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Lepidico - Quarterly Activities/Appendix 5B Cash Flow Report


Key Points

Development

-- Karibib Phase 1 concentrator Front End Engineering and Design (FEED) revisions completed that support both improved operability and a capital efficient doubling in throughput, with inputs established for the Phase 2 Scoping Study
-- Phase 1 chemical plant Process Design Criteria (PDC) finalised, which incorporates design improvements based on operating data from demonstration plant pilot campaigns, engineering risk assessments and third-party major mechanical equipment vendor testwork; control estimate well advanced and targeted for mid-August with FEED complete September
-- LOH-Max® raw lithium hydroxide and by-product pilot campaigns completed; final stage lithium hydroxide refining to complete imminently
-- Non-process infrastructure development at KIZAD chemical plant site well advanced; architectural design of non-process buildings has started, design of the process buildings to start on completion of FEED
-- Major supply and construction contracts, which are not on the critical path are advancing as per schedule; commercial green hydrogen supply now expected in 2025-‘26 at KIZAD
-- Helikon 4 infill drilling returns broad intercepts of lepidolite mineralisation, including 40 m @ 1.08% Li2O and 20 m @ 1.16% Li2O; weighted average intercept grade of 0.60% Li2O from new drilling versus the Helikon 4 Inferred Resource grade of 0.38% Li2O; revised Mineral Resource estimate due September 2022 to inform Phase 2 Scoping Study
-- Further drilling planned at Helikon 2, 3 and 4 to follow up on these excellent results

Products & Marketing

-- Commercial negotiations well advanced with Tier 1 consumers for lithium hydroxide supply under the binding Traxys agreement for 100% of annual Phase 1 production for seven years
-- Caesium supply negotiations well advanced with growing interest for both sulphate and hydroxide
-- LOIs signed with UAE customers for 100% of annual production of all Phase 1 bulk products: amorphous silica, Sulphate of Potash (SOP) and gypsum residue; for zero solid process waste

Corporate and Finance

-- Well-funded with cash and equivalents as at 30 June 2022 of $8.0 million and no debt
-- Executive team expanded with General Manager Sustainability & Country Affairs Namibia starting during the quarter; recruitment of two General Manager Operations, one for Namibia and the other for the UAE, and Project Director completed with all positions due to commence during the September quarter
-- Updated Letter of Interest and term sheet from U.S. International Development Finance Corp. (DFC) provided with legal due diligence to commence incorporating commercial lender input  

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