Lithium Power International Limited (ASX:LPI) (“LPI” or “the Company”) is pleased to submit this Quarterly Activity Report for the period ended 31 December 2017.
HIGHLIGHTS
- Outstanding economic outcomes announced from the Preliminary Economic Assessment (PEA) for the Maricunga Lithium Brine project in northern Chile. These included an ungeared IRR of 23.4% and a project NPV of US$1.05 billion before tax, at an 8% discount rate and based on a project life of 20 years.
- Forecast project operating costs would place Maricunga among the most efficient global lithium producers, with lithium carbonate production costs of US$2,938 per tonne FOB, reducing to US$2,635/t with credits from a potassium chloride fertiliser (KCl) by-product.
- Process test work for Maricunga continues, with final results of the first LCE production pending, using expert equipment suppliers Veolia and GEA to optimise the lithium extraction process.
- Site visits to Maricunga were conducted with several groups of investment analysts. Canaccord, Sprott Asset Management and other analysts now cover LPI as progress is made towards completing a feasibility study due in Q3 2018.
- A non-binding MOU with Chinese motor vehicle manufacturer Sichuan Fulin Industrial Group Co Ltd (Fulin) has been executed for potential project equity participation and off-take agreement. A technical and legal due diligence process has been conducted by Fulin which was completed in January 2018. Further discussions are to be held in February 2018.
- LPI’s and MSB’s boards have approved advancing the project to a Definitive Feasibility Study.
- The company successfully raised A$35.6 million. This comprised a heavily over-subscribed A$15m offering to new institutional, existing and sophisticated investors fully underwritten by Canaccord Genuity (Australia) Limited, in conjunction with a fully underwritten placement of approximately A$20.6m via the exercise and underwriting of the listed LPIO options which had an exercise price of A$0.55 each.
- A contract was finalised with Centenario Lithium Limited to buy the Centenario lithium project in Argentina for A$4 million in cash. The sale included a 1.5% gross royalty on future production to LPI. An initial A$1 million has been received, with the balance to be paid at completion of the transaction on or before 30 April 2018. The purchaser may elect to pay the balance in a combination of cash and shares, which will attract a A$250,000 premium on the total purchase price to total A$4.25 million.
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