I'm not too sure how it will all unfold with Lepidico, but the lithium space is in an unique position right now built on necessity. As opposed to gold for example where a direct customer will be ok "you find it, mine it, process it and we'll buy it", what we are seeing is an arms race going on in the industry. You have car makers, battery makers/developers etc tripping over themselves to sure up future supply. They need it, and they need to lock in supply or they're basically finished. And let's not forget this all puts a strain on ceramics, glasses, greases etc who have had a fairly comfortable time of it up until now.
Off take agreements look to be the order of the day as we've seen only recently not just here in Australia, but all over the world. These big companies are helping to fund these Lithium projects not because they are being nice and want to help out the little guy, but because out of necessity, they have to. It's a win win scenario rarely seen so exponentially, where companies are being funded by large corporations because these large corporations need that "guarantee" of supply.
I think once we realise there is a future supply/demand ratio that will be gigantically out of whack, we need to find suitable companies in which to invest.
For starters, a starting point in my opinion should be a company more advanced than just a few positive drill results.
I've been a long time holder of GXY as a producer with great future speculative projects, an investor in the Pilbara through PLS and AJM as my speculative lithium companies. As the last two head closer and closer to production (and no longer become speculative but a reality), I'm looking for a suitable replacement to fill the speculative void. For me, Lepidico is ticking all the right boxes and the biggest box is production costs. No other company will come even close in this respect.
I think there is plenty of room to move (regarding the lithium price) between now and 2025 purely through that unavoidable exponential growth, but what happens 10-15 years from now when the supply/demand ratio becomes more stable? The lowest cost production wins.
Back to your initial question, finance could be a mix of what you have suggested, but I'd be willing to bet Off Take Agreements will be large component of finance as we move forward.
The Lycopodium deal (see below) already in a sense is an off take agreement whereby this world class engineering firm would prefer shares in Lepidico over cash. They have suppliers to pay, employees to pay and all associated costs of running an extremely successful business, so they're not going to simply "hand out" their resources to do our Feasibility Study willy-nilly if they firstly, don't believe in the business model, but secondly and and more importantly, don't believe it will be a success. This deal alone should be very encouraging for share holders.
Whichever way you go Sharpey, may you have great success.
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