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Lepidico - Quarterly Activities/Appendix 5B Cash Flow Report

Key Points


• Front End Engineering and Design (FEED) works for the Karibib concentrator remains on schedule for November, with selection of the two long lead item packages complete
• Tenders received for chemical plant long lead equipment packages, with early services and FEED expected to complete late December 2021
• Phase 1 plant site secured in the Khalifa Industrial Zone Abu Dhabi (KIZAD) on signing 25 year land lease agreement allowing utility tie-in design works to start
• Karibib site is shovel ready; environmental permit to construct at KIZAD received and final building permit on track with land lease now signed
• Opportunities identified for material reductions in Scope 1 & 2 greenhouse gas emissions for the integrated Phase 1 operations from the already relatively modest levels estimated by GHD, with potential to be best-in-class at 3t CO2-e/t LCE
• Pilot plant upgrade to Phase 1 design criteria started; 22t Karibib Ore sample processed and lithium mica concentrate produced for L-Max® conversion in November/December for lender due diligence and manufacture of product samples for customer testing

Products & Marketing

• Term sheets being negotiated for lithium hydroxide offtake with multiple manufacturers within the electric vehicle supply chain
• Binding offtake deals for the majority of lithium and caesium output from Phase 1 are targeted before the end of the calendar year to secure debt finance
• Caesium sulphate process refined and extended to make a range of catalyst quality chemicals from lithium mica feedstock, including hydroxide and carbonate to meet growing consumer needs
• Bulk by-product marketing resumed in the UAE; discussions started for placement of gypsum residue for road construction with the objective of Phase 1 being a zero-waste facility

Corporate and Finance

• Well-funded with cash and equivalents as at 30 September 2021 of $11.9 million and no debt
• U.S. International Development Finance Corp. and its independent engineer BDA visited the Karibib Operations site and met with key Namibian stakeholders
• Provisional patent application lodged for the manufacture of ternary Cs-Rb-K catalyst compounds from lithium mica minerals
• COVID-19 relief medical equipment donation made to clinic nearby the Karibib operations


Lepidico continues to have a zero-harm track record since health, safety and environmental incident reporting began in September 2016. During the September 2021 quarter most employees and contractors continued to work effectively from home due to the ongoing pandemic. However, an increase in reported COVID-19 cases in Namibia temporarily closed the Karibib site. The camp reopened on 12 July and exploration activities have resumed immediately thereafter. All but one of Lepidico employees have now been vaccinated.

Considerable progress has been made on all key workstreams, despite a slowdown during the northern hemisphere summer at many organisations that Lepidico has engagement with. Activity picked up again across the board from mid-September, aided by face-to-face meetings taking place for the first time in over eighteen months as business travel resumed. The industry backdrop has been for continued improvement in supply-demand fundamentals, fuelled by Electric Vehicle (EV) adoption rates that keep surpassing commentator forecasts. Benchmark Mineral Intelligence recently stated, “The lithium deficit in 2025 will be bigger than industry was in 2016”, which makes for an extremely positive market environment for lithium chemicals as we bring Phase 1 onstream.

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