Lithium Power International (ASX:LPI) - JV for Maricunga Project


by Jessica Amir

Lithium Power International Limited (ASX:LPI) Executive Director - Corporate Finance, Richard Crookes, provides an update on the company's portfolio, starting with its key Maricunga lithium brine project in Northern Chile and hard rock lithium in WA.

Jessica Amir: Hello, I'm Jessica Amir for the Finance News Network. And joining me today from Lithium Power International (ASX:LPI) is Executive Director, Corporate Finance, Richard Crookes. Richard, welcome to FNN's Investor Event and thanks for coming along.

Richard Crookes: Thanks Jess. Good to see you again.

Jessica Amir: Great to see you again. And so, when we last caught up, we met with Cristobal Garcia-Huidobro but today, we'd like to get your take on where the company's at and how everything's progressing. But before we get underway, just tell us about LPI for those who are unfamiliar.

Richard Crookes: Sure. So, we're an ASX-listed company. We have a 51 per cent controlling interest in the Maricunga Salar Lithium Brine Project in Chile, South America. We are the major shareholder in Minera Salar Blanco, which is the operating entity for that project. We also have 100 per cent of a number of hard rock lithium projects in Western Australia, which we are currently advancing and developing. And in addition, we have another development project in Argentina, another brine project, where we have a controlling interest.

Jessica Amir: So, your share price, at the moment, year-to-date, as of today is up 50 per cent year-to-date. So, you've had a lot of success. You've achieved a lot of milestones. And a lot of that is from Chile so just take us through what's happening there.

Richard Crookes: Sure. So, we've certainly outperformed the lithium market in general. And I think that's mainly as a result of the announcement we made recently with the collaboration, the very important collaboration, that MSB will have with Codelco, a state-owned enterprise in Chile that I'm sure everyone knows. But they're making their first venture into the lithium space, which is obviously a strategic mineral for the state. And they've identified MSB as the vehicle that they want to partner with on the Maricunga. And when we announced that MOU, clearly that's had a the positive impact on the share price.

Jessica Amir: And just take us through the environmental impact assessment (EIA) and how significant that is and what it really means.

Richard Crookes: Sure. So, we submitted our EIA application, another acronym there, the environmental impact assessment, back in September, 2018. We then completed our feasibility study in January and announced that to the market this year. The process for the environmental approval is a very rigid and formal process in Chile, as it ought to be, and we are now sort of nearing the end of that. We've reached the second round of questions from the services who assess the application. And we've responded with answers to the sort of final 60 questions that they asked us to clarify. And we're expecting a positive announcement hopefully by the end of the year. So, they have a statutory sort of 60-plus-30-day period by which they have to respond. So, we're very hopeful that we'll get a positive assessment by the end of the year.

Jessica Amir: And back home in Australia, can you give us an update on your hard rock lithium assets?

Richard Crookes: Sure. So, we have three tenements groups up in the Pilbara of Western Australia, very close to Pilbara Minerals and Altura. And we have been completing a 4,000-meter drill program over the last few weeks. We are targeting lithium-bearing pegmatites in the Greenstone belts that lie sort of parallel to Pilgangoora. So, our three tenement groups up there are Pilgangoora, Strelley and TabbaTabba and we're very hopeful that we will identify some sort of economic lithium mineralisation in those assets.

Richard Crookes: Further south, we have another tenement group near the Greenbushes operations of Tianqi and Albemarle. So, a very perspective address there. And that Greenbushes tenement is currently sort of being approved by the state conservation department to allow us access onto the forestry lands. So, we're very hopeful that we'll be able to do some good geological work there soon.

Jessica Amir: And looking at the company's books, in terms of your financing, how's that going?

Richard Crookes: Well, we're in a healthy position. We've currently got $15 million in the bank. So, we're really fully-funded now until we make an investment decision to advance the Maricunga Project. So, it's a nice position to be in. We don't anticipate any short-term capital-raising. Clearly, now, following the announcement of the Codelco MOU, we're actively targeting the project financing for the Maricunga Project. And we're in the process of discussing strategic partner equity, some debt and offtake obviously. So, we're actively in those sort of conversations now. We may involve a financial advisor at some stage but at the moment, we're getting a lot of inbound interest given the positive news from our Codelco MOU.

Jessica Amir: And just lastly, Richard, is there anything else that you wanted to add?

Richard Crookes: Not that I'm aware of and nothing that I can sort of probably even think about. But clearly, we've just got to deliver on our milestones. I mean, we're like every other company out there. We're clearly undervalued relative to the size of the prize. I mean, our Maricunga Project has an NPV of over $1 billion. Current market cap is $100 million. So, there's clearly untapped value in LPI shares to come. But we've just got to get on and do our work, deliver our milestones, finalise the joint venture agreement with Codelco, announce our drilling results from WA, announce our EPC partner. And obviously, the environmental approval will be the trigger for all of those things to come together with the financing.

Jessica Amir: Wonderful. It's been great to chat to you as always, Richard Crookes. Thank you so much.

Richard Crookes: Thanks Jess.


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