Lepidico

AU: LPD

Market CapAU$176m

Last Close AU$0.03

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 patented technologies produce lithium hydroxide (plus by-products) in an eco-friendly fashion from less contested minerals such as lepidolite. In May 2020, it announced the results of a definitive feasibility study on its Namibian project, which showed an NPV(8%) of US$221m (A$0.05/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)
2019A	0.0	(5.2)	(5.1)	N/A	N/A
2020A	0.0	(7.6)	(10.8)	N/A	N/A
2021E	4.1	0.4	(0.3)	N/A	151.0
2022E	0.0	(3.1)	(3.8)	N/A	N/A

Industry outlook

Since then, Lepidico has completed the permitting and approvals processes for construction, awarded an EPCM contract to Lycopodium, converted its pilot plant to a demonstration one to reduce scale-up risk and made key personnel appointments. After increasing our long-term lithium price forecasts, we value Lepidico at 6.64c/share plus 0.73–1.77c/share for a risk-adjusted 20,000tpa LCE Phase 2 plant. In the meantime, the US International Development Finance Corporation is evaluating the project for preferential debt financing.

Last updated on 28/06/2022