Lithium Power International (LPI) - My Top Pick of the Next Generation of Potential Lithium Brine Producers
The Maricunga Lithium Brine Resource in Chile
What I have learned from investing in the resources sector over many decades is that the better quality the resource is in terms of grade and size, the better chance it will be developed and make a profit for the company and its shareholders. The reason I have selected LPI as my top lithium stock is for that very reason.
It has a large (2.15 million tonnes of lithium carbonate equivalent with significant potential to double in size to 4-5 million tonnes) very high grade (1160mg/l Li & 8500mg/l K - the highest grade undeveloped lithium brine resource by a long, long way) resource and high lithium brine flow rates. LPI's preliminary economic assessment shows that Maricunga will sit at the bottom of the lithium (brine and hard rock) cost curve.
IT IS WITHOUT QUESTION THE BEST UNDEVELOPED LITHIUM BRINE RESOURCE OUT THERE.
Production of Battery Grade Lithium Carbonate Equivalent
LPI, through its contractor companies, has been successful in producing battery grade lithium carbonate (BG LCE) consistent with that produced by the world's two largest lithium producers, Albemarle and SQM. In fact LPI has achieved a slightly higher grade with optimisation of grade and process cost ongoing. Production of lithium carbonate samples leaves LPI well positioned for discussions with potential off-take partners and financiers.
Immediate Forward Milestones on Development of LPI's Maricunga Lithium Project - Initial Plant Configuration to Produce 20,000 tonnes of BG LCE Per Annum
LPI's accelerated take-up of its 50% equity position in the Maricunga project and its success in producing BG LCE has precipitated a fast-tracking of the project.
1. The Maricunga Environmental Impact Statement (EIS) will be lodged with government authorities by the end of next month - the newly elected Chilean Government has a strong economic agenda with a pro-investment focus. Also, it is expected to streamline in a responsible manner, the current project approvals process.
2. Discussions with potential offtakers / financiers will be ongoing - it is anticipated that end users / offtakers will finance construction of the project which means no dilution for LPI shareholders. LPI's current register is one of the smallest of all lithium hopefuls - currently there are 261 million shares issued for a current market capitalisation of AUD$121 milion. There is enormous upside for LPI's market cap over the next two years. LPI has nearly AUD$40 million in its and the Maricunga JV bank accounts.
3. WorleyParsons will complete the Definitive Feasibility Study (DFS) in Q3 2018.
4. Chinese conglomerate Fulin Group, through Maricunga joint venture partner MSB, has already conducted due diligence on the Maricunga Project with a view to potential investment/offtake arrangements. Any investment by Fulin would not be at the expense of LPI's equity and it is also anticipated that LPI will increase its stake in the Maricunga project at a later stage.
I consider LPI to be a high quality gem amongst plenty of lithium fool's gold. The potential upside for this stock is enormous.
