Tech Metals: Lepidico up ~30pc on lithium hydroxide project study
Link copied to
Lepidico’s (ASX:LPD) “modest”, 4,900-tonne-per-annum (tpa) Karibib lithium hydroxide project in Namibia will deliver an average $49m profit every year and take just three years to pay back, the company says.
The company says the relatively small size of the 4,900tpa phase one lithium chemical project is important “as project development and operating risks tend to increase exponentially with scale”.
The stock was up almost 30 per cent to 0.9c per share in morning trade, clawing back some of its considerable losses over the past year.
The $US139m ($210m) development cost is split 30/70 between the mine and concentrator on a brownfields site in Namibia, and a chemical conversion plant in Abu Dhabi.
It also includes a 13.6 per cent ‘contingency’ in case of cost blowouts during construction and ramp up.
Karibib is also going to produce a few key by-products, like caesium, rubidium and potash. These products, like lithium, are all on the US government list of 35 Critical Minerals, Lepidico says, “making the project strategically significant”.
Operating costs after credits from these by-products include an all-in sustaining cost (AISC) of $US3,221/t for the integrated project.
AISC is a good measure to appraise the profitability of a project because it includes everything, from mining, refining and transport, through to administration and exploration.
This is based on an average price forecast for lithium hydroxide over the project life of $US13,669/t.
Lepidico is working to an ambitious schedule, assuming that all permits, offtake agreements, and a full funding package will be secured in the June 2021 quarter.