Creative Resources Leadership - Corporate Presentation October 2017 - Mines and Money Americas
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Corporate Presentation
October 2017
Creative Resources Leadership
Important Notice
This presentation has been prepared by the management of Lepidico Ltd (the 'Company') for the benefit of brokers, analysts and investors and not
as specific advice to any particular party or person.
The information is based on publicly available information, internally developed data and other external sources. No independent verification of
those sources has been undertaken and where any opinion is expressed in this document it is based on the assumptions and limitations
mentioned herein and is an expression of present opinion only. No warranties or representations can be made as to the origin, validity, accuracy,
completeness, currency or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for
losses, claims, damages, demands, costs and expenses of whatever nature arising in any way out of or in connection with the information, its
accuracy, completeness or by reason of reliance by any person on any of it.
Where the Company expresses or implies an expectation or belief as to the success of future exploration and the economic viability of future
projects, such expectation or belief is based on management’s current predictions, assumptions and projections. However, such forecasts are
subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or
implied by such forecasts. Such risks include, but are not limited to, exploration success, commodity price volatility, future changes to mineral
resource estimates, changes to assumptions for capital and operating costs as well as political and operational risks and governmental regulation
outcomes. For more detail of risks and other factors, refer to the Company's other Australian Securities Exchange announcements and filings. The
Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in, or omission from, any forecast or to update
such forecast.
Competent Person Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Tom Dukovcic, who is an employee of the
Company and a member of the Australian Institute of Geoscientists and who has sufficient experience relevant to the styles of mineralisation and
the types of deposit under consideration, and to the activity that has been undertaken, to qualify as a Competent Person as defined in the 2012
edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.” Mr Dukovcic consents to the
inclusion in this report of information compiled by him in the form and context in which it appears.
2
Overview
Lepidico (ASX: LPD) is an ASX-listed lithium exploration and development
company with a management team experienced in project and business
development - market capitalisation A$25M*
Lepidico’s strategic objective is to become a fully integrated lithium
business from mine to battery grade lithium chemical
Lepidico is differentiated by its L-Max® process technology that extracts
lithium salts from less contested lithium-mica minerals
L-Max® is a clean-tech process with competitive capital intensity and low
operating costs after eco-friendly by-product credits
Phase 1 Plant Project located in Eastern Canada; currently in Full Feasibility
Study – first production target late 2019
Quality lithium-mica mine feed will be sourced from Canada, Portugal and
Australia
At 30 June 2017 Lepidico had A$3.3M in cash and no debt
3
*Reference share price 1.2c
Asset Overview
Separation Rapids lithium
deposit 9.6Mt @ 1.31% Li2O
Lepidolite offtake LOI with
owner Avalon Advanced
Materials
Phase 1
L-Max® Plant
Eastern Canada,
In Feasibility Study Moriarty JV
LPD 75% Farm-in
Lepidolite Target
Exploration
Alvarrões Lepidolite Mine Pioneer Dome JV
Resource pending LPD 75% Earn-in on Peg9,
Ore offtake agreement with Lepidolite rich pegmatite
Grupo Mota Permitting to drill 4
Mineral Resource Development
Alvarrões Lepidolite Mine*
Ore access agreement with Grupo Mota over the operating Alvarrões lepidolite
mine, Portugal
Multiple stacked lepidolite mineralised pegmatite sills 1m to 4m thick exposed
over a strike of more than 1km in two open pits
25-hole drill program commenced May 2017; inaugural Mineral Resource estimate
due October 2017; mineralized system open down dip and along strike
Drilling has extended mineralisation 300m down dip. Target Resource estimates:
Block 1: 0.5 Mt – 1.4 Mt @ 1.0% - 1.5% Li2O in lithium mica
Block 3: 1.0 Mt – 2.6 Mt @ 1.0% - 1.5% Li2O in lithium mica
Current mining operation produces a lepidolite concentrate grading ~1.8% Li2O for
use in the ceramics industry
Mining rates may be increased materially to 50,000 tonne to 75,000 tonne per
annum sufficient to feed the planned Phase 1 L-Max® Plant in Sudbury, Canada
*Reference: ASX Announcement, Alvarrões Lepidolite Mine Ore Access Agreement, 9 March 2017
5
Mineral Resource Development
Separation Rapids*
Separation Rapids is one of the largest “complex-type” lithium pegmatite
deposits in the world, owned 100% by Avalon Advanced Materials Inc.
NI43-101 PEA completed on the Petalite Mineral Resource (opposite)
Excellent recoveries and high-specification, 99.88% battery grade lithium
carbonate produced in L-Max® testwork programme
L-Max® to maximize lithium mineral Resource potential (plus by-products)
Outcropping Lepidolite zone largely un-tested – Resource drilling
completed May 2017 for revised estimate second-half 2017 Tonnes Li2O# Ta2O5 Cs2O Rb2O
Class
(Mt) (%) (ppm) (%) (%)
Latest work indicates >20% of the lithium content of the existing Mineral Measured 4.03 1.32 60 0.017 0.343
Resource is present in lithium micas Indicated 3.97 1.26 70 0.025 0.362
Letter of Intent between Lepidico and Avalon Advanced Materials Inc. (TSX: Measured plus
8.00 1.29 60 0.021 0.352
Indicated
AVL and OTCQX: AVLNF) for an integrated Lepidolite mining and lithium
carbonate production partnership in Canada Inferred 1.63 1.42 80 0.016 0.360
*Reference: ASX Announcement, Lithium Alliance with Avalon Advanced Materials Inc, 6 February 2017 TOTAL 9.63 1.31 63 0.020 0.353
# Note: Li2O is total lithium oxide without distinction between contributions by petalite, Li-mica or lepidolite
6
Mineral Resource Context
3.00%
Lepidolite
Target
Li2O equivalent
after by-
2.50% Greenbushes
products
120
5-15M t @
2.40%
2.0-2.6%
2.00% Lepidolite
Rio - Jadar
Target Nemaska Lithium 136
5-15M t Birimian 37 1.86%
33 1.48% Critical
@
Grade (%Li2O)
1.37% Elements Kidman Resources
1.0-1.5% 37 128
1.50% 1.25% 1.44%
Tawana NeoMetals
13 78
RB
1.18% 1.37% Mineral Resources
Sayona Energy
198
14 33 Prospect
1.18%
1.07% 1.19% 57
1.00% 1.13% Pilbara
Dakota - Sepeda Minerals
Altura
10 Galaxy - Mt 156
Mining
1.00% Caitlin 1.25%
40
16 1.00%
1.08% Galaxy - James Bay
0.50% 23
Cinovec
1.20% 657
Milbra 0.43%
19
0.35%
0.00%
0 50 100 150 200 250
Resources Tonnes (MT)
Source: Company data, Lepidico targets
7
Positive Phase 1 L-Max® Plant PFS*
PFS highlights economic potential to construct a strategically located Product Recoveries
L-Max® Feed Recovery to
Phase 1 L-Max® process facility in Eastern Canada due to: Element
Grade Product
- Close proximity to abundant, low-cost sources of bulk consumables Lithium 2.10% 94%
- Location adjacent to markets for bulk by-products (particularly SOP Potassium 6.77% 85%
and sodium silicate) Silicon 23.10% 85%
- Established infrastructure (particularly road, rail and port Caesium 0.05% 81%
infrastructure)
Tantalum 0.03% 70%
- Close proximity to a skilled labour force with competitive labour
rates Expected Construction Costs
Item US$M
Feasibility Study and Mineral Resource delineation program Feasibility Study and 2017 Owners Costs 5.0
commenced April 2017 L-Max® plant direct costs 16.2
L-Max® plant services 4.6
- A$3.7 million raised April/May 2017 via pro-rata non-renounceable
Infrastructure 2.6
Rights Issue Indirect costs 6.7
Contingency at 20% 6.0
*Refer to ASX Announcement, Positive Phase 1 L-Max® Plant Pre-Feasibility Study”” dated 27 February 2017
for further details Total 41.1
8
Phase 1 L-Max® Plant Project Progressing to DFS
Key metrics for the Feasibility Study scope* will be:
Project Planning Key Metrics
Key Parameter Key Metric
- Plant throughput rate 3.6tph of lithium-mica concentrate
Lithium Carbonate (>99.5%) Production 3,000 tpa
(annualised rate of 29,000tpa – 91.4% operating time)
SOP (>95% K2SO4) Production 3,000-4,000 tpa
- Battery grade lithium carbonate equivalent (LCE) Sodium Silicate (40wt% solution at SiO2:Na2O ratio of 2.0)
40,000-50,000 tpa
Production
production of c. 3,000tpa
Caesium (as metal contained in formate) Production 10-100 tpa
- Average C1 Costs nil to negative after by-products Tantalite Con (30% Ta2O5) Production 20-25 tpa
Li-Carbonate C1 cost after by-products credits
The L-Max® Advantage
L-Max® leaches lithium from certain micas and phosphates without
roasting – conventional processing of spodumene requires capital and
energy intensive roasters to extract lithium, often with no by-products
L-Max® reagents and operation have straightforward health, safety and Lepidolite Zinnwaldite Ambygonite
environmental characteristics K(Li,Al,Rb)3(Al,Si)4O10(F,OH)2 KLiFeAl(AlSi3)O10(OH,F)2 (Li,Na)AlPO4(F,OH)
L-Max® utilises common use, inexpensive reagents & is energy efficient
100
L-Max® is novel but utilises conventional equipment and straightforward 80
Metal extraction (%)
processes – a series of agitated tanks, crystallisers and filters
60
Lithium
By-products include potassium sulphate fertiliser (SOP), sodium silicate, 40
Cesium
gypsum and potentially caesium and rubidium formates 20
Potassium
Fast leach kinetics, high recoveries and moderate process cost estimates 0
0 2 4 6 8 10 12 14 16 18 20 22 24
make for compelling economics
Time (hrs)
Element leach curves under L-Max® - PFS sample
10Peer Analysis
Phase 1 L-Max® Plant is Favourably Placed on the Global Cost Curve*
*Lithium Carbonate Cost Curve 2016 co-product basis (Source: Roskill). Ref: ASX Announcement “Positive Phase 1 L-Max® Plant Pre-Feasibility Study”, 27 February 2017
11Business Model
Operating Business Royalty Business
L-Max® process plant
(wholly owned/JV)
L-Max®
Integrated with third-party
concentrator licences
Third-party
concentrate feed
and mines
Third-party mine ore feed
12Opportunities
Mining and processing sustainably for 21st century products
2017 2018 2019 2020 2021
Phase 1 L-Max® Plant
Phase 1 L-Max® Plant Mini-plant trial & due diligence
PFS c.3,000t pa LCE
DFS
Permits & Approvals FID H2SO4 ~50,000t pa
Early Works/FEED DFS ~US$5M
Implementation
Operation Development ~US$40M
Full Scale L-Max® Plant
Scoping Study Full Scale 1 L-Max® Plant
PFS @ c. 20,000t pa LCE
DFS
Permits & Approvals FID H2SO4 ~400,000t pa
Early Works/FEED
Implementation
Studies ~US$10M
Operation Construction ~$Pending
13Directors and Senior Management Team
Mr. Gary Johnson Mr. Joe Walsh Mr. Tom Dukovcic Mr. Mark Rodda Ms. Shontel Norgate Mr. Gavin Becker
ARSM, BSc (Eng), MBA,
MAusIMM, MAICD BEng, MSc BSc (Hons), MAIG, MAICD BA, LLB B.Bus FAusIMM, CP(Met), GAICD
Chairman Managing Director Director Exploration Non-Executive Director Chief Financial Officer Business Development
Gary has over 30 years Joe is a resources industry Tom is a geologist with over Mark is a lawyer with 20 years Shontel is a finance executive Gavin is a metallurgist with
experience in the mining executive and mining 25 years experience in experience in the resources with over 20 years commercial 40 years industry experience.
industry as a metallurgist, engineer with over 25 years exploration and sector including the experience in the resources During that time he has
manager, owner, director and experience working for development. He has worked management of local and industry including debt and worked in senior operational,
managing director possessing mining companies and in diverse regions throughout international mergers and equity finance, financial R&D, feasibility study and
broad technical and practical investment banks. Joe also Australia, including the acquisitions, divestments, reporting, project management, consulting roles on lead/zinc,
experience of the workings has extensive equity market Yilgarn, Kimberley, central exploration and project joint corporate governance, gold, uranium, copper and
and strategies required by experience and has been Australia and northeast ventures, strategic alliances, commercial negotiations and nickel/cobalt/scandium
successful mining companies. involved with the technical Queensland. Tom is a corporate and project financing business analysis mines and/or projects.
and economic evaluation of Member of the Australian transactions and corporate
many mining assets and Institute of Geoscientists and restructuring initiatives.
companies around the world. a Member of the Australian
Institute of Company
Directors.
14Lepidico Strategy
To become a fully integrated lithium business through the value chain
from mine to battery grade lithium chemical
by leveraging its registered L-Max® technology to process concentrate
from high-quality lithium mica Resources
via high-return, strategically located developments in low risk jurisdictions.
15Q&A
16Creative Resources Leadership
Website: www.lepidico.com
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