Lithium Power International

AU: LPI

Market CapAU$189m

Last Close AU$0.54

Lithium Power International’s main asset is its 51.6% interest in the Maricunga lithium brine project in Chile. Subject to securing a funding package, the first stage of the project is expected to produce 15.2ktpa of high-grade lithium carbonate starting from 2026. LPI also owns a number of early-stage exploration lithium projects in Western Australia.

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Investment summary

Lithium Power International’s (LPI’s) Q322 activities report suggests continued progress on its 52%-owned Maricunga lithium project in Chile. The company has also confirmed its plans to demerge its Western Australia (WA) lithium assets by the end of CY22. We have updated our estimates slightly to bring them in line with the reported cash spend. Our valuation increases to A$1.1/share, due to the implied lower forecast project equity dilution. The planned lithium assets spin-off should crystalise additional value for shareholders.

Y/E Dec
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (c)
P/E (x)
P/CF (x)
2020A 0.0 N/A (12.7) (4.94) N/A N/A
2021A 0.0 N/A (6.0) (2.16) N/A N/A
2022E 0.0 N/A (9.6) (2.52) N/A N/A
2023E 0.0 N/A (5.3) (1.45) N/A N/A
Industry outlook

The lithium market is transforming significantly due to explosive growth in e-mobility and energy storage. Given the shortage of development-stage lithium projects, the market is likely to remain in structural deficit at least over the next two to three years, which should support higher prices to incentivise new supply. After a period of market weakness in 2020–21 due to COVID-19, spot carbonate prices delivered to China have recently exceeded the US$50,000/t level. We conservatively model a contract carbonate price of US$23,000/t in 2022–24, falling to our long-term price assumption of US$17,000/t in 2027. This should continue to provide support to the shares of lithium explorers and developers.

Last updated on 24/05/2022
Content on Lithium Power International
Lithium Power International – Riding the lithium wave
Metals & mining | research Initiation | 21 March 2022
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Sector
Metals & mining
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Share price graph
Balance sheet
Forecast net cash (A$m) 9.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (36.1) 5.9 163.4
Relative* (32.7) 4.2 159.9
52-week high/low A$1.0/A$0.2
*% relative to local index
Key management
Cristobal Garcia-Huidobro CEO
Andrew Phillips CFO