Lepidico Limited (ASX:LPD) Managing Director, Joe Walsh talks about the merged company, its highly complementary assets and progress on becoming a vertically integrated lithium hydroxide producer.
Jessica Amir: Your watching the Finance News Network and I’m Jessica Amir. Joining us now for an update is Lepidico (ASX:LPD) managing director, Joe Walsh. Joe, welcome back to the network. It’s great to see you again and thanks for joining us while you're in Toronto.
Joe Walsh: Thanks Jessica. Good to be with you.
Jessica Amir: So first up Joe, just tell us about the acquisition of Canadian listed Desert Line Energy.
Joe Walsh: Back in the beginning of May we announced a business combination with TSX venture exchange listed Desert Line Energy. That transaction is now close to completion. We expect it to close in fact in the next week or so. What it does is it brings together Desert Lion's lepidolite resources in Namibia with Lepidico's process technologies, L-Max and LOH-Max.
The strategy is to bring the businesses together to produce a vertically integrated business from mine through concentration, to lithium chemical production, which is a shared objective of both companies.
So the transaction with Dessert Lion is a scrip based transaction. We’re offering 5.4 Lepidico shares for every oneDessert Lion share. The offer is also extended to option and warrant holders of Dessert Lion. And on a fully diluted basis the Dessert Lion shareholders will represent about 19 per cent of the enlarged company with Lepidico shareholders representing about 81 per cent.
Jessica Amir: Thanks Joe. Now to your feasibility study for the lithium hydroxide processing plant in Abu Dhabi. How’s thatprogressing.
Joe Walsh: So we now completed the process design for that plant, and Lycopodium (ASX:LYL) is now undertaking the engineering for it. Also, back in May, we announced an MOU with Abu Dhabi based chemical company, Gulf Fluor, for supply of sulfuric acid.
Our chemical plant will consume reasonable quantities of sulfuric acid, so it's an important input for us, and Gulf Fluor, it will also be providing us with land to put our plant on. Ideally we'll be having that plant located as close to the source of sulfuric acid as possible.Being an established chemical producer in the region, they'll also be providing support for selling our by-products into that region.
Jessica Amir: And Joe you're just about to jet over to Namibia and Abu Dhabi. What’s the purpose of that trip and what’s planned?
Joe Walsh: Purpose of the trip, initially in Namibia, will be to integrate Desert Lion into the Lepidico business. They have around 15 employees in Namibia who we'll be welcoming to Lepidico and we also want to be starting exploration programs quite aggressively. We are looking to mobilize a drill count contract onto site, and have at least two drill rigs operating before the end of the first week after the deal closes.
After Namibia, we'll be heading to Abu Dhabi where we'll be meeting with representatives from Gulf Fluor, and we'll be having a workshop with them so we can really integrate what their business can offer to the phase one plant project, into that feasibility study.
Jessica Amir: And coming back home to Australia. Just give us an update on the lithium pilot plant developed in Perth, and what this now means for the company.
Joe Walsh: The pilot plant development went extremely well. We completed that well within budget by the end of May. We then transitioned into the operations phase with commissioning. That commissioning is now well advanced and we expect to be doing that full pilot plant run within the next week or two. We'll be operating for about 10 days, producing lithium carbonate, and all of the L-Max by-products, and that will then set us up for changing the materials, or construction in the plant where we need to, and converting it over later on in the year to a demonstration plant.
We'll then also be integrating LOH-Max lithium hydroxide production capability into the plant, so when we run it next, probably in November, we'll be then producing lithium hydroxide, which we will expect to be then using for the commencement of qualification to that product.
Jessica Amir: And just lastly, Joe, before we let you go, is there anything else you wanted to add today?
Joe Walsh: Yes, certainly. It's been a very dynamic first half of the year for Lepidico (ASX:LPD). The second half of the year is shaping up to be equally as dynamic. We've made some real inroads in progressing our process technologies, both L-Max and LOH-Max.
Over the second half of the year, with the pilot plant project, we will be advancing both of those technologies further with the objective of by the end of the year, being able to produce samples of lithium chemical for qualification purposes to customers.
Furthermore, we're going to be drilling quite aggressively in Namibia, and announcing a new mineral resource there. We're still working in Portugal at the Alvares project, and we expect to have an inaugural ore reserve estimate for that project within the space of the next three or four months as well. A busy second half of the year coming up for Lepidico.
Jessica Amir: Well, Joe Walsh congratulations again and thank you so much for your time while you're in Toronto. Looking forward to your next update.
Joe Walsh: Thank you very much, Jessica.