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Can LPD ASX give you your money's worth?

Published by: Antonio Alagna
July 5, 2022 4:44 pm

That is a question every potential investor might be asking themselves, especially after Lepidico's big splash in January. Those who had made long-term investments in the company significantly benefited from the company's immense 16 percent return. According to a financial report, this financial breakthrough meant an increase in the shareholders' five-year gains by a whopping 303 percent!

This news naturally turned the heads of both the competitors and people looking for a good stock to invest in. If you're among the latter, you might have started your research on the company and would be considering whether Lepidico's stock is actually worth your money or not. Many of you might even be concerned about the company's future prospects and projects and whether they will help you make some dough. Some might even be hearing about the company for the first time. Well, before we get to the part where we talk about the current financial position of the company and future forecasts; let us talk a bit about the company, its brief history, and the trends in its share price over the years.

If Australia has one company growing leaps and bounds in the lithium industry, it’s Lepidico. It made its mark on the globe in 1979 as merely a lithium exploration venture, but soon, the pioneers and founders of the company realized the potential in the industry and how they could excel. Not only did they manage to set the company apart from its competitors, but they also created a big gap between them. After tasting success in its debut year, the company spread its wings and decided to diversify its portfolio. To assert its dominance in the lithium industry and to make a distinct mark, the company set up facilities to enable lithium development and production as well. 

But that was not it from Lepidico's side. The owners came up with such a brilliant idea that would further instil the company's hold on the lithium sector. That’s not where its innovativeness ends, though. The big brains at the company came up with an idea to utilize 100% owned clean-tech L-Max process technology. You might be wondering: what on earth is this term now? Well, it’s one of the best innovative and sustainable environmental solutions in this industry to extract lithium and every last bit of high-quality lithium and valuable by-products from minerals like lithium-mica and phosphate that are otherwise insignificant.  

With futurist objectives of becoming a vertically integrated business in the lithium industry that handles mining, development, and production, they’ve made a solid mark on a global scale already. Lepidico has numerous projects under its belt in a range of countries (more on that later). Along with the strategic position they have owing to joint ventures in major countries like Australia, Canada, and Portugal, they’re making a name for themselves in the lithium sector and, consequently, the Australian Securities Exchange (ASX) with its company shares. 

The company was listed on the ASX on 30th November 2016. At that time, the price of a single share was estimated at 0.02 AUD. Within the first couple of months, the share price dropped to 0.01 AUD and stayed there. A few price-sensitive announcements bumped the share price back to 0.02 AUD, but only temporarily. Things stayed like this for almost a year until the company announced the Feasibility Study for a Phase 1 L-Max plant. Moreover, the company completed an oversubscribed entitlement offer that boosted the company's finances by approximately 400 million AUD. Furthermore, a private placement of shares was made with one of the company's competitors, Galaxy Resources Limited. Due to these advancements and breakthroughs, the company's share price reached an all-time high of 0.075 AUD in November 2017. So, after being on the ASX for almost a year, the company finally found some relief and success.

Unlike many people thought and hoped, 2018 did not prove to be a successful year for the company. From 0.075 AUD for a share, the company saw a decline, and the share price tumbled back to 0.02 AUD. Although there weren't any major successes in 2019, there weren't any fallbacks either, thankfully. The share price wavered between 0.015 and 0.02 AUD. 2020 proved to be worrisome, both for the company and shareholders, as the share prices dropped to an all-time low of 0.006 AUD. 

But with 2021 came good times. In January, the company made an announcement of a high-value product off take. As of February, the owners gave the green flag for several projects. In Abu Dhabi, the company launched L-Max and LOH-Max proprietary technologies after the DFS completion of hydrometallurgical plants. We talked earlier about L-Max. LOH-Max focuses on producing lithium hydroxide from lithium sulfate. There were further developments even in the Karabib project in Namibia. In March, the Karabib mineral resource was further expanded. The June quarter also brought great news, and, finally, the company and the shareholders tasted success and stability. As of December 2021, the share price was estimated at 0.05 AUD.

In January 2022, the company announced a 16 percent return, which took the shareholders' gains to 303 percent. These numbers are big enough to grab the attention of potential investors. If you are thinking of buying Lepedico's stock, here are some things that you need to know, both about the company and the lithium industry, before deciding.

Firstly, Lepidico's Phase I project is fully permitted. The company has proved its ESG credentials, especially after the company's strategic plans for driving carbon emissions and supporting local communities. The extraction plant in Namibia and the refinement plant in Abu Dhabi have been licensed for operation. A Phase 2 project for Namibia is being planned. The company is also planning another revenue route by licensing its innovative and proprietary tech to its partners. And above all, a seven-year off take agreement with Traxys has been signed and is ready to go. So, despite several risks, as is always the case in stock exchange investment, spending in Lepidico could give you your money's worth.

The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.

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