processes.

Investment summary

Lepidico’s (LPD’s) patented technologies produce lithium hydroxide (plus by-products) in an eco-friendly way from less contested minerals (eg lepidolite). In May 2020 LPD announced a definitive feasibility study on its Karibib project showing an NPV(8%) of US$221m (A$0.049/share) and an IRR of 31% from the production of 4,900tpa battery grade lithium hydroxide (7,060tpa lithium carbonate equivalent, LCE, including by-products) over 14 years.

Y/E Jun	Revenue (A$m)	EBITDA (A$m)	PBT (A$m)	P/E (x)	P/CF (x)
2021A	4.1	0.7	(0.3)	N/A	100.6
2022A	0.0	(4.8)	(7.9)	N/A	N/A
2023E	0.0	(3.1)	(3.6)	N/A	N/A
2024E	0.0	(6.8)	(17.5)	N/A	N/A

Industry outlook

Since then, LPD has completed the permitting and approvals processes for construction, awarded two EPCM contracts to Lycopodium, received great results from its resource expansion programme aimed at extending the mine life to >20 years, completed pilot plant trials and made key personnel appointments ahead of a final investment decision in Q1 CY23. In August we valued LPD at A$0.0666/share plus a further 0.63–1.55c/share for a risk-adjusted 20,000tpa LCE Phase 2 plant. This month, an entitlement offer was issued to raise up to A$11.7m.

Last updated on 26/09/2022