Lepidico (ASX:LPD) - Managing Director, Joe Walsh
Managing Director, Joe Walsh
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  • Lepidico (LPD) secures a lithium hydroxide offtake agreement with European raw materials company, Traxys
  • Under the seven-year deal, LPD will supply all production from its planned phase one project, with Traxys to provide sales-marketing, logistics and trade finance services
  • Traxys will also act as agent for 100 per cent of the production of caesium sulfate solution from the chemical plant
  • Both parties will collaborate on customer selection and development, and end-user contract terms
  • Shares ended 4.9 per cent lower on December 15 to trade at 3.9 cents each

Lepidico (LPD) has secured an offtake agreement with Traxys for lithium hydroxide from the company’s planned phase one project.

Traxys is a global company which focuses on financing, marketing, distribution and financial solutions for the mining, metals and minerals industries.

Based in Luxembourg it has over 20 locations worldwide and its Energy Metals business contains an established and actively growing lithium division.

Under the binding seven-year deal, Traxys is to act as principal and provide sales-marketing, logistics and trade finance services.

Traxys will also act as agent for 100 per cent of the production of caesium sulfate solution — 400 tonnes per year — from the chemical plant.

Specifically, the structure will see Traxys will act as principal to purchase and assume title and risk for delivery of lithium hydroxide and on-sell the products to end users.

It will manage the logistics of finished products, provide credit terms to end customers and a trade finance facility to Lepidico.

Moving forward, there is an option for the agreement to be expanded to other products manufactured by Lepidico by mutual agreement.

The companies will collaborate on customer selection and development, and end-user contract terms for lithium hydroxide and caesium sulfate.

According to Lepidico’s Managing Director Joe Walsh, the company is excited to be working with Traxys through an open, transparent and collaborative relationship.

“Traxys’ business provides an excellent fit with Lepidico’s target markets and the key
strategic products of lithium hydroxide and caesium sulfate,” Mr Walsh said.

“Traxys’ experience in the market development of critical minerals and relevant established customer relationships in the public and private sectors provides an excellent profile as a long-term partner for Lepidico.”

Most of the volumes sold to Traxys for on-sale to customers are set to be on a back-to-back contract basis, with pricing to be agreed with the end-user customer.

Lepidico said the revenues under the agreement are not expected to vary materially from the phase one project, definitive feasibility study.

Under the company’s marketing strategy, it plans to supply both battery supply chain customers and industrial market customers, with a proportion of spot market sales.

Through this approach, Lepidico said it will be able to manage the project ramp-up and product approval phases, market risk and establish a customer base that will support longer term growth plans for a phase two project.

Shares ended 4.9 per cent lower on December 15 to trade at 3.9 cents each.

LPD by the numbers
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