Lepidico

AU: LPD

Market CapAU$65.2m

Last Close AU$0.01

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.

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Investment summary

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 development activities for the Phase 1 project in order to keep it on schedule for mining to start in Q3 CY22 and chemical plant commissioning in Q1 CY23 – thereby positioning Lepidico to take advantage of improving lithium market fundamentals – and also to start work on a full-scale 20,000tpa LCE Phase 2 plant.

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 4.1 1.1 (0.4) 0.0 N/A 20.9
2022E 0.0 (25.6) (26.7) 0.0 N/A N/A
Industry outlook

The DFS calculated a project NPV of US$221m at an 8% discount rate and a 31% IRR after initial capex of US$139m. Since then, Lepidico has advanced the project to development status by awarding an EPCM contract to Lycopodium, concluding offtake agreements with BJR and Bisley and (effectively) completing the permitting and approvals process. It is currently in the process of raising A$9.6m via a 1 for 7 entitlement/rights issue, prior to which we calculated a value for the shares of A$0.0476/share. The US DFC is also evaluating the project for potential preferential debt financing.

Last updated on 21/06/2021
Content on Lepidico
Lepidico – Phase 2 coming into view
Metals & mining | Update | 18 June 2021
Lepidico – Fine tuning the mine and chemical plant
Metals & mining | Update | 21 April 2021
Lepidico – Convertible bond acquired with DLI fully retired
Metals & mining | Update | 8 December 2020
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Sector
Metals & mining
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Share price graph
Balance sheet
Forecast net cash (A$m) 17.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (15.4) (57.7) 37.5
Relative* (17.9) (60.7) 11.3
52-week high/low A$0.0/A$0.0
*% relative to local index
Key management
Joe Walsh CEO
Shontel Norgate CFO