Lithium Power Executive Director and CFO Andrew Phillips: Strong Financials for the Maricunga Project in Chile

Lithium Power (ASX:LPI) Executive Director and Chief Financial Officer Andrew Phillips discussed the company’s Maricunga project in the Lithium Triangle of Northern Chile.

Lithium Power owns 52 percent of the project site, which is positioned next to Bolivia and the northern border of Argentina. The company partnered with Milan Isolo Blanco and a private Chilean office, along with experienced businessman Martin Bordeaux.

“We’ve done three drilling programs over time and we've got a resource edge of over 3 million tonnes of lithium carbonate equivalent. We have done an update to our definitive feasibility study (DFS). After deciding in early 2021 to do a stage approach to the development, we did a further drilling program, to a depth of 40 metres,” Phillips said.

“We increased our resources under the project area that we decided to focus on initially. From there, the DFS was updated — and the numbers are very compelling. The pre-tax NPV is over US$2 billion and US$1.45 billion post tax,” Phillips noted. Continuing to highlight the value, he said, “Look at the post tax — it's about a 40 percent internal rate of return (IRR). It’s a two year payback period on the CAPEX to build the project of US$626 million, so they’re pretty compelling numbers.”

Speaking to next steps, Phillips said, “We’re licensed to explore and to export lithium carbonate — we’re ready. We're fully permitted with our environmental impact assessment report. So now we're going down the track of attracting funders to help us build the project.”

In terms of financing options, Phillips refers to the options as a "blank paper," continuing to say, “We have a non-bonded memorandum of understanding (MOU) with Mitsui, the Japanese conglomerate. Lithium Power wanted to de-risk the project as much as possible — we know that one of our biggest assets is our future production.

“The far-reaching MOU was announced in May, allowing offtake for project funding through the network of other guests, Japanese banks and European banks, as well as equity stake in the joint venture company, so that’s all on the table. And now that the DFS is being finalised, they're wrapping up the due diligence process with tests of our brine in Tokyo.”

Looking to the future, Phillips said, “There is going to be construction for about 12 months … This is a good time for investors to be looking at the company. We know once we ink a deal, with Mitsui or whoever may finalise with us, the industry is going to get turbocharged by some very good lithium.”

Watch the full interview of Lithium Power CFO Andrew Phillips above.

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