Lithium Power International has positioned itself as a frontrunner in the race to meet increasing future demand for lithium driven by technologies used in the daily lives of people around the world.
Lithium is one of the few commodities which is trading higher now than in 2011, which is pushing investment into the sector.
The lithium market continues to demonstrate strong demand and tight supply, with market growth of >10% year on year.
Proactive Investors is joined exclusively in the first of a series of interviews with Lithium Power’s CEO, Martin Holland.
PROACTIVE INVESTORS: Welcome Martin.
First of all, why was Lithium Power International formed and can you outline assets currently sitting within the company?
Martin Holland: Lithium Power International Limited (LPI) was formed to utilise some of the latest innovations in geosciences to target areas in Western Australia prospective for the discovery of a new Lithium ore-body.
LPI has tenement applications totalling 470 square kilometres, located in the two areas well-endowed with rare element pegmatite related lithium.
One being the Greenbushes area which is host to the one of the world’s largest known lithium/tantalum deposits and the other the East Pilbara region, where combined resource of 67 million tonnes at 1.20% Li2O have been defined in the space of just four years.
This has been done by Pilbara Minerals (ASX:PLS) whose share price has increased six fold in the past few months, Altura Mining (ASX:AJM).
LPI will also position itself to acquire a major Brine Lithium project in Atacama salt flat in northern Chile and Argentina.
Why is the position of the company’s Western Australian assets strategically important?
Martin Holland: LPI’s application area in the Pilbara is adjacent Pilbara Minerals and Altura Mining, which lie just 2.5 kilometres and 3.5 kilometres east of LPI’s Pilgangoora Houston Creek Project.
Furthermore, LPI’s Greenbush application area is adjoining the Talison Lithium project.
Talison and its predecessor companies have been producing lithium from the Greenbushes Lithium Operations for over 25 years.
The Greenbushes area is recognised as the longest continuously operated mining area in Western Australia.
The Greenbushes Lithium Operations has two processing plants, one producing technical-grade lithium concentrates and one producing chemical-grade lithium concentrate.
Ore containing 3.0% to 4.5% Li2O is fed into the processing plants which upgrade the lithium mineral, using gravity, heavy media, flotation and magnetic processes, into a range of lithium concentrates for bulk or bagged shipment.
What exploration approach will Lithium Power International take?
Martin Holland: LPI’s landholding lends itself well to taking a new approach (for these areas) to rare pegmatite exploration, one focused on looking not just for surface exposures or rare element pegmatites, but opening up the potential discovery of those pegmatites located in proximity to, but below, the current ground surface.
Study of approaches to rare element pegmatite exploration shows systematic development of knowledge and techniques over several decades, at places like Burnic Lake in Canada, will allow LPI to implement a robust exploration strategy that has not thoroughly been applied to rare element pegmatite exploration in Western Australia.
An aggressive approach to exploration across LPI’s large landholding has been formulated, with an associated budget covering the first two years of exploration.
Why is LPI also targeting Argentina, and is it difficult to operate in South America from Australia?
Martin Holland: Argentina is home to one point of the Lithium triangle, which also includes Chile and Boliva.
This triangle is considered the home of global lithium resources.
Lithium in this area comes from brines, and in Australia lithium comes from hard rock (spodumene), which is generally more expensive to produce.
LPI has taken a diversified approach between spodumene and brines, to supply all global markets and have a medium price of production.
There is also significant global investment entering for lithium in Argentina, such as Orecobre (ORE.AX) who recently raised $32.3 million for their Argentine Olaroz Brine Lithium asset.
Furthermore, the ADY Resources group plans an investment of US$350 million in order to increase production of lithium on their Argentine, Salta province asset.
Argentina is also in the process of appointing a new President on the 25th October 2015.
Daniel Scioli is the front-runner in the race to become the next president of Argentina.
Among the three candidates, Scioli proposes the most continuity with and least change from the policies of President Fernández de Kirchner and Macri the least continuity and most change, with Massa occupying an intermediate position between the two.
As a result, the electoral process will have a profound impact on the extent to which Argentina adopts more market-friendly policies and endeavours to foster better relations with the United States during the remainder of the decade.
How is the company currently funded, and what is a potential IPO-timeline?
Martin Holland: LPI went live to the market on the 24th September to raise pre-IPO funding of $750,000.
The offer was closed two times oversubscribed the following day, and we have a plan to IPO early in 2016.
LPI closed the pre-IPO funding offer at $1.1 million in cash at a market capitalisation of circa A$4.7 million.
If an investor was interested in gaining a stake in the company, how could this be done?
Martin Holland: The company is in the process of preparing our prospectus for an IPO listing early in 2016.
We are in discussion with strategic partners whom are looking to cornerstone or joint venture with LPI.
If an investor was interested in opening a discussion prior to IPO I would advise to email info@lithiumpowerinternational.com
Finally, what is Lithium Power International’s board composition and what specific keys does each member bring?
Martin Holland: LPI has strategically built a board and advisory team surrounded with a wealth of lithium experience in South America with the two major global Lithium companies.
Our board of directors and management team bring a proven track record in mining, mining exploration, strategic transactions, technical, legal and financial management.
PROACTIVE INVESTORS: Thank-you Martin.
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