Lepidico — Fine tuning the mine and chemical plant

Lepidico (ASX: LPD)

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Research: Metals & Mining

Lepidico — Fine tuning the mine and chemical plant

Lepidico’s announcement that it has raised capital and awarded the EPCM contract for its Phase 1 Plant project to Lycopodium follows on the heels of an offtake agreement with China’s BJR and comes barely a month after it announced an expansion of its resource base in Namibia. Relative to existing hard rock resources, the resource expansion quantified high grade surface material contained in tailings, stockpiles and dumps both at Rubicon and Helikon that could potentially support operations at Karibib for an additional two years. Just a year after completing its DFS, Lepidico has now transitioned its Phase 1 Plant project into development by effectively completing permitting and approvals processes at the same time as negotiating a first offtake agreement and raising initial equity to allow it to commit to early engineering works. Concurrently, it is advancing negotiations with the US government DFC (which is now conducting confirmatory due diligence) for the provision of project debt.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals & Mining

Lepidico

Fine tuning the mine and chemical plant

Corporate update

Metals & mining

21 April 2021

Price

A$0.020

Market cap

A$119m

A$1.2831/US$

Net debt (A$m pro-forma) at end-March 2021

4.4

Shares in issue*

5,187.9m

*Includes 96m shares (effectively) in Treasury

Free float

78%

Code

LPD

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(11.5)

(23.3)

191.1

Rel (local)

(15.5)

(25.8)

116.5

52-week high/low

A$0.03

A$0.01

Business description

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.

Next events

EPCM works commence

May 2021

Karibib site works commence

September 2021

Product offtake commitments

Q3CY21

Debt finance package

Q3CY21

Commencement of mining

Q3CY22

Analyst

Charles Gibson

+44 (0)20 3077 5724

Lepidico is a research client of Edison Investment Research Limited

Lepidico’s announcement that it has raised capital and awarded the EPCM contract for its Phase 1 Plant project to Lycopodium follows on the heels of an offtake agreement with China’s BJR and comes barely a month after it announced an expansion of its resource base in Namibia. Relative to existing hard rock resources, the resource expansion quantified high grade surface material contained in tailings, stockpiles and dumps both at Rubicon and Helikon that could potentially support operations at Karibib for an additional two years. Just a year after completing its DFS, Lepidico has now transitioned its Phase 1 Plant project into development by effectively completing permitting and approvals processes at the same time as negotiating a first offtake agreement and raising initial equity to allow it to commit to early engineering works. Concurrently, it is advancing negotiations with the US government DFC (which is now conducting confirmatory due diligence) for the provision of project debt.

Year end

Total revenues (A$m)

PBT
(A$m)

Cash from operations (A$m)

Net cash/(debt)*
(A$m)

Capex
(A$m)

06/19

0.0

(5.1)

(3.5)

10.4

(6.3)

06/20

0.0

(10.8)

(4.7)

(0.4)

(7.5)

06/21e

4.1

(0.4)

2.6

5.2

(1.2)

06/22e

0.0

(26.0)

(28.9)

(40.3)

(44.0)

Note: *Historical numbers include Desert Lion Energy convertible.

Evolving from Phase 1 to Phase 2

Lepidico’s March 2021 mineral resource expansion at Karibib marks the first step in a major new initiative to expand resources and reserves. The resource expansion strategy has two limbs, which will be conducted in parallel. For the Phase 1 plant, it will focus on near mine site evaluation at Rubicon and Helikon 1 to support an integrated mining and chemical plant project life of 20 years (cf 14 years currently). The second part of the strategy will focus on Helikon 2–5 and other lithium mineralised pegmatites yet to be drill tested, with the goal of delineating sufficient resources and reserves to support a Phase 2 plant (approximately four times the size of the Phase 1 plant) for 10–20 years.

Valuation: 4.76 Australian cents per share

Lepidico’s Phase 1 Plant project has been materially de-risked by its running of an earlier pilot plant campaign. Its Karibib mine in Namibia is now fully permitted, while its Abu Dhabi chemical plant is almost fully permitted. Having raised initial equity, it is now committing to Phase 1 development activities under its EPCM contract in order to keep the project on a fast track, in parallel with its funding and offtake workstreams and continual improvements in environmental and social performance (see page 4). In our last note on the company (Convertible bond acquired with DLI fully retired, published 8 December 2020), we calculated a value for Lepidico’s shares of 4.91c and this remains largely unchanged at 4.76c notwithstanding the intervening 5.3% appreciation of the Australian dollar. Note however that this valuation does not attribute any value to Lepidico from either a 20,000tpa Phase 2 plant or the supply of concentrate from any third-party sources or any other development options (eg third-party, technology licensing).

Developing on all fronts

Lepidico’s announcements that it has signed a non-binding letter of intent for lithium, caesium and rubidium offtake with China’s Hubei Baijierui Advanced Materials Corporation (BJR) and chosen Lycopodium as its consultant to complete the engineering, procurement and construction management (EPCM) of its integrated Phase 1 project come a month after it announced the expansion of its resource at Karibib in Namibia. Rather than the hard rock resource previously delineated (and the subject of an announcement by Lepidico on 30 January 2020 – see our note Valuation update pending feasibility study, published on 6 April 2020), the March 2021 resource expansion quantified material contained in tailings at Rubicon, stockpiles at Rubicon and Helikon and historical dumps at Rubicon. Full details of the expansion are included in Lepidico’s announcement; however, a summary of Karibib’s updated resource within the context of its pre-existing resource as well as the expansion is as follows:

Exhibit 1: Karibib mineral resource expansion cf pre-existing resources (100% basis)

Asset

Category

Cut-off grade

(%)

Tonnage

(kt)

Grade

(% Li2O)

Contained Li2O (t)

Contained LCE (t)

Average mining rate (ktpa)

Implied life (years)

Rubicon 1 and Helikon 1

Measured

0.15

2,200.0

0.57

12,428

30,732

588

3.7

Indicated

0.15

6,660.0

0.38

25,292

62,542

588

11.3

Inferred

0.15

170.0

0.70

1,190

2,943

588

0.3

Total

0.15

9,040.0

0.43

38,910

96,217

588

15.4

Helikon 2

Inferred

0.20

216.0

0.56

1,210

2,991

588

0.4

Helikon 3

Inferred

0.20

295.0

0.48

1,416

3,501

588

0.5

Helikon 4

Inferred

0.20

1,510.0

0.38

5,738

14,189

588

2.6

Helikon 5

Inferred

0.20

179.0

0.31

555

1,372

588

0.3

Total

Inferred

0.20

2,200.0

0.41

8,919

22,054

588

3.7

Total hard rock

Measured

0.15

2,200.0

0.56

12,428

30,732

588

3.7

Indicated

0.15

6,660.0

0.38

25,292

62,542

588

11.3

Inferred

2,370.0

0.43

10,109

24,996

588

4.0

Total

11,240.0

0.43

47,829

118,270

588

19.1

Surface material

Measured

0.00

0.0

0.00

0

0

588

0.0

Rubicon tailings

Indicated

0.00

71.0

0.99

703

1,738

588

0.1

Rubicon & Helikon stockpiles & Rubicon dumps

Inferred

0.00

570.1

0.79

4,495

11,114

588

1.0

Total

0.00

641.1

0.81

5,198

12,853

588

1.1

Grand total

Measured

2,200.0

0.57

12,428

30,732

588

3.7

Indicated

6,731.0

0.39

25,995

64,281

588

11.4

Inferred

2,940.1

0.50

14,603

36,110

588

5.0

Total

11,871.1

0.45

53,026

131,123

588

20.2

Change cf previous (units)

Surface material

Measured

0.0

0.00

0

0

588

0.0

Rubicon tailings

Indicated

8.8

0.02

100

247

588

0.0

Rubicon & Helikon stockpiles & Rubicon dumps

Inferred

562.9

-0.01

4,437

10,972

588

1.0

Total

571.7

-0.14

4,537

11,218

588

1.0

Change cf previous (%)

Surface material

Measured

N/A

N/A

N/A

N/A

Rubicon tailings

Indicated

14.2

2.1

16.5

16.5

Rubicon & Helikon stockpiles & Rubicon dumps

Inferred

7,817.5

-1.4

7,703.0

7,703.0

Total

823.7

-14.9

686.4

686.4

Source: Lepidico, Edison Investment Research. Note: LCE = lithium carbonate equivalent. Lepidico interest 80%.

The table above shows that the increase in the surface resource equates to approximately one to two years’ worth of mining and processing at average rates (assuming 100% conversion into reserves). However – unusually for surface material – the mineral resources added are of a relatively high grade. Coupled with its surface disposition, we would therefore expect there to be good potential to promote this material from resources to reserves – especially in the case of the stockpiles and dumps, which now account for 88.9% of the surface material delineated (by tonnage).

Currently, 74.3% of resources at Rubicon 1 and Helikon 1 convert into reserves, by tonnage, and 78.9% by lithium content. Hence the 15.4 years of life implied by the resource inventory at Rubicon 1 and Helicon 1 translate into 14 financial years of operational life at Karibib, including one part year of mining before processing commences and one year of processing after mining finishes. However, Lepidico is now targeting a 20-year mine life. At an average ore mining and processing rate of 588ktpa, this would imply reserves of 11,760kt (cf 6,720kt currently) and, pro rata with the existing reserves:resources conversion ratio of 74.3% (by tonnage), resources of 15,828kt (cf 11,871kt currently), as shown below:

Exhibit 2: Karibib reserve and resource increase required to support 20-year mine life

Existing (kt)

Required for 20-year mine life (kt)

Required increase (kt)

Required increase (%)

Reserves

6,720

11,760

+5,040

+75.0

Pre-existing resources*

11,299

15,828

+4,529

+40.1

Current resources

11,871

15,828

+3,957

+33.3

Source: Edison Investment Research. Note: *Prior to the resource expansion announced on 12 March 2021.

Lepidico’s mineral resource expansion announced on 12 March 2021 may therefore be interpreted as a first initiative within the context of the strategic objective to increase resources and reserves to the level required to support a 20-year mine life at Karibib.

Strategy

Pro rata to the existing reserve:resource conversion ratio at Rubicon 1 and Helikon 1 of 74.3% (by tonnage), Karibib’s existing resource of 11,871kt should support a reserve of 8,820kt which, in turn, should support mining and processing operations for 15 years (at average rates) once the required work has been completed (see Exhibit 1).

In order to achieve its targets, Lepidico has therefore adopted a two-pronged strategy:

to focus on near mine site evaluation at Rubicon and Helikon 1 in order to support a Phase 1 operating life extension to 20 years; and

to focus on Helikon 2–5 and other lithium mineralised pegmatites that have yet to be drill tested within Lepidico’s 64km2 prospecting licence area in order to support a Phase 2 plant with a life of 10–20 years.

Output from a Phase 2 plant could be in the order of 20,000tpa lithium monohydrate, which compares with an average 4,893tpa from the currently planned Phase 1 plant. Thus, Lepidico would be required to identify approximately twice as much material as would be required for the 20-year Phase 1 plant for a Phase 2 plant to operate for half the time (ie 10 years) or approximately four times as much material in order for a Phase 2 plant to operate over a similar 20-year lifespan.

It is intended that the two prongs of the strategy will be conducted in parallel.

Phase 2 plant location considerations

Given the precedent established by its Phase 1 plant project, with a mine in Namibia and a chemical plant in Abu Dhabi, an obvious location for Lepidico’s Phase 2 plant would be either Namibia or Abu Dhabi. However, the US has declared caesium and rubidium as well as lithium to be critical minerals, while Canada has declared caesium and lithium to be critical elements and the EU has recently added lithium to its list of critical raw materials. Together with industry’s focus on reducing supply chains, these strategic considerations on the part of the United States, the EU and Canada mean that any of these could also be viable locations for a Lepidico Phase 2 plant project with the Karibib mine considered to be a critical part of the strategic supply chain. While Namibia and Abu Dhabi will offer the benefit of the Phase 1 plant project precedent when it comes to developing a Phase 2 plant, the United States, the EU and Canada will offer the benefit of strategic and geographic diversification, along with shorter logistical routes. All of these considerations, among others (including governmental incentivisation), will be considered by Lepidico in a series of studies to ultimately determine the optimal location of a Phase 2 plant project in due course.

EPCM consultant assigned and early works begun

Lepidico’s Phase 1 Plant project is now fully permitted in Namibia and almost fully permitted in the United Arab Emirates (UAE). On 19 April – consistent with its timetable and stage of development – the company announced that it had agreed commercial terms with Lycopodium for the EPCM contract for the integrated project.

Lycopodium (LYL:AU, A$5.51) is a A$219.0m publicly listed and well established engineering consultant based in Perth, Western Australia, that was responsible for completing and delivering the design and engineering for both the pre-feasibility (PFS) and definitive feasibility studies (DFS) on the Phase 1 project to Lepidico in May 2020. In addition to its size and technical ability, Lycopodium was chosen by Lepidico as the lead engineering consultant on the basis that its prior involvement will make the project more readily acceptable to US debt financiers and thereby contribute to making it fully bankable.

The integrated EPCM contract will now be separated into two sub-contracts that meet country specific requirements separately for Namibia and the UAE. In the meantime however, early services engineering works and front-end engineering & design (FEED) is expected to commence in mid-May and thereby maintain Lepidico’s momentum towards:

commencing mining operations in Namibia in September 2022,

commissioning the Namibian concentrator before the end of CY22,

commissioning the UAE chemical plant in the first quarter of CY23, and

completing commissioning and ramping the integrated project up to full capacity in the remainder of CY23.

Marketing and offtake

Lepidico revealed on 13 April that it had signed a non-binding letter of intent to supply China’s BJR with lithium, caesium and rubidium salts from the Phase 1 plant for both industrial use and/or conversion into fine specialty chemicals. The announcement marks progress on the first of three marketing and sales initiatives by Lepidico to build a customer base for an expanding business with the objective of supporting longer-term growth (including, ultimately, a Phase 2 plant). The three initiatives – representing three different types of potential customers – are as follows:

Long-term, direct sales contracts with a major cathode manufacturer(s), supplying the lithium-ion battery manufacturing industry and thereby providing it with access and exposure to the electric vehicle (EV) sector.

Agency sales via a trading company. This would provide Lepidico with exposure to both the spot market and contract customers for its bulk chemicals output. Ideally, Lepidico’s counterparty would account for a substantial portion of its output and have global capability in both lithium hydroxide and potash, with sales directed towards Europe and the US in particular (thereby representing a US supply nexus to support the debt funding contemplated under LPD’s mandate with the US International Development Finance Corporation (DFC – see our note, Enter the US government, published on 5 November 2020).

The third source of Lepidico’s sales (as represented by BJR) is direct, industrial offtake. In this case, BJR operates three manufacturing sites in Hubei Province in China (capital Wuhan) and Lepidico will supply it with lithium hydroxide, caesium sulphate and rubidium sulphate for both industrial use and synthesis into fine specialty chemicals for both domestic and international customers.

Ongoing metallurgical process development

On 6 April, Lepidico announced that it had lodged a provisional patent application for the production of nominal battery grade specification lithium carbonate from a LOH-Max intermediate crude lithium hydroxide via the sequestration of carbon dioxide from the upstream L-Max process, followed by refining. The new process is designed so that it can be integrated with either L-Max and/or LOH-Max technology or, potentially, in the chemical conversion of spodumene concentrates. The significance of the process is that it:

materially reduces chemical plant carbon dioxide emissions by consuming c 25% of upstream emissions (or 0.6t CO2 per tonne of lithium carbonate produced) and recycling them into lithium carbonate production; and

creates the opportunity to produce either lithium hydroxide or lithium carbonate – depending on market conditions – from the same chemical conversion facility.

Apart from the need for carbon dioxide reticulation and gas sparges, both process flowsheets use similar equipment and it has been estimated that it will cost no more than US$1m in capital expenditure to retrofit the proposed Phase 1 chemical plant in Abu Dhabi with the required infrastructure to achieve this functionality from production year 2 of the project. In the meantime, Lepidico perceives that lower CO2 emissions from a process that is already relatively low in emissions will provide it with a competitive advantage in tendering to supply lithium chemicals to battery manufacturers. To this end, two further alternatives to minimise chemical plant CO2 emissions are being evaluated, namely:

the caustic scrubbing of surplus CO2 to produce sodium carbonate/bicarbonate (which is a fairly common industrial chemical used, among other applications, in conventional spodumene conversion); and

compression of the majority of CO2 emitted, with the surplus being directed to industrial use (NB the global commercial CO2 market was estimated to amount to 230Mtpa, or US$7.9bn, in 2020).

Financing

Concurrent with its technical and strategic announcements, Lepidico announced on 19 April that it has successfully raised A$2.925m (effectively) via the issue of 134.0m shares to Acuity Capital under the terms of the Controlled Placement Agreement (CPA) already in place between the two since December 2019. The shares had a deemed price of A$0.0218 representing an 8.0% discount to the 15-day volume-weighted average price immediately prior to their issuance. This issue reduces the number of collateral shares already issued to Acuity, but which Acuity would otherwise be required to return to Lepidico upon termination of the CPA, to 96.0m (from 230.0m, previously).

In the aftermath of this issue, we calculate that Lepidico has 5,091.9m shares in issue excluding the 96.0m returnable shares, deemed to be effectively ‘in Treasury’, and 5,187.9m including them. Given their returnable nature, Edison’s valuation of Lepidico below is conducted on the basis of a net 5,091.9m shares being in issue, currently. The balance may be assumed to be a constituent part of the A$27.5m equity fund-raising that we expect to be conducted by Lepidico (now assumed to be in the coming FY22 financial year) in order to achieve a peak leverage (net debt/[net debt+equity]) ratio of 66.0% on its Phase 1 Plant project in mid-FY23.

Valuation

Project

Lepidico’s DFS (see our note, Developing to the (L-)Max, published on 29 May 2020) calculated a project NPV8 for the integrated Karibib mining and chemical plant operation of US$221m, or A$284m (5.6c/share on the enlarged share base) at the current foreign exchange rate of A$1.2831/US$ (cf A$1.3511/US$ at the time of our last note in December 2020).

In our report Gold stars and black holes, we calculated a mean enterprise value (EV) for companies with projects at the definitive feasibility study (DFS) stage of development of 30.9% of project net present value (NPV) (ranging up to 133.5%). This alone would imply an immediate valuation for Lepidico of 1.7c/share, ranging up to 7.4c/share.

Company

Our valuation of Lepidico varies from our value of the integrated Karibib mining and chemical plant project in that it takes into account Lepidico’s 80% interest in the Namibian mine (but 100% of the Abu Dhabi chemical plant), which will give rise to both a tax paying position in Namibia and a minority interest in the profits generated from mining operations. It also assumes ongoing corporate costs in the order of A$3.1m pa. Hitherto, our company model has assumed that Lepidico will raise this equity at a price of 2.9c/share (as set out in our report Valuation update pending feasibility study, published on 6 April 2020). This price is at a 26.1% premium to the current share price of 2.3c. However, given that Lepidico’s shares have appreciated by 283.3% from their level of 0.6c in May 2020 and by 130.0% from their level of 1.0c in December 2020, we believe that a near-term share price of 2.9c is achievable, especially in the event of the successful conclusion of additional offtake negotiations and/or US DFC debt funding on preferential terms (see our note Enter the US government, published on 5 November 2020). In addition, management has indicated that it would be unlikely to commit to raising equity at much below this price. Hence, we continue to show the results of our analysis on this basis. However, we also show the results of the analysis with equity raisings conducted at a series of different prices in the ‘Future equity funding price’ section of the note, below.

In our last note on the company (see Convertible bond acquired with DLI fully retired, published 8 December 2020), we calculated a value for Lepidico’s shares of 4.65c plus 0.26c for the value of an envisaged loan to the minority shareholders in the upstream Namibian operation to give a total valuation for the company of 4.91c/share. We have now updated our valuation to take account of the following in our financial model:

interim results to end-December 2020;

an updated current and future FX rate of A$1.2831/US$ (cf A$1.3511/US$ previously and representing a 5.3% appreciation in the value of the Australian dollar relative to the US dollar); and

134.0m new, additional shares issued in FY21 with the balance of equity funding to now occur in FY22 (cf FY21 previously) in order to achieve a maximum peak leverage (net debt/[net debt+equity]) ratio of 66.0% in mid-FY23.

In the wake of these changes, our (discounted) valuation of Lepidico’s future (maximum potential) dividend stream to shareholders remains largely unchanged at 4.48c/share, as shown in the graph below:

Exhibit 3: Edison estimate of future Lepidico EPS and (maximum potential) DPS

Source: Edison Investment Research

To this valuation of 4.48c/share should then be added the value of Lepidico’s envisaged future loan to the minority shareholders in the Namibian mining and concentrating operation, which we estimate to be 0.29c/share to result in a total value for Lepidico’s shares of 4.76c/share (cf 4.91c/share previously), based solely on its Phase 1 project.

Future equity funding price

Our financial model assumes that Lepidico will raise A$27.5m in FY22 (cf A$37.8m in FY21 previously) at a share price of 2.9c in order to achieve an (unchanged) future, maximum net debt:equity ratio of 66:34. Exhibit 4 demonstrates the sensitivity of our valuation to variations in this price:

Exhibit 4: Lepidico valuation sensitivity to future equity funding price (Australian cents per share)

Equity funding price

1.50

1.75

2.00

2.30

2.50

2.90

3.00

3.50

4.00

4.50

5.00

5.09

Lepidico valuation

4.19

4.34

4.47

4.59

4.65

4.76

4.79

4.89

4.96

5.03

5.08

5.09

Source: Edison Investment Research

Exhibit 5: Financial summary

Accounts: IFRS, year end: June: A$000s

 

 

2015

2016

2017

2018

2019

2020

2021e

2022e

Income Statement

Total revenues

 

 

9

116

127

171

2

47

4,084

0

Cost of sales

 

 

0

0

0

0

0

0

0

(21,726)

Gross profit

 

 

9

116

127

171

2

47

4,084

(21,726)

SG&A (expenses)

 

 

(455)

(617)

(912)

(5,284)

(4,006)

(4,904)

(2,976)

(3,146)

Other income/(expense)

 

 

0

0

0

0

0

0

0

0

Exceptionals and adjustments

 

(16)

(415)

(878)

(2,171)

(1,150)

(2,740)

(338)

0

Depreciation and amortisation

 

(5)

(6)

(6)

(6)

(8)

(1,208)

(1,154)

(1,154)

Reported EBIT

 

(467)

(923)

(1,670)

(7,290)

(5,162)

(8,805)

(383)

(26,026)

Finance income/(expense)

 

(18)

(5)

128

70

57

17

0

26

Other income/(expense)

 

(559)

(448)

(3,815)

0

0

0

0

0

Exceptionals and adjustments

 

0

(888)

0

0

0

(2,026)

0

0

Reported PBT

 

 

(1,044)

(2,263)

(5,357)

(7,220)

(5,105)

(10,814)

(383)

(26,001)

Income tax expense (includes exceptionals)

 

 

0

0

0

0

0

696

151

0

Reported net income

 

 

(1,044)

(2,263)

(5,357)

(7,220)

(5,105)

(10,118)

(232)

(26,001)

Basic average number of shares, m

 

 

178

465

1,802

2,624

3,272

4,568

5,024

5,566

Basic EPS (c)

 

 

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

(0.0)

 

 

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

Property, plant and equipment

 

 

9

4

8

27

20

1,904

1,952

44,791

Goodwill

 

 

0

0

0

0

0

0

0

0

Intangible assets

 

 

0

16,204

16,698

19,027

22,925

23,870

22,627

22,627

Other non-current assets

 

 

1,485

715

1,620

730

27,469

42,798

42,798

42,798

Total non-current assets

 

 

1,494

16,922

18,326

19,783

50,414

68,573

67,377

110,216

Cash and equivalents

 

 

53

650

3,307

4,860

13,660

4,793

5,213

5,213

Inventories

 

 

0

0

0

0

0

0

0

0

Trade and other receivables

 

 

4

3,886

706

712

1,869

1,767

227

6,338

Other current assets

 

 

0

0

0

0

0

0

0

0

Total current assets

 

 

57

4,537

4,013

5,572

15,529

6,560

5,440

11,551

Non-current loans and borrowings

 

 

0

0

0

0

3,276

5,215

39

45,504

Other non-current liabilities

 

 

0

0

0

0

0

10,055

10,055

10,055

Total non-current liabilities

 

 

0

0

0

0

3,276

15,271

10,094

55,559

Trade and other payables

 

 

105

614

1,663

804

10,940

565

396

2,404

Current loans and borrowings

 

 

115

0

0

0

0

0

0

0

Other current liabilities

 

 

40

33

46

51

86

108

108

108

Total current liabilities

 

 

260

647

1,709

856

11,026

672

503

2,511

Equity attributable to company

 

 

1,292

20,812

20,630

24,500

53,252

52,404

55,533

57,010

Non-controlling interest

 

 

0

0

0

0

(1,610)

6,785

6,687

6,687

 

 

 

 

 

 

 

 

 

 

 

Cashflow statement

 

 

Profit for the year

 

 

(1,044)

(2,263)

(5,357)

(7,220)

(5,105)

(10,118)

(232)

(26,001)

Taxation expenses

 

 

0

0

0

0

0

(696)

(151)

0

Depreciation and amortisation

 

 

5

6

6

6

8

1,208

1,154

1,154

Share based payments

 

 

450

40

1,736

2,138

520

1,027

338

0

Other adjustments

 

 

(451)

1,036

(162)

2,066

664

4,716

0

0

Movements in working capital

 

 

(10)

132

133

(28)

410

(1,509)

1,371

(4,103)

Interest paid / received

 

 

0

0

0

0

0

0

0

0

Income taxes paid

 

 

0

0

0

0

0

696

151

0

Cash from operations (CFO)

 

 

(1,050)

(1,049)

(3,644)

(3,038)

(3,504)

(4,676)

2,631

(28,949)

Capex

 

 

(9)

(63)

(861)

(3,057)

(6,251)

(7,452)

(1,203)

(43,993)

Acquisitions & disposals net

 

 

0

32

122

110

0

416

1,244

0

Other investing activities

 

 

(563)

(80)

0

0

0

0

0

0

Cash used in investing activities (CFIA)

 

 

(572)

(111)

(739)

(2,947)

(6,251)

(7,036)

41

(43,993)

Net proceeds from issue of shares

 

 

1,505

1,872

7,040

7,555

18,462

3,523

2,925

27,477

Movements in debt

 

 

100

(115)

0

0

0

0

(5,176)

45,465

Other financing activities

 

 

0

0

0

0

0

0

0

0

Cash from financing activities (CFF)

 

 

1,605

1,757

7,040

7,555

18,462

3,523

(2,251)

72,942

Increase/(decrease) in cash and equivalents

 

 

(18)

597

2,657

1,570

8,707

(8,190)

420

0

Currency translation differences and other

 

 

0

0

0

(17)

93

(678)

0

0

Cash and equivalents at end of period

 

 

53

650

3,307

4,860

13,660

4,793

5,213

5,213

Net (debt) cash

 

 

(61)

650

3,307

4,860

10,385

(422)

5,174

(40,291)

Movement in net (debt) cash over period

 

 

(61)

711

2,657

1,553

5,525

(10,807)

5,597

(45,465)

Source: Company sources, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Lepidico and prepared and issued by Edison, in consideration of a fee payable by Lepidico. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Lepidico and prepared and issued by Edison, in consideration of a fee payable by Lepidico. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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