Sydney, May 11, 2017 AEST (ABN Newswire) - Lithium Power International (
ASX:LPI) (LTHHF:OTCMKTS) are developing the Maricunga lithium brine project in Chile. Maricunga is one of the highest grade lithium brine projects globally (1,250mg/l), has the highest publicly released flow rate for a lithium project in South America (25L to 38L / sec) and is supported by significant existing infrastructure (roads, power & work force).
The company recently completed an 18 hole-drill program to expand the current resource (574kt LCE). The results were impressive, as the average grade exceeded 1,000mg/l, whilst mineralisation extended from surface to 360m. The resource upgrade is due in 2Q17. This will be followed by pilot plant testing, a Preliminary Economic Study by the end of 2017 and a Definitive Feasibility Study during 2018.
Analyst Comment: With a string of excellent exploration results earlier this year that should result in a significant resource upgrade to be released in the coming weeks, Lithium Power could be on the verge of a substantial re-rating given the potential that is beginning to be uncovered at the Maricunga Project.
The exploration program exceeded our expectations, as the high grade nature of the deposit was maintained, whilst extending the mineralised zone both along strike and at depth. We believe this should see the resource at least triple in size (1.5Mt LCE - TSI assumption) in the coming months (2Q17).
This updated resource will not include the deep drill hole, which nearly doubled the depth of the known mineralisation (200m to 360m). This result highlights the long term potential for Maricunga's mine life to possibly double in size or alternatively increase the long term production target (TSI assumption - 20ktpa LCE).
Other results have also been promising. The flow test work (25L - 38L / sec) was some of the best publicly released results for a lithium brine project in South America, whilst the evaporation rate was also impressive (brine concentration increased 5 times in 3 months). The evaporation rate is important as this could potentially reduced processing time (industry average +12 months), which would either lower costs and/or increase production.
Valuation: We initiated coverage on Lithium Power with a valuation of $1.10 / share (SP $0.30 / share). We determined this valuation by completing a DCF valuation on the Maricunga Project. Full details of our valuation analysis including our key assumptions can be viewed at, http://thesophisticatedinvestor.com.au.
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About Lithium Power International Ltd
Lithium Power International Limited (ASX:LPI) is a pure play lithium company with three distinct project regions to provide diversification. One is located in South America's brine region and three are in Australia's spodumene hard rock areas of Western Australia.
The primary focus is to develop of Chile's next high-grade lithium mine on the Maricunga Salar in an area known as the Lithium Triangle. The Company has also expanded its tenement holdings of lithium exploration prospects in Western Australia.
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