Currency in AUD
Last close As at 09/06/2023
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Market capitalisation
AUD208m
Research: Metals & Mining
Lithium Power International (LPI) has announced that optimisations to the production process introduced in the updated definitive feasibility study (DFS) at its Maricunga lithium project resulted in battery grade lithium carbonate whose purity exceeded industry standards. LPI now plans to send these carbonate samples to potential off-takers as part of the ongoing project finance process.
Lithium Power International |
Carbonate purity above industry standards |
Project update |
Metals and mining |
21 November 2022 |
Share price performance Business description
Analyst
Lithium Power International is a research client of Edison Investment Research Limited |
Lithium Power International (LPI) has announced that optimisations to the production process introduced in the updated definitive feasibility study (DFS) at its Maricunga lithium project resulted in battery grade lithium carbonate whose purity exceeded industry standards. LPI now plans to send these carbonate samples to potential off-takers as part of the ongoing project finance process.
Year end |
Revenue |
PBT* (A$m) |
EPS* |
DPS |
P/E |
Yield |
06/20 |
0.0 |
(12.7) |
(4.9) |
0.0 |
N/A |
N/A |
06/21 |
0.0 |
(6.0) |
(2.2) |
0.0 |
N/A |
N/A |
06/22 |
0.0 |
(12.6) |
(3.7) |
0.0 |
N/A |
N/A |
06/23e |
0.0 |
(3.3) |
(0.7) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are from continuing operations, normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
As LPI announced in April, its technological partner GEA Messo has undertaken additional testing of Maricunga’s concentrated brines at the independent certified laboratory. As a result of production process optimisations introduced as part of the project’s updated DFS (released in January 2022), LPI reported that samples of Maricunga’s concentrated brine consistently produced battery-grade lithium carbonate with 99.92% purity. This is significantly above the industry standard of 99.5% for battery-grade carbonate. In addition, the purity after loss of ignition was reported at 99.7%.
At the conference call held after the test results announcement, management reported that Mitsui has completed its due diligence process and the companies are discussing the terms that could lay the foundation for a definitive agreement. At the same time, several unsolicited approaches that LPI has recently disclosed continue to progress and the company aims to update the market in the next 60–90 days. It was also reported that LPI remains in contact with Codelco, which has recently been undertaking some exploration work at its part of the Maricunga salar (using LPI’s exploration camp).
After the recently oversubscribed equity placement that raised A$25m in gross proceeds, LPI is well capitalised, with a cash balance of A$26.5m at end-September 2022. We maintain our cash flow-based valuation of the company at A$1.24/share, on a diluted basis. Overall, despite the near-term economic weakness, electric vehicle demand continues to grow (H122 global battery electric vehicle and plug-in hybrid electric vehicle sales up 62%, source: ev-volumes.com) at the expense of internal combustion engines (diesel in particular), and the longer-term industry fundamentals remain intact, underpinned by ambitious global climate and decarbonisation targets. Supported by supply shortages, cost inflation and project delays, lithium prices are set to remain elevated to incentivise new supply. We believe the lithium market backdrop remains favourable for producers and advanced developers like LPI.
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Research: TMT
Ensurge Micropower’s CEO took the opportunity in the recent Q322 results presentation to brief investors on the progress made delivering samples of complete packaged microbatteries to customers as well as sample unit cells to strategic partners. Management anticipates commercial production starting at the end of Q422 to fulfil customer demand in Q123.
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