ASX-listed lithium technology company Lepidico calls in administrators

A Perth-based company with the catchphrase "leading the next lithium cycle" has been unable to ride out a lull in prices for the precious mineral, with Lepidico (ASX: LPD) calling in voluntary administrators after failing to secure financing for a sub-US$50 million integrated project and concentrator in Namibia. 

The directors of Lepidico, which listed on the ASX in 2016 via a reverse takeover and had a market capitalisation of $17 million before share trading was suspended recently, have appointed Richard Tucker and Paul Pracilio of KordaMentha as voluntary administrators for the group and various subsidiaries.

"The directors regrettably determined to place the companies into voluntary administration following unsuccessful attempts to secure financing for the Karibib Lithium Project and mineral concentrator," KordaMentha wrote in a statement to the ASX.

"The administrators intend to continue the sale and recapitalisation campaign that the companies had begun prior to their appointment. During this time the administrators will work closely with management and employees of the companies to assess the status of operations and preserve value."

The company describes itself as a "global leader in sustainable lithium mica processing" with its patented L-Max and LOHMax technologies that can extract lithium - a key component of the electrification economy and other advanced technologies - from lepidolite.

It claims the technologies deliver superior product quality and have "excellent associated environmental and social credentials". As recently as September Lepidico announced its technologies would be licensed to a £9 million ($17.7 million) demonstration plant to process lithium mica in Cornwall in the UK.

But the group has accumulated losses of more than $52 million, $7 million of which were recorded in FY24, on its path to build an integrated project that incorporates this tech, involving shipping of lepidolite-rich concentrate from Namibia to a chemical plant in the UAE that would process lithium using Lepidico's tech.

The current low price of lithium would have likely played an important role in the decision-making processes of Lepidico's prospective financiers, but at the annual general meeting (AGM) in November Lepidico's longstanding chairman Gary Johnson was hopeful that prices were "forming a trough" as "as the high levels of inventories throughout the electric vehicle supply chain have started to reduce".

"Within this environment Lepidico has continued to implement its strategy to secure a strategic partner for the development of the Karibib Lithium Mica Project in Namibia, and also advance its proprietary process technologies to commercialisation," Johnson said at the time. 

"The prospective partner for the integrated Phase 1 Project that Lepidico was engaged with this time last year had its lithium-ion battery supply chain development plans in Europe undermined, necessitating a recasting of its strategy which no longer aligned with the Phase 1 Project timeline.

"This led Lepidico to pivot its own strategy to a lower risk staged implementation, with the Karibib lepidolite concentrate development prioritised ahead of the downstream chemical plant."

He noted that Jefferies International had been engaged to secure a partner for the Karibib project, and was encouraged by the UK deal with Cornish Lithium for a development that was funded by the UK Government and two institutional investors.

Despite these best plans, the announcement was made today - less than a month since the AGM - that voluntary administration would be a necessary process.

According to the group's FY24 annual report, Lepidico had net assets of $88.5 million and total liabilities of $13.5 million. The company spent $5.2 million on payments to employees and suppliers during the year, and more than $2 million on exploration and evaluation activities. 

By the financial year close it had cash reserves of $4.7 million, compared to $10.8 million a year prior.