Lepidico

AU: LPD

AU$109.6m market cap

AU$0.03 last close

Lepidico provides exposure to a portfolio of lithium assets via its proprietary IP and upstream interests in Australia, Canada and Europe. Uniquely, it has produced lithium carbonate from non-traditional hard rock lithium bearing minerals using its registered L-Max process technology.

Investment summary

In May, Lepidico (LPD) announced a trio of transformational initiatives. The first of these was an all-share offer to acquire Desert Lion (TSXV: DLI), according to which LPD will pay 5.4 shares for every one Desert Lion share. The second was a one-for-nine renounceable rights issue to raise up to A$10.8m via the issue of 372.9m new shares (plus warrants) at a price of A$0.029/share. The third was a supply and marketing alliance with Gulf Fluor for the supply of sulphuric acid, including the provision of land for the construction and operation of Lepidico’s Phase 1 Plant project in Abu Dhabi. Our last note considered the strategic rationale for the three initiatives; this report looks at the valuation implications.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 0.1 (0.8) (5.4) 0.0 N/A N/A
2018A 0.2 (5.1) (7.2) 0.0 N/A N/A
2019E 0.0 (6.0) (6.0) 0.0 N/A N/A
2020E 0.0 (3.1) (7.6) 0.0 N/A N/A
Last updated on 24/07/2019
Industry outlook

In February, LPD announced that it had acquired the rights to LOH-Max technology to produce lithium hydroxide rather than lithium carbonate for reduced capital and operating costs, which caused us to increase our value for Lepidico to A$0.0684/share, based on a 7tph Phase 1 plant (but excluding any other development options). Since then, LPD has announced the acquisition of Desert Lion, an alliance with Gulf Fluor and a 1 for 9 rights offer (that closed over-subscribed) to raise A$11.0m.

Last updated on 24/07/2019
Share price graph
Balance sheet
Forecast net cash (A$m) 6.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 4.2 (38.3) (23.3)
Relative* 1.6 (42.1) (29.5)
52-week high/low A$0.0/A$0.0
*% relative to local index
Key management
Joe Walsh CEO
Shontel Norgate CFO