Lithium Developer Lepidico Poised to Start Construction of Sustainable Lithium Project

• Lepidico is an ASX-listed lithium development company specializing in sustainable lithium microprocessing.
• They have spent a decade developing hydrometallurgical processes to extract lithium and other metals from lithium Mica minerals, differentiating them from roasting methods.
• Lepidico has obtained permits in Namibia and is building a downstream chemical conversion plant in Abu Dhabi.
• Their sustainability efforts include low greenhouse gas emissions, community support, and CSR programs, and they are actively exploring additional sites for future expansion.

About Lepidico

Western Australian-based Lepidico Ltd (ASX:LPD) is poised to start construction of its innovative and sustainable lithium project after successfully completing a definitive feasibility study, securing offtake agreements, and gaining all necessary permits. With financing expected to be secured this year, Lepidico could be producing battery-grade lithium chemicals by 2026 to meet surging demand from the electric vehicle market.

Sustainable Lithium Extraction Process Differentiates Lepidico

What sets Lepidico apart from other lithium developers is its proprietary L-Max and LOH-Max technologies that allow lithium and other valuable byproducts to be extracted from lithium micas in a sustainable, low-cost manner. Unlike conventional processing which uses high temperature roasting, Lepidico's hydrometallurgical process operates at just 120°C and atmospheric pressure. This results in lower energy use, reduced greenhouse gas emissions, and eliminates solid waste products.

The company has tested its process on 20 different lithium micas worldwide with great success. Lepidico is initially focused on redeveloping the historical Karibib lithium mica mine in central Namibia. An existing mineral reserve of 9.5 million tonnes at 0.43% Li2O puts Karibib among the top five lithium mica deposits globally. Lepidico will mine the near surface deposit via conventional open pit methods before concentrating the ore on site through flotation. The resulting lithium mica concentrate averaging 3.5% Li2O will then be trucked to the coastal port of Walvis Bay for export.

Fully Permitted Chemical Plant in UAE's Industrial Hub

Rather than build a chemical plant in Namibia, Lepidico has secured a 25-year land lease agreement within the Khalifa Industrial Zone (KIZAD) in Abu Dhabi. This provides close proximity to key raw materials like sulfuric acid as well as inexpensive gas-fired power. The Abu Dhabi plant has been designed to process 60,000 tonnes per annum (tpa) of lithium mica concentrate from Namibia using the L-Max and LOH-Max processes to produce 5,000 tpa lithium hydroxide. No corporate taxes and low export duties make the UAE an ideal location. The US$207 million chemical plant has been fully permitted by local authorities and is now construction ready.

Strong Financial Returns from Integrated Project

Lepidico has completed a definitive feasibility study on the integrated Namibian mine and UAE chemical plant which demonstrates exceptional financial metrics. At current lithium prices, the US$266 million Phase 1 project could achieve payback within 3 years and generate an after-tax IRR of 42%. This is based on a 19-year initial life of mine but resource expansion drilling is already underway. The Phase 1 plant could also be doubled in capacity with only modest additional capital.

Offtakes and Financing Deals to Trigger Construction

With the Phase 1 feasibility study and engineering work complete, Lepidico's focus is now on securing finance. The company has signed an offtake agreement with global trading company Traxys for the supply of up to 10,000 tpa of lithium hydroxide from the UAE plant. Further strategic offtake agreements are being negotiated. Debt financing discussions are also progressing well. Successfully securing funding in 2023 will enable Lepidico to immediately commence detailed engineering, place deposits on long lead-time equipment, award construction contracts and start development activities in Namibia.

First Production Targeted for Late 2025

Subject to financing, Lepidico aims to start construction in 2H 2023 with mining operations commencing at Karibib by mid-2025. Mechanical completion and commissioning of the UAE chemical plant is scheduled for end 2025 with commercial production from March 2026. Once ramped up, the Phase 1 project could generate annual EBITDA of up to US$100 million based on current lithium prices. This would position Lepidico strongly to fund expansion plans.

Sustainability and Community Initiatives

Lepidico aims to develop Karibib sustainably and has partnered with local communities. The company donated funds to build a maternity ward at a nearby hospital which has already assisted with lifesaving childbirths. Lepidico also has an all-Namibian management team and is focused on providing training and employment opportunities. The Phase 1 project is forecast to create over 300 permanent jobs once operational. Lepidico is also evaluating a switch to renewable power at the UAE plant to further reduce emissions.

Significant Growth Potential

Lepidico has substantial growth prospects well beyond its initial Phase 1 development. Exploration drilling within the Karibib license aims to expand resources and mine life. The company is also assessing sites globally for a potential Phase 2 expansion of up to 15,000-20,000 tpa lithium hydroxide. Lepidico's L-Max process has successfully processed many different lithium micas worldwide, providing feedstock flexibility for future projects. Furthermore, the Phase 1 Namibian mine and UAE plant could also be readily doubled in capacity to meet rising lithium demand.

With its innovative lithium extraction process, strategic UAE plant location, advanced project status and exploration upside, Lepidico represents an attractive investment opportunity in the fast-growing lithium sector. Successfully closing project financing in 2023 could see Lepidico become a mid-tier, low-cost and sustainable lithium producer by 2026.

Reasons why Lepidico could be a good investment opportunity for investors:

• Innovative extraction technology - Lepidico's proprietary L-Max and LOH-Max processes allow lithium and byproducts to be sustainably extracted from lithium micas at low cost. This provides a competitive advantage.
• Strategic project locations - The Namibian mine gives access to a top quality lithium mica deposit. The UAE plant location provides key advantages like low-cost power, sulfuric acid feedstock, and no taxes.
• Strong financial returns - The Phase 1 project has an exceptionally high after-tax IRR of 42% and could achieve payback in just 3 years at current lithium prices. This indicates potential for strong shareholder returns.
• Advanced project status - With completed feasibility study, offtake deals, and permits in place, Lepidico is poised to move immediately into construction once financing is secured. This derisks the project timeline.
• Exploration upside - Resource expansion drilling at Karibib aims to increase the current 19-year mine life. Significant growth potential exists through further global deposits.
• Strategic partnerships - The offtake agreement with Traxys provides Lepidico with a major global partner to support development. Further deals add credibility.
• Surging lithium demand - Forecast growth in electric vehicles ensures strong lithium demand/pricing outlook. Lepidico is timed to start producing when supply shortfalls emerge.
• Potential to fund expansions - The Phase 1 project's forecast strong cash flows positions Lepidico well to fund future expansions from internal sources.

In summary, Lepidico offers investors exposure to an advanced, low-cost and sustainable lithium project that is strategically positioned to capitalize on surging lithium demand from the EV revolution.