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MINING | Lepidico


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LEPIDICO

Lithium chemicals company undertakes rapid transformation


MINING | Lepidico

For Perth-based lithium chemical company Lepidico, the 2019 June-ending quarter has been a truly transformational period. In April, the firm announced that its pilot plant project for the production of lithium carbonate, using its patented L-MaxŽ technology, had commenced the commissioning phase. This milestone was followed by three significant announcements on May 7th: First, Lepidico confirmed an-all share offer to acquire lithium company Desert Lion Energy Corp, listed on the TSXV. Then it announced a Memorandum of Understanding (MoU) with Abu Dhabi-based chemical manufacturer Gulf Fluor. Finally, Lepidico launched a rights issue to raise up to AUS$10.8 million in new shares. Factor in the company’s earlier pivot towards lithium hydroxide production, utilising its new LOH-Max™ process, and it is clear to see that Lepidico has undergone a significant metamorphosis since the beginning of 2019. The successful commissioning of the pilot plant project in Western Australia, onschedule and within budget, delivered a big


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MINING | Lepidico boost to ASX-listed Lepidico, according to

“When we evaluated projects that received

managing director Joe Walsh.

final investment decisions and funding commitments in 2018, they were almost

“It should give our shareholders and potential

exclusively hydroxide projects. Furthermore,

future stakeholders confidence that we can

in various discussions with prospective

deliver on our development plans,” he says.

customers, we were informed that there was

“L-Max® is a new process and this is the first

a strong preference for hydroxide. These was

time that a plant using small scale industrial

factors that we couldn’t ignore.”

equipment has been built.” Taking into account the industry’s changing The pilot project moved into the operational

preferences, Lepidico consulted with its

phase in May, with first concentrate being fed

major shareholder Strategic Metallurgy to

into the plant towards the end of the month,

begin research and development work on a

after which it will start to produce lithium

novel process to produce lithium hydroxide.

carbonate and the various by-products from the L-Max® process, including sulphate of

In parallel with this, Lepidico had also

potash (SOP).

become aware of a fundamental risk to the

A new processing technology

project associated with the production of sodium sulphate as a by-product from its lithium carbonate process flowsheet.

Lepidico also plans to build LOH-Max™ lithium hydroxide capability into the plant

After a risk review session, the company

later in 2019, also using industrial equipment.

found that long term offtake for the highly soluble by-product may be hard to come by,

“We intend to rapidly advance the

given the increasing maturity of the global

process development for LOH-Max™

sodium sulphate market, which is mainly

to demonstration scale. We’ve got the

used in powdered detergents and pulp and

foundation plant infrastructure now to

paper manufacture.

achieve this and thereby put LOH-Max™ process development onto a fast-track,” says

“While we were looking for a hydroxide

Walsh.

process, we were also keen to develop a process step for the back end of L-Max®

Having closely followed the development

that didn’t lead to the production of sodium

of the lithium market over the last 12-18

sulphate. Those two components are what

months, it became apparent to Lepidico

led to the development of the LOH-Max™

that preferences in the lithium chemicals

process.”

supply chain were shifting towards hydroxide production over carbonate.


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MINING | Lepidico Lepidico began engineering work in June, with a planned four-month schedule for its consultant Lycopodium to complete the required circuit engineering and integrate it into the Phase 1 plant design. “We have set an aggressive but realistic timeline so we don’t impose too much of a delay on our planned development of the Phase 1 plant project,” says Walsh.

Becoming vertically integrated Lepidico’s recently announced acquisition of Toronto-based Desert Lion Energy represents a major advancement for the company. The merger will create a vertically integrated lithium development company, from the mine all the way to chemical The LOH-Max™ process has been designed to production. treat a lithium sulphate intermediate product that is produced both from L-Max® and from The deal will give Lepidico direct ownership the conventional conversion of spodumene

in Desert Lion’s lepidolite deposits and large

concentrates. Therefore, LOH-Max™ has

exploration package in Namibia, in contrast

broad application within the lithium industry, to its position at the Alvarrões deposit being applicable to most hydrometallurgical

in Portugal where Lepidico has access to

conversion processes that employ sulphur-

lepidolite ore under an offtake agreement

based chemistry.

with the mine owner Grupo Mota.

During the March quarter, Strategic

According to investment research firm Edison

Metallurgy produced the first samples of

Group, the merger will therefore de-risk

lithium hydroxide using the proprietary

Lepidico as an investment proposition from

LOH-Max™ process. Preliminary design work

a strategic and operational perspective, since

also indicated that considerable capital and

it will not be dependent on a single source of

operating cost savings may be realised, as

lepidolite supply.

the LOH-Max™ design had fewer process steps and less mechanical equipment than

“The Desert Lion deal gives us direct

conventional processes.

ownership in our own lepidolite deposit.


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MINING | Lepidico

“We intend to rapidly advance the process development for LOH-Max™ to demonstration scale. We’ve got the foundation plant infrastructure now to achieve this and thereby put LOH-Max™ process development onto a fast-track” – Joe Walsh, Lepidico managing director Furthermore, it will give us an alternate feed

Dhabi-based chemical company Gulf Fluor

source for the Phase 1 chemical plant and/

for the supply of sulphuric acid and land for

or a feed source for a second plant. We are

the construction and operation of its Phase 1

looking at building up a portfolio of assets

Plant Project.

to support our longer-term strategic growth objectives.”

Gulf Fluor operates a large industrial plant in the Industrial City of Abu Dhabi (ICAD) and

These strategic growth objectives

is the largest producer of sulphuric acid - a

were underlined by the subsequent

critical reagent in the L-Max® process - in

announcement that Lepidico had entered

the region. In addition, the firm leases a large

into a supply and marketing alliance with Abu

parcel of land in ICAD on which it is envisaged


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that Lepidico could build its Phase 1 plant

same site of an exisitng sulphuric acid plant.

project.

This negates the requirement for transport, logistics and handling of sulphuric acid,

Lepidico stands to benefit from a number

thereby reducing risk.

of operating advantages should it choose to locate its Phase 1 project in ICAD, including

“ICAD is specifically designed for medium to

the fact that sulphuric acid can be piped

heavy industry and the Gulf Fluor site has its

directly to Lepidico’s plant.

own wharf. It’s got all the infrastructure and services that we need for our Phase 1 project.

“This is the first time we’ve had an opportunity to locate an L-Max® plant on the


MINING | Lepidico


Resource Global Network “We also completed a study evaluating

Finally, Lepidico undertook a renounceable

whether regional markets exist for our by-

rights offer to raise up to AUS$10.8 million

products. Given the level of construction

which will go towards for the integration of

and agricultural activity happening in the

Desert Lion into the business, the evaluation

broader region, we identified that there are

of Abu Dhabi into the feasibility study for the

sizeable markets for both SOP fertiliser and

Phase 1 plant, the engineering of LOH-Max™

amorphous silica, which can be used as a

into the plant design, plus further resource

building material.”

development and exploration work.

ICAD also has a ‘plug and play’ approach

This neatly encapsulates the intense

towards new industrial developments, which

transformation of Lepidico’s business during

means that the approvals and permitting

the first six months of 2019. It has pivoted

process is expected to be able to be

towards lithium hydroxide production with

completed within three to four months.

the advent of a new processing technology,

Integrating ICAD

become a vertically integrated lithium company and taken the first steps to

Lepidico is currently working on an ICAD

establishing its operations in an exciting, high

trade-off study that will fully evaluate the

growth potential location.

prospect of a plant development in Abu Dhabi. Until the study is completed in late 2019, Lepidico will continue to use the basecase scenario of locating the Phase 1 plant in Canada. Therefore, the company’s ongoing evaluation of a plant development in Abu Dhabi, along with its incorporation of LOH-Max™ capabilities into the Phase 1 plant has meant that the final feasibility study for the plant is now due in the first half of 2020, at which point Lepidico will seek to finalise its offtake and financing agreements.

ASX:LPD

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Published by Anderson Murray Media Ltd

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