MH tweet this morning now confirms the following re LPI:
- BG 99.9% LC - that’s above BG requirements
- Export permit for 473k of LCE over 30 years with further upside after resource update
- Processing - commercial scale production volumes confirmed for DFS
All we now need is an EIA, completion of drilling/ DFS and funding to start production on the old code land. If resource is doubled we’re looking at an export permit for close to 1Mt LCE. Well in excess of the PFS total of 400,000t over 20 years. In addition the royalties payable for the old code tenements are way below the average used in the PFS which factored in higher percentages for Litio. In summary- LPI is on track and is well placed to deliver 2x the level of production outlined in the PFS from the old code land alone. If the EIA is cleared quickly then the final decision to mine could be confirmed in 2018. In my opinion ANY result from the Litio legal dispute is positive as it will allow MSB to get on with putting the old code land into production ASAP. 25ktpa production means approx $US1.2bn + in NPV - easily achievable on the old code land alone. A positive result in the court case would of course add further value but right now I’d rather have a swift result and move forward immediately.
On a side note, BRZ has been pummeled and now offers a 25% discount to LPI as an entry into MSB. The caveat to that statement - if LPI surprises us with an announcement re our WA hard rock assets that increases their value.
LPI Price at posting:
29.5¢ Sentiment: Buy Disclosure: Held
