Sign up to TSI  alerts

Lithium Power - Lithium carbonate sample production at Maricunga

Feb 2018

Stay up to date with The Sophisticated Investor newsletter

Summary - Lithium carbonate sample production at Maricunga

Lithium Power (ASX:LPI) has announced the production of lithium carbonate samples from its Maricunga lithium brine project in Chile. Highlights of the announcement include the following.

  • Initial lithium carbonate sample has a purity of 99.4% and very low cation concentrations. 
  • Samples have specifications similar to those produced by Albemarle and SQM in Chile. 
  • Maricunga is one of less than half a dozen pre-production brine projects to produce lithium carbonate samples.
  • WorleyParsons is well-advanced with the definitive feasibility study.
  • The project’s environmental impact assessment is progressing towards submission in the first quarter of 2018.

Analyst comment: this is another significant milestone in the development and validation of Maricunga. It further confirms our belief in it as a standout lithium brine project globally.

As is the case with most commodities, offtake negotiations with reputable partners are not meaningful until metallurgical testwork is complete and samples production-tested. And it’s potentially even more important for lithium brine projects, given that so few have produced lithium carbonate (LPI estimate – less than six).   

Lithium Power’s samples are likely to be sent to potential offtake partners, at which point negotiations may intensify. There is also the possibilty other potential offtake partners or corporate parties may emerge from the woodwork as well and request a sample. 

Further information from the company regarding potential offtake negotiations is probable in the near future. Before then, however, Lithium Power will submit its environmental impact assessment. Given the eventual surface area that Maricunga will cover, as well as its location, the importance of this assessment cannot be underestimated. We’re pleased that the company is using tier-1 environmental consultancy MWH, which has extensive experience within the project area.

The information in this email should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions. 

Valuation: we maintain our valuation of Lithium Power to $1.13/share (share price $0.46).