Lepidico Lures Investors Into A New Galaxy Where Lithium Is Free
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No one much cared earlier this year when there was a particularly nasty takeover battle between Lithium Australia (LIT) as the suitor and Lepidico (LPD) as the target.
The pair are looking to disrupt the lithium market, built as it is on hard-rock spodumene concentrates and subsurface brines, with their separately developed hydrometallurgical processes that have lithium-bearing micas as the starting point.
Lepidico saw off the hostile scrip-bid from LIT in fine fashion, with the bruised LIT since selling down its 17% Lepidico shareholding to less than 7%. Still no one really cared.
But that all changed on October 10 when the $1.45 billion lithium hard-rock producer and brine developer Galaxy Resources (GXY) gave a ringing endorsement of Lepidico’s breakthrough hydromet process known as L-Max.
The endorsement came in the form of Galaxy taking up a $2.9m placement of Lepidico shares at 1c each, giving it a 12% stake and ranking it just behind the developer of the L-Max process, Strategic Metallurgy, which has 14.3%.
Galaxy is also a sub-underwriter to Lepidico’s current one-for-six rights issue at 1c to raise $4.05m and theoretically it could get to a 16.4% stake. But Lepidico has raced off to 3.1c a share since the Galaxy placement, so the sub-underwriting is unlikely to be called on.
On a fully diluted basis, Lepidico is going to have some 2.97 billion bits of paper out there. So while the share price suggests we’re talking about small beer here, Lepidico has become a $92m company.
And it is little wonder too given the disruptive potential of its L-Max process to produce zero cash cost lithium carbonate for the world’s booming lithium-ion battery makers, all from a new source rock.
The basis of the L-Max process is the leaching of lithium-bearing mica ores like lepidolite with hot sulphuric acid at atmospheric conditions.
It involves a series of crystallisation and precipitation steps in which lithium is separated from the leach liquor impurities.
After removing the impurities the leach liquor contains mostly lithium sulphate. The desired product, lithium carbonate, is precipitated using sodium carbonate. But there is a whole bunch of other high- value saleable products precipitated off during the process – sulphate of potash, sodium silicate, caesium and tantalite.
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