LPI - The Next Lithium Producer in Chile

For a lot of LPI shareholders it has been a five to six year wait for development of the most promising lithium brine deposit on the planet. The good news is that we are almost there. We have a plethora of major announcements due over the next three to four months, all of which will be the making of this company. This includes:

• The demerger of the LPI's WA assets (DemergeCo) - given the current LPI share price valuation ignores the WA assets, this will be a major bonus for LPI holders, particularly if the in-specie distribution is as generous as suggested
• A decision by global conglomerate Mitsui on a Maricunga stage 1 offtake
• A decision by Mitsui on Maricunga stage 1 project finance
• Commencement of work on direct lithium extraction (DLE) for Maricunga stage 2
• The stage 1 Maricunga project final investment decision (FID)
• DemergeCo's listing on the ASX.

Also, there are others factors which could spice things up during 2022 including:

• Potential consolidation of the MSB project structure resulting in LPI's Maricunga project equity increasing to 70-80% - this is a strong possibility and given the current Maricunga project structure has been seen by the market as a negative, this will only ENHANCE LPI's long-term value.
• A potential takeover of LPI - there is a lot of global interest in what the Maricunga project has to offer. it has been suggested by LPI management that if an offer was attractive enough it would be put to shareholders for consideration.

Now what would one consider to be an attractive takeover offer. Lets consider the FACTS.

• The Maricunga resource is the highest grade undeveloped lithium brine resource available for development. Further drilling of the old code and Litio tenements would increase the current resource to well over 5 million tonnes at 1,000+ mg/l Li. There is no other lithium brine resource like it on the planet except the Atacama.
• The stage 1 project NPV, as stated in the updated DFS is US$1.425 billion after tax (US$1.984 billion before tax). Maricunga stage 2 is expected to double the overall Maricunga project NPV. That amounts to a stage 1 and 2 project NPV of US$2.85 billion or AUD$3.88 billion after tax or AUD$5.4 billion before tax.
• The current market capitalisation of LPI is AUD$240.6 million, which is 6.2% of the stage 1 and 2 project NPV after tax and 4.45% before tax. Considering stage 1 only, the percentages are 12.4% and 8.9% respectively.
• Whatever way you look at it, LPI is UNDERVALUED.