Lithium Power International

Overview

Global electric vehicle (EV) sales doubled in 2021 reaching a total of 6.6 million according to the International Energy Agency report. This year, the total number of EVs on the road worldwide is 16.5 million and is expected to reach 145 million by 2030.

The rapid adoption of EVs around the world has propelled manufacturers to continue to advance battery technology and deploy charging networks, both of which require raw materials to manufacture.

Battery capacity and size are both increasing dramatically with new technological advancements. Along with the overall increased demand for EVs, new battery technology has led to ramped-up demand for the materials used in manufacturing them. In 2019, the material demand for batteries was 17 kilotons (kt) per year for lithium, which is projected to reach 185 kt per year by 2030. This dramatic explosion in demand represents a strong opportunity for businesses and investors alike.

Lithium Power International (ASX:LPI) is a pure-play lithium mining company focused on developing high-grade lithium assets in Chile and Australia. LPI’s 100-percent-owned flagship Blanco project, located in Maricunga, Chile, is the highest-quality pre-production lithium brine project in South America. Combined with two lithium projects in Western Australia, LPI is set to become a significant producer of high-quality lithium. Since Chile and Australia are the top two producers of lithium, LPI is poised for success.

The Maricunga project in Chile, also known as the Blanco project, was fully permitted by the Chilean authorities in 2020 after undergoing an environmental study. The project has been previously developed by Tier-1 companies, such as GEO, Stantec and Worley.

This fully permitted pre-construction-stage project is waiting for funding to be finalized and represents a strong opportunity for potential investors to be a part of this exciting lithium project, set to be the next lithium producer in Chile.

An in-depth feasibility study shows that the facilities have been designed to mine lithium at a rate of 20,000 TPY by processing concentrated lithium brine. LPI's definitive feasibility study (DFS) on the Maricunga Stage One confirmed that the project could be one of the world’s lowest-cost producers of lithium carbonate, with a solid ESG strategy to support a sustainable future. The DFS further supports 15,200 tonnes per annum production of lithium carbonate (LCE) for 20 years.

Latest optimizations introduced to the Maricunga lithium production process resulted in 99.92 percent purity battery-grade lithium carbonate produced from samples of concentrated brine. This significantly exceeds the industry standard of 99.5 percent specifications for battery-grade lithium carbonate.

LPI’s Australian projects represent an additional opportunity for growth. Australia has a strong battery-metals market with lithium being the most produced metal in the country. The Pilbara project and Greenbushes project both contain sources of high-quality lithium rock chips. While both projects are currently in the exploration and development stages, they represent an opportunity for additional growth for the company and its investors.

Company Highlights

• Lithium Power International is a pure-play lithium mining company with lithium projects located in Chile and Australia
• The Maricunga project, LPI’s flagship, has the potential to become Chile’s next high-grade lithium mine as it is located on Chile’s largest lithium brine deposit.
• Demand for lithium is already skyrocketing and is expected to exponentially increase alongside EV sales and the adoption of other green technologies.
• The company produced 99.92 percent purity battery-grade lithium carbonate from samples of concentrated brine as a result of the latest optimisations introduced to the Maricunga lithium production process.

Key Projects

Maricunga Project

Located in the Atacama Region of Chile, this project is located within the “Lithium Triangle” and is home to high-quality lithium brine deposits. The Maricunga project is the most advanced mining project in Chile, other than the mine expansions by Albemarle and SQM. It is located adjacent to the Chile-Argentina Highway 31 and has a 23kV power line that connects the project to the Chilean power grid. LPI has 51 percent ownership of the project and funding is being finalized for construction to commence in 2023.

A preliminary assessment and economic evaluation report on the in-depth explorative drilling that has already been conducted throughout the Atacama Region has verified the presence of high-grade lithium brine. The project is the second highest-grade lithium brine resource in South America at 1,167 mg/l lithium and 8,500 mg/l potassium.

In 2022, LPI released an updated DFS supporting an annual production of 15,200 tonnes of lithium carbonate (LCE) for 20 years. The study further confirms Maricunga’s potential to be one of the world’s lowest-cost producers of lithium carbonate with an opex of US$3,718 per tonne. The project’s capex is projected at US$626 million from an estimate of contingency costs at US$62 million, direct development cost at US$419 million and indirect costs at US$145 million. The Maricunga Stage One DFS delivers US$1.4B NPV (after tax) at an 8 percent discount rate, an IRR of 39.6 percent and a two-year payback period.

Greenbushes Project

This project is located in Western Australia and covers 315 square kilometers adjacent to the Greenbushes mine block owned by Talison. The project tenement has an approved program of works along with an environmental management plan. The laterite sampling conducted in the project’s area confirmed the existence of lithium.

Pilbara Project

Located in Western Australia, LPI has recommenced exploration of this project in 2021 following a disruption due to COVID-19. The area contains a 20-kilometer strike of high prospective greenstone. The lithium rockship in this region is rated at 495 parts per million (ppm) lithium with soil sampling levels of 515 ppm.

Tabba Tabba Project

The 100-percent owned Tabba Tabba project located in Western Australia covers a 20-kilometer strike of highly prospective greenstone units identified through mapping and regional magnetic surveys. Drilling conducted in August 2019 returned maximum values of 0.47 percent lithium oxide. Soil sampling of three greenstone belts shows significantly elevated concentrations of lithium, caesium, tantalum, nickel and gold. A broad-spaced (300 x 300 meter) regional soil sampling program was completed over the entire Tabba Tabba tenement with results expected in Q3 2022.

Management Team

David Hannon - Chairman

David Hannon is the founding shareholder of LPI, and brings over 30 years’ experience in the finance industry, with a focus on property, mining and international investing. He served as the founding director and former chairman of Atlas Iron Ltd., which grew to over A$3B market capitalization. Hannon has operated a private Investment group, Chifley Investor Group Pty Limited, for over 15 years.

Cristobal Garcia-Huidobro - Managing Director and CEO

Cristobal Garcia-Huidobro is a civil engineer with over 18 years’ experience developing and financing mining, energy, infrastructure, finance and property projects. Garcia-Huidobro led MSB’s exploration and development programme for the Maricunga Salar. He is formerly the CIO of CENTINELA, an investment company with a significant portfolio under management worldwide. He also served as board and committee member on a number of mining, property and agricultural funds in North and South America.

Richard Crookes - Executive Director - Corporate Finance

Richard Crookes is a geologist with more than 30 years’ experience in the mining and finance sectors. Crookes is a highly regarded Australian resource industry and investment professional with deep involvement in all aspects of mining projects, including exploration, mineral resource development, operations, project finance and project management. After 15 years in the

resource industry, he worked for 12 years at Macquarie Bank, where he originated and managed many of the bank’s principal investments in exploration and mining companies as well as leading several project finance transactions. Crookes has considerable experience in the South American resource sector.

Andrew G Phillips - Executive Director, Company Secretary and Chief Financial Officer

Andrew Phillips has over 25 years’ commercial, financial and corporate governance experience internationally. Phillips previously held senior management and board positions in several public and multinational companies including Aristocrat, Allianz, Hoya Lens and Sequoia Financial Group and has additional board experience in the small-cap resources sector. Phillips is also the CFO and company secretary of LPI.

Russell C Barwick - Non-executive Director

Russel Barwick is a mining engineer with over 43 years’ experience globally, and strong development, operating and corporate background, particularly in Latin America. He was the former COO of Wheaton River, Goldcorp, when the quickly evolving company grew from a market capitalization of several hundred million dollars to C$22 billion and became the third-largest gold company in the world by market capitalization. He previously served as CEO of Newcrest Mining and was with Placer Dome Inc. for 16 years.

Martin Borda - Non-executive Director

Martin Borda is an economist with over 40 years’ experience in a range of industries in Chile and internationally. Borda was a major stakeholder in the early development stages of the Maricunga Lithium Brine Project which included the establishment of the joint venture company, Minera Salar Blanco S.A., of which he owns 30.98 percent through a private investment entity. Borda has served on many boards in Chile, including as a non-executive of Banco Scotiabank and Compania Molinera San Cristobal.