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Lithium Power International Limited (LPI:AX) (“LPI” or “the Company”) is pleased to provide shareholders with an overview of quarterly activities for the period ending 31 March 2022 (“Quarter”, “Reporting Period”), including subsequent events that might have a significant impact between 31 March 2022 and the date of issuance of this Report.
- Positive results delivered in the updated Definitive Feasibility Study for the Stage One Maricunga Lithium Brine project:
- Maricunga Stage One DFS delivers US$1.4B NPV (after tax) at an 8% discount rate, providing an IRR of 39.6% and a two-year payback. Average annual EBITDA of US$324M
- 15,200 tonnes per annum production of lithium carbonate (LCE) for 20 years with an exceptional ESG profile
- Operating cost (OPEX) of US$3,718 per tonne of LCE produced, placing the Stage One project in the lower quartile of LCE producers
- Project direct development cost estimated at US$419M, indirect costs at US$145M and contingency costs at US$62M to provide a total project CAPEX of US$626M
- Revised DFS completed by Tier-1 engineering consultancy Worley to international standards, with inputs from EPC contractors to provide greater certainty on cost estimates.
- Preliminary indications of interest received from international and Chilean financial institutions and private funds for debt financing and future equity financing of the project. LPI’s financial advisers, Canaccord and Treadstone, are assisting with this process.
- Updating of the EPC proposals has commenced by two selected international engineering firms, Worley and Bechtel, with a final Investment Decision expected in Q4 2022. Construction is likely to start immediately after.
- LPI to spin-out its Western Australian Greenbushes and Pilgangoora lithium assets during the next six months. These interests are held by a wholly owned subsidiary of LPI, DemergeCo, which will seek to list on the ASX as Western Lithium Limited subject to ASX, ATO and shareholder approval.
- LPI shareholders to receive DemergeCo shares on a pro rata basis via a capital reduction and in-specie distribution, subject to shareholder and regulatory approvals.
- At the Blackwood Prospect at Greenbushes, an initial Ground Penetrating Radar survey and further soil sampling has been completed.
- An updated Conservation Management Plan for additional sampling was approved at Blackwood by DBCA. Phase 1 and 2 of the detailed baseline flora and fauna assessments have been completed.
MARICUNGA – CHILE
STAGE ONE – DEFINITIVE FEASIBILITY STUDY
LPI provided details of the completed Definitive Feasibility Study (DFS) during the quarter for the Maricunga Stage One lithium brine project in northern Chile. The study confirms that the operation would be one of the world’s lowest-cost producers of lithium carbonate, along with a solid ESG strategy to support a sustainable future.
- The updated Maricunga Stage One Lithium Brine project’s Definitive Feasibility Study (DFS) supports 15,200 tonnes per annum production of lithium carbonate (LCE) for 20 years.
- Project NPV (leveraged basis) of US$1.425B (after tax) at 8% discount rate, providing an IRR of 39.6% and a two-year payback. Estimated steady-state annual EBITDA of US$324M.
- Project operating cost places Maricunga among the most efficient producers, with an estimated OPEX of US$3,718 per tonne not including credit from potassium chloride (KCl) by-product. KCI production was not considered in the DFS.
This article includes content from Lithium Power International, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.