Lithium Power International (ASX:LPI) Research Update

Highlights:

• Arrowhead is updating its coverage on Lithium Power International Ltd. (“LPI”) with a fair value bracket of AUD 0.79 – AUD 0.97 (Share Price on 4 October, 2022: AUD 0.56) based on Discounted Cash Flow Valuation and Company Comparable Valuation
• LPI is a pre-revenue pure play, diversified lithium exploration, and development company involved in acquiring and advancing promising lithium projects. The Company currently has five assets – one brine asset in Chile, four hard rock assets, and two tenements in Western Australia (WA). The Company is planning to spin out its Pilgangoora and Greenbushes assets within the next few months and create a new WA-focused lithium exploration company for these assets
• Currently, LPI’s flagship project in Chile is under a JV named Minera Salar Blanco S.A. (MSB) between LPI, Borda Group, and Bearing Lithium (TSXV: BRZ). On June 22, the Company announced that it will consolidate the remaining 48.45% of the project, leading to a 100% ownership in the MSB project of LPI. As per the revised DFS on Old Code Concessions, the Stage One project can produce an average of 15,200 tonnes of battery-grade lithium carbonate per annum for 20 years
• MSB has signed a non-binding Memorandum of Understandings (“MoU”) with Japan’s Mitsui & Co., Ltd. (“Mitsui”) for the project’s further development. The Mitsui MoU grants offtake and financing rights for MSB’s Stage One development as well as future development to Mitsui
• Lithium is primarily used for manufacturing lithium-ion batteries used in Electric Vehicles (“EVs”), mobile phones, tablets, grid-level mass storage systems, etc. The demand for these batteries has grown significantly in recent years due to the growing demand for these products and is likely to continue growing sharply
• LPI is currently focusing on arranging financing for MSB’s Stage One construction and is likely to continue acquiring more promising lithium tenements in Chile and Australia in the long term. On September 16, 2022, the Company raised AUD 25 million from institutional investors to develop, expand, and accelerate the Maricunga project