Lepidico

AU: LPD

AU$119.3m market cap

AU$0.02 last close

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 a range of by-products from less contested minerals such as lepidolite. Both its Karibib operation in Namibia and its chemical plant in Abu Dhabi are now fully permitted. Technically, the project has been de-risked by a successful pilot plant campaign and, in May 2020, LPD announced the results of a definitive feasibility study (DFS) to produce c 4,900t of battery grade lithium hydroxide monohydrate pa (7,800tpa equivalent) over 14 years.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2019A 0.0 (4.0) (5.1) 0.0 N/A N/A
2020A 0.0 (4.9) (10.8) 0.0 N/A N/A
2021E 0.0 (3.1) (4.4) 0.0 N/A N/A
2022E 0.0 (26.0) (27.1) 0.0 N/A N/A
Industry outlook

The DFS calculated a project NPV of US$221m (US$0.045/share) at an 8% discount rate and a 31% IRR after initial capex of US$139m. Offtake discussions are underway and the US DFC has confirmed that it is evaluating the project for potential preferential debt financing. In the meantime, a strategic collaboration with Cornish Lithium has allowed LPD to fully retire its convertible bond such that we value the company at 4.91c if it now raises equity at 2.9c/share (or 4.50c at 1.9c/share).

Last updated on 13/04/2021
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Share price graph
Balance sheet
Forecast net cash (A$m) 36.3
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 4.5 35.3 94.1
Relative* 1.5 29.9 46.1
52-week high/low A$0.0/A$0.0
*% relative to local index
Key management
Joe Walsh CEO
Shontel Norgate CFO

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