In The News: Birimian Ltd


RFC Ambrian — Natural Resources         

Natural Resources

18 December 2018




BGS : AU | A$0.17 | US$29m | Buy | TP : A$0.55

DFS fully funded and planned to be completed by end of June 2019

Birimian has announced that it has raised A$5.95m through an equity issue at A$0.17/share and that a 1 for 20 entitlement issue will be completed early in 2019 that could raise up to a further A$2.3m. Birimian has also recently announced changes to senior management and that is has signed a letter of intent with Changsha Research Institute, a subsidiary of China Minmetals, to advance further discussions relating to the project’s finance, off-take and construction. It has also signed an MOU to discuss with General Lithium Corp of China regarding offtake over 55% of the project’s production.

COMMENT: Birimian Limited’s 100%-owned Goulamina Lithium Project in south-west Mali is one of the world’s ten largest hard-rock lithium deposits. A PFS was completed in July 2018 demonstrating the project’s potential to become a globally significant, long-life, high-return spodumene concentrate producer. The equity placement is due to be completed on 21 December 2018, and will fund the completion of the DFS, which is now due to be completed by June 2019. 

We initiated coverage of Birimian in mid-October 2018 (Birimian Limited — High-quality African Lithium Development, 18 October 2018) and maintain our BUY recommendation and Target Price of A$0.55.

Goulamina is one of the Top 10 largest hard-rock lithium deposits — Current resources total 103Mt grading 1.34% Li2O, containing 3.4Mt of lithium carbonate equivalent (LCE). The resource remains open in all directions and a number of significant targets in the vicinity remain to be tested, offering potential for further increases.

PFS showed a 54,000tpa LCE spodumene concentrate producer with a mine life of over 16 years and returned a 40% IRR — The PFS of July 2018 studied the development of Goulamina as open-pit mine and a gravity/flotation-based processing plant. The 31Mt reserve grading 1.56% Li2O (containing 1.2Mt LCE) supported production of 54,000tpa LCE contained in a 6% spodumene concentrate for 16 years. AISC were US$349/t CIF China and the initial capital costs were US$199m. At an average spodumene concentrate price of US$666/t, the PFS returned a post-tax NPV10 of US$490m and a robust IRR of 40%.


Maintaining BUY rating and target price of A$0.55 — We base our target price on a risked SotP NAV assuming a lithium concentrate price of US$666/t and a TP/NAV multiple equivalent to 0.2x. Having demonstrated attractive returns in the PFS, we believe that securing offtake arrangements, completing the DFS and finalising debt finance will significantly de-risk the project’s development and should act as a catalyst for a rerating of the company.

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