Lepidico Limited (ASX:LPD) Managing Director Joe Walsh discusses the progress of the company’s Karibib lithium operations and Abu Dhabi processing plant, potential capital raisings and offtake agreements.
Melissa Darmawan: Lepidico (ASX:LPD) is an innovative developer of sustainable lithium hydroxide and other critical minerals and the global leader in lithium mica processing. Today, we welcome its Managing Director, Joe Walsh. Joe, nice to meet you and welcome back to the network.
Joe Walsh: Thank you very much, Mel. Good to be here.
Melissa Darmawan: Great to have you and before I start, I have to say there’s a mighty good-looking guitar there, Joe.
Joe Walsh: It certainly is. It was made by Chris Melville in Brisbane. He’s a master luthier. Fabulous.
Melissa Darmawan: Great to hear. Great to hear. Joe, lithium is certainly the topic of the moment, and we’re excited to hear about your recent announcements. But before we do go into it, could you perhaps recap about a key focus for Lepidico. That is, your proprietary technology that can leach lithium and other valuable metals from micro minerals?
Joe Walsh: Certainly, Mel. Our proprietary process technologies I think help differentiate us and will allow us to become a low-cost producer of lithium chemicals and other critical minerals. What we’re effectively doing is deconstituting that mineral and using reagents, making it into six different valuable products. Our greenhouse gas emissions are significantly lower than for a typical vertically integrated conventional spodumene project. But, importantly, we know where our emissions are and we’ve got an intention to reduce them substantially, particularly if we can be getting green hydrogen. And one of the beautiful things about the process is there is no solid process waste. It really is a sustainable series of processes fit for the 21st century.
Melissa Darmawan: Well, I read that your process is patented in the major industrial countries. Is that therefore something you would consider licensing out as a revenue stream?
Joe Walsh: Well, we already have. At the end of 2020, we entered into a licence agreement for a package of our process technologies with a UK private company, Cornish Lithium. So, they’re using our process technologies for the feasibility study on their hard rock mica project in the south-west of England. In certain circumstances, yes, we may consider licensing again, but it has to be for the right reasons. It has to suit us.
Melissa Darmawan: Well, your announcement talks about approvals for operations in Namibia. Can you tell us more about that?
Joe Walsh: Permits and approvals are a huge challenge for mines virtually anywhere in the world. And it is really great that our project in Namibia is fully permitted. There were some final permits that we had to apply for where we needed to get some initial development works under our belt to be able to make the applications. We’ve made those. We’ve got the approval. So, we are shovel-ready in Namibia. And we are very close to that in Abu Dhabi, where we’re looking at building the chemical plant. Importantly there, we’ve got that vital environmental permit to construct in Abu Dhabi. But there are some others that we are in the process of getting now. But the project is extremely well advanced through initial stage one EPCM works. So, that’s engineering, procurement, and construction management. And we expect to be going to stage two works, which is full project implementation, in the third quarter of this year subject to a final investment decision.
Melissa Darmawan: Do you need to raise any capital for the Namibia mine?
Joe Walsh: So, yes, we will, Mel. We’re very well-capitalised at the moment. At the end of December, we had over 10 million in the bank. We have got some listed options which are expiring in May, which will bring another 5 million, more than 5 million in, if they’re all exercised. Both Gary Johnson, our chairman, and myself have exercised those options in the last week or so. And the proceeds from those option exercises will be used for accelerating some of the work programs in Namibia and also for exploration. So, it’s allowing us to commit to a more aggressive exploration program on our properties in Namibia, with the objective of expanding the resource base, which will then support a phase two project.
Melissa Darmawan: Last question from me. Are you able to tell us about any offtake agreements in the pipeline?
Joe Walsh: So, we did announce in December that we’d entered into a binding offtake agreement with the European trading company Traxys. That’s for all of our lithium hydroxide that we expect to produce over the first seven years of the operation. But we’re working very closely with Traxys now to place that lithium hydroxide to end users, and largely the lithium ion battery cathode manufacturers. And I think one of the beauties of going through a trader like Traxys is they have got very broad relationships across the market. And I firmly believe that it will give us all the best revenue outcome for Lepidico shareholders. We are also working on offtake for all of our other products, and we are seeing very, very good demand for those. So, watch this space. Over the course of this next quarter, we would expect to be seeing offtakes being signed up.
Melissa Darmawan: Thank you so much, Joe, for being with us on Finance News, and I wish you all the best, and I look forward to speaking to you again.
Joe Walsh: Thank you very much, Mel.