Lepidico (ASX:LPD) - Managing Director, Joe Walsh
Managing Director, Joe Walsh
Source: Lepidico
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  • Lepidico (LPD) flags progress at its Karibib project in Namibia despite some COVID-19-related setbacks in its quarterly report for the three months to the end of December 2021
  • The lithium specialist says front end engineering and design (FEED) work for the Karibib concentrator progressed in the December quarter and was completed in January
  • Lepidico spent $3.2 million on operating and exploration work over the quarter and ended December with roughly $15 million in available funds
  • Looking ahead, Lepidico says it expects lithium prices to rise during the March quarter of 2022 and remain strong for the rest of the year
  • Shares in Lepidico are up 5.26 per cent and trading at 4 cents each this morning

Lepidico (LPD) shares have risen in early trading action following the release of the company’s quarterly report for the three months to the end of December 2021.

The lithium specialist said its flagship Karibib project in Namibia remained open for the entire quarter despite some COVID-19-related setbacks, with work-from-home arrangements and a high vaccination rate among staff minimising disruptions.

Moreover, with international travel beginning to reopen in many key jurisdictions, Lepidico said it made “good progress” on all key first-phase workstreams at the lithium project.

The company said front end engineering and design (FEED) work for the Karibib concentrator progressed in the December quarter and was completed in January. This FEED work is now under review by the company.

Meanwhile, the company has resumed drilling work at the project as it works to expand Karibib’s mineral resource base.

The Karibib project currently has a mineral resource estimate of 11.24 million tonnes at 0.43 per cent lithium oxide. Importantly, almost all of the mineable material at the project is contained within lepidolite and other key lithium minerals that allow for Lepidico’s unique low-emissions L-Max and LOH-Max processing methods.

Looking at Lepidico’s financials, the company spent just over $3.2 million on operating and exploration work, with its only cash inflows for the quarter coming from the exercise of around $1.8 million worth of options.

The company ended December with roughly $10.4 million in cash in the bank and $4.6 million in finance facilities, meaning Lepidico had around $15 million in total funding remaining as it entered the new year.

At its current rate of cash burn, this gives Lepidico just over a year left of available funds before it will need to raise some fresh capital.

What’s next for LPD?

Looking ahead, Lepidico was relatively bullish on the future price of lithium, claiming tightening supply-demand fundamentals for the lithium industry has transitioned the market into a fundamental supply deficit.

Lepidico said according to Benchmark Mineral Intelligence (BMI), the price forecast for lithium has been revised upwards “significantly” for the first quarter of 2022, with “little chance of a balanced market within the next few years”.

This has enhanced the economics of Lepidico’s first-phase definitive feasibility study (DFS) assumptions for its key project.

In any case, Lepidico managed to strike an offtake deal with Traxys Europe during the December quarter for 100 per cent of the production of lithium hydroxide from its planned first-phase project. This amounts to 5000 tonnes per annum of lithium hydroxide.

As for the company’s Perth pilot plant for its lithium processing methods, Lepidico said a new LOH-Max circuit was in the advanced stages of construction and on schedule for commissioning in early February 2022.

Shares in Lepidico were up 5.26 per cent and trading at four cents each at 11:16 am AEDT. The company has a $236.5 million market cap.

LPD by the numbers
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