Fundamentals

Lithium Power International Fundamentals

A lot of good information throughout all the threads on the LPI Forum but thought maybe beneficial to try to amalgamate key information like I do on other stocks, Remember DYOR, Confirm always and feel free to add things I’ve missed. The following is a part of basically why I think this could be one of the best multi-bag potentials out there right now, it has the metrics and capacity to compete with the 5 – 6 major Lithium productions companies (All of which have multi-billion dollar Market Caps – Ours is currently around 70million). Timing seems close for a re-rate with churn of de-escrowed shares

Financials (as at 30 June 18)

Cash – Circa AU$30.00m (AU$23.38m in Company accounts, US$4.95m under JV)
Debt – nil
Shares on Issue – 260.7m Fulls, 34.5m Listed options, 40m Unlisted options

Latest 3b; https://www.asx.com.au/asxpdf/20180626/pdf/43w21wzmpyhhsw.pdf

Projects and Metrics

Maricunga Project

The Maricunga Lithium Project is operated under the JV Company Minera Salar Blanco (MSB). LPI owns a 50% stake in MSB with recent agreement to extend to 51%.

The Project is located in northern Chile, amongst the largest and highest-grade lithium brine mines in the “Lithium Triangle”. Projects in this part of the world offer the lowest cost lithium production. The Project is regarded as one of the highest quality pre-production lithium brine projects globally. Drilling in 2016–17 expanded the project’s global resource across the properties to 2.15 Mt LCE to a depth of 200m, with potential for significant depth extension of the lithium resource.

Lithium carbonate process concept proofing was carried out by two major global equipment manufacturers and developers, GEA in Germany and Veolia in the US. Both companies independently produced lithium carbonate that met battery grade specifications with up to 99.9% purity. This work confirmed the lithium production process designed by MSB.

MSB is now in the process of applying for a CEOL, which is due to be submitted in August. This permit, once approved and subject to EIA approval, is the final step required to commence the production of lithium under the present Chilean legislation.
This process is in addition to the Chilean Nuclear Commission (“CCHEN” permit granted in the beginning of March this year for a period of 30 years over the company’s old coded mining concessions. A CEOL is not required for the exploitation of these concessions.

The project EIA is very close to completion and is undergoing internal final review by MSB prior to submission during 3Q18. This will be a very important milestone for the project, with work being carried out by international engineering company MWH.

Key Metrics can be seen in the following tables. An in-depth analysis of the project can be seen through the PEA here; https://lithiumpowerinternational.com/wp-content/uploads/2017/12/209020-00049-F1-GE-TEN-0001_0-v.pdf









Opinion

I have been watching this company for quite some time, particularly because of the Maricunga project. The project Economics and Resource is incredible IMO. Add to that the Production Technology is proven/tried and true from other Salars within the Atacama region. Our tenements are adjoining to SQMs and Codelcos - This in itself is a major derisking point as those companies (SQM in particular) are the golden standard in Lithium Production. If SQM has land next to us then you already know it is a very strategic Salar. Grades as high at 1647mg/L of Lithium are world class and with the MSB process concept proven to 99.9% battery grade and exceptional PEA economics it tells me there is a lot of money to be made from Maricunga. Even without going to production the tenement value is extremely high which has been shown with recent GXY and SQM commercial agreements.

Question is why is LPI sitting at a 70m MC when imo even with the Lithium correction this year it should be sitting at +200m? I believe the escrowed shares released in June is the biggest reason, they always have a dragging effect until sufficient churn has occurred. After looking at trade history I believe we are almost through that churn and timing could be perfect with EIA, COEL and particularly DFS .

In short – I see upside bags from an M&A event on LPI or Many upside bags over a production timeframe (Approvals, DFS, Investment go-ahead, Major Offtakes, prepayments, strategic investment etc). I have made an investment accordingly.




More to come on the fundamentals, just laying out draft thoughts for now

GL