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Lepidico’s Karibib lithium project: Enhancing resource base for sustainable growth

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Lepidico is eyeing an extension of the operating life of its Karibib project in Namibia to more than 20 years, with a focus on a variety of metals including lithium, caesium, rubidium, tantalum, gold, copper and tungsten across its Namibian tenements.

The company is seeking to bolster its resource base to support the phase 2 scoping study and to assess the potential for gold within the Karibib licenses.

In the quarter ending March 31, 2024, Lepidico primarily conducted exploration activities, with a focus on regional and reconnaissance work within ML204 and EPL5349 due to road access issues to a priority drill target.

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During this period, Lepidico Chemicals Namibia took legal action against a local property owner in the High Court over a locked gate that prevented access to a public road. Resolution of this issue is anticipated in the June quarter, enabling access to the LCT pegmatite target containing visible lepidolite in the outcrop.

Amidst a challenging lithium price environment, Lepidico reduced its marketing activities for existing beneficiated stockpiles at the Karibib Lithium Project. However, the company remains optimistic about a potential price improvement, which could reignite supply discussions.

In response, Lepidico is considering prioritizing the concentrator and selling lithium mica concentrate to third parties before committing to the downstream chemical plant. Discussions with prospective partners for the chemical plant are ongoing.

The company has evaluated four alternative implementation options for the Karibib mine and concentrator, including EPC under an LSTK contract model, a mobile crusher, prefabricated non-process buildings, and contract mining. Additionally, exploration of a third-party renewables-based power supply remains in progress.

Lepidico is in discussions with the US Government’s Development Finance Corporation (DFC) as a potential lead lender for the Karibib development. Other development finance institutions and commercial lenders are also involved in debt financing discussions. DFC’s due diligence includes assessment of the chemical plant, despite its lending mandate being limited to Namibia.

The total capital expenditure for the Karibib options study has decreased to less than US$50 million, with an increased contingency of 20% on owner’s costs compared to previous estimates. Commercial lenders have shown preference for an EPC implementation under an LSTK model, and a mobile crusher is expected to provide flexibility in mining operations.

Contract mining is seen as a way to enhance future flexibility and sustainability in operations, including the adoption of cost-effective and environmentally friendly mobile fleet options.

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