LMAX / LOH-MAX - the downstream game has changed
Hi folks,
LPD has been on occasional headlines since 2016 because of its disruptive LMAX tech. It has been an exciting journey so far. There’s been ups and downs but the journey continues in a positive and forward direction.
There may be new investors here who joined the LPD train recently and we welcome them. As always we encourage everyone to d.y.o.r.
What really stood out for many longs was the amazing cost profile of the Lmax tech- produce lithium at zero cost, yes, free. We look forward to getting the DFS with the new LOh-max integrated into Lmax.
The attractiveness of LPD is not foreign to lithium investors. GXY is LPD’s biggest shareholder. Lmax was almost ‘stolen’ when an attempted takeover was overwhelmingly rejected in 2017. Bacchus came to the defence and he too became a major shareholder of LPD. For those who don’t know Bacchus, a quick google will tell you.
Also Interesting was how LMAX tech bouyed the SP of EMH to $1.40. But When it abandoned LMAx in its FS, it’s shareprice plummeted and never recovered now sitting like a duck at 35 cents. Similarly, the ridiculers of Lmax never bought LPD and lost an opportunity to make 8 baggers in 2017, and those who had weak faith and sold their parcels for a $10k or $20k profit forfeited their chance to make $100k or $300k. Beware this stock is not dead. It’s a platypus. It’s down recently, but what an opportunity not to be missed.
Enter Nemaska! Nope there are no conversations yet. But Nemaska is in Quebec. And LPD’s North American office is in Toronto, a few hours drive from Quebec or just a phone call away. Look at nemaska’s cost profile at the bottom of this post. NMK will spend or has already spent all $801 million to build its carbonate/hydroxide plant.
Nemaska 33,000 tonnes at $801 million (more than $1 billion now due to overruns)
“versus”
LPD Lmax/loh-Max 5,000 tonnes at $35 million
Guys, we can build 30x Phase 1 plants if we had Nemaska’s budget, and producing 150,000 tonnes or almost 5x nemaska’s output.
Conclusion: Capex wise, LMax LOH-MAX is 80% CHEAPER than nemaska’s tech. What a......!!!!! This is not even counting the “MATERIAL” Opex savings of using LOH-MAX!
Nemaska, come on, pick up the phone and call LPD.
Yes, LPD has the perfect strategy! Build phase 1 which requires only $35 million, but it is economically decent enough to generate up to $50 million annual profits. This can be upscaled to phase 2 with 15,000-25,000 tonnes. This reflects the wisdom from actual experience of LPD management having built multi billion dollar companies from scratch in the past - Joe Walsh having been instrumental to building a multi billion dollar company in PAN Aust when sold, and Gary Johnson in building the tech which was the reason the company was bought for at $7 billion (?) - google norilsk.
Meanwhile LPD Fast forward to 2018- pain and shared pain with other lithium stock as the LPS SP glided to 1.7c to 1.9 for like endless months. The Pilot plant was not foreseen but became necessary.
How has things changed since then?
-better sentiment is returning q1 2019
-oversupply myth has been exposed
-Pilot plant to be finished in about 12 weeks
-loh-Max has been developed to integrate into Lmax
-alvarroes resource upgrade due soon in a few weeks, Q1 2019
-GXY’s mount cattlin was tested as compatible feed to Lmax
-two other decent sources have been progressed but is currently on ‘confidentiality clauses’
-LPD continues to shore up its LmAX FEDDSTOCK - alvarroes as stayed above, youanmi farm in, Avalon deposit in Canada
WHAT WE CAN EXPECT IN 2019?
-completion of Pilot plant
-finalisation of DFS
-complete redesign of phase 1 with loh-max
-possible offtake for phase 1
-Phase 1 plant finalised and permits obtained
-validation of loh-max via pilot plant can open interest of chemical producers (this is a big opportunity - a new revenue source with significant implications to the company SP)
-SP expected to reflect the progress and derisk achieved
-for LPD to be able to validate the tech via the pilot plant is like having ultrasounded a baby inside the mother as being without defects, therefore begin preparations for its arrival in the family. And just like a baby that doesn’t stay in the tummy for more than 9 months, expect LPD to produce the white gold. No imaginations required.
MEANWHILE, I thought it’s worth showcasing what LPD stands for.
SUMMARY OF STRATEGY
“to fast track the business to free cash flow generation, demonstrate the commercial viability of L-Max® and LOH-MaxTM, and become a globally significant, vertically integrated lithium chemical producer through the value chain from mine to battery grade lithium chemical.”
WHAT DIFFERENTIATE LPD
“Lepidico is differentiated by its clean-tech process technologies, which collectively extract lithium and recover valuable by-products from the less contested lithium-mica and lithium-phosphate minerals”
“Lepidico’s strategic objective is to develop a sustainable business that provides above average returns, by developing a fully integrated lithium business from mine to battery grade lithium chemical production”
Look at NEMASKA’s FS!!!
“The current CAPEX for the Mine, Concentrator and Hydromet Plant is $801 M, excluding already invested CAPEX of $74 M. This CAPEX reflects the process optimization as well as the additional equipment required to increase production of lithium carbonate from 3,250 tonnes/y up to 16,000 tonnes/y, which is reflected in the increase in the total output capacity of the Hydromet Plant by 20%, going from a capacity of 27,400 t/y LCE to 33,000 t/y LCE. In addition, based on the operating experience gained at both the Mine and the Hydromet Plant, the 2018 Feasibility Study includes, among other things, the addition of an ore sorting circuit at the Mine. Additional equipment and buffer zones have also been added throughout the process at both sites to increase the operability, while enhancing process reliability as well as allowing on-going maintenance without disrupting operations, thus ensuring optimal performance.”
https://www.nemaskalithium.com/en/i...es/2018/2383c40c-3570-49e0-86f5-9df5112a253c/To recap,
-LPD tech is disruptive, how big will it be? Who knows, it has the vital signs of an atlassian unicorn
-the claimed Capex and Opex savings are “material” - to put it bluntly, it’s massive (it costs 80% less than nemaska.)
- loh-Max can replaced the standard back end lithium recovery circuits by chemical producers resulting to material Capex and Opex cost reductions
-WATCH this space
-Hold a few LPD shares or not is your call.
-I’ll hold for a few baggers
Cheers and happy weekend
(20min delay)