ANNUAL REPORT 2021
A HEARTFELT THANK YOU
Considerable contributions have been made this past year by everyone in the
Lepidico team.
Given the extremely challenging conditions imposed by the COVID-19 pandemic,
particular thanks go to our people in Namibia. Each and every one of you has
moved Lepidico closer to achieving its goal of building a sustainable business
based on Namibian lepidolite reserves.
The decision to spotlight members of our Namibian team in this year’s report
reflects our debt of gratitude to all of you for your dedication and determination
to push through, regardless of the headwinds you face.
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2
3
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1 Nelson Ngovakwawo Tjakuhilwa
Field Technician
2
Shyrlock Muukua
Field Technician
3 Rudolphine /Uiras
Janitor
4 Chris Movirongo
Country Manager
5 Asser Ndjene
Camp Coordinator
6
Simon Kahovera
Exploration Manager
7 Vaino Shangenyange Shihepo
Exploration Geologist
CONTENTS
HIGHLIGHTS
CHAIR’S AND MANAGING DIRECTOR’S LETTER
LITHIUM INDUSTRY AND MARKET
PROJECT DEVELOPMENT
TECHNOLOGY DEVELOPMENT
BUSINESS DEVELOPMENT
RESERVES AND RESOURCES
BOARD OF DIRECTORS & MANAGEMENT
SUSTAINABILITY
CORPORATE GOVERNANCE STATEMENT
FINANCIAL REPORT
SUPPLEMENTARY (ASX) INFORMATION
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2021 LEPIDICO ANNUAL REPORT
1
HIGHLIGHTS
SUSTAINABILITY
• No recordable incident in 2021: Lepidico has a zero-harm health,
safety and environment track-record since records began in
September 2016.
• Third party Greenhouse Gas evaluation advises Phase 1 emissions
are, “low compared with other emission intensities reported or
derived from lithium hydroxide production facilities.” Opportunities
identified to reduce emissions to industry leading levels.
• Commitment to the Initiative for Responsible Mining Assurance
(IRMA) for independent third-party verification and certification on
social and environmental performance standards.
• Significant socio-economic benefits in the Karibib region from
creation of over 800 direct and indirect jobs, equivalent to 15% of
the local population.
• Lepidico posted its maiden profit after receipt of revenue from the
sale of its first technology licence.
STRATEGIC RESOURCE
DEVELOPMENT
• Phase 1 provides the technologies for the world’s only source of new
caesium and rubidium supply, Critical Minerals for which the U.S. is
100% import reliant; caesium supply is forecast to decline by over
40% from 2020 to 2022.
• 19 different lithium mica and lithium phosphate deposits globally
have been successfully tested for their amenability to produce
nominal battery grade lithium chemicals using Lepidico’s low
emissions technologies, unlocking significant new lithium resource
potential.
• Process technology licence package sold to Cornish Lithium for C$4
million, an endorsement of the industry competitiveness of these
technologies from both an environmental and economic perspective.
• Near mine and regional exploration targets generated and being
evaluated for lithium, caesium and gold, for which the large Karibib
property package is highly prospective.
• Resource expansion drilling started May 2021
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2021 LEPIDICO ANNUAL REPORT
PROJECT DEVELOPMENT
• EPCM works started May 2021, following contract award for the
Phase 1 concentrator in Namibia and chemical plant in the UAE
to Lycopodium, a highly experienced global engineering and
project delivery organisation.
• All permits received for Namibian development; major approvals
received for construction of the Abu Dhabi chemical plant and
land lease terms agreed.
• Phase 1 operational refinements for production of 4,900tpa
lithium hydroxide, plus caesium and rubidium sulphate;
competitive AISC estimate of US$3,221/t after by-product credits.
• Product offtakes advanced for lithium hydroxide into the rapidly
growing Electric Vehicle supply chain and caesium sulphate to
industrial users facing a significant market deficit on the near
horizon.
TECHNOLOGY
DEVELOPMENT
• L-Max® offers a far less energy intensive solution for processing lithium
mica minerals than conventional roasting, with the added benefit of
significant by-product revenues.
• LOH-Max® provides a lower emissions and lower cost solution for
direct conversion of lithium sulphate to nominal battery grade lithium
hydroxide without production of potentially problematic sodium
sulphate; also has application for spodumene conversion.
• Proprietary caesium and rubidium refining process from lithium mica
mineral sources provides a new sustainable avenue for production of
these strategic metals, which are on the cusp of dramatic supply deficit.
• Patent protection received for the L-Max® technology in Australia,
Europe, Japan and the United States, with Canada pending. Provisional
patent applications advancing for LOH-Max™ and production of
caesium and rubidium chemicals.
2021 LEPIDICO ANNUAL REPORT
3
Our evolution and future:
FROM CONCEPT TO PHASE 2
4
2021 LEPIDICO ANNUAL REPORT
The Li-mica hydromet-technology concept is formulated within Strategic Metallurgy IP spun off into newly-formed LepidicoInitial round of seed capital raisedFirst testwork successful: leach + impurity removalRound two of seed capital raisedL-Max® process development beginsProvisional patent application made in AustraliaRound three of seed capital raisedFirst semi continuous mini-plant trials undertaken L-Max® international patent filedASX listing achieved via reverse takeover 5-Year Strategic Plan publishedExecutive management team appointedPhase 1 Pre-Feasibility Study beginsInitiation of L-Max® amenability trials on third party depositsSecond mini-plant trial undertakenPhase 1 Pre-Feasibility Study completed Hostile takeover successfully defendedPhase 1 Feasibility Study initiated Toronto office openedL-Max® amenability trials continueNational phase of L-Max® patents Lithium price cycle peaksBy-product processes developed, provisional patents lodged in AustraliaPilot plant designed; construction startsLithium bear market beginsLOH-Max® process developed, provisional patent lodged in AustraliaPilot plant delivered on schedule and within budgetL-Max® viability confirmed via pilotFirst Mineral Resources via off-market takeover of TSX-V Desert Lion EnergyFeasibility Study extended to include Namibian Assets U.S. patent for L-Max® receivedAbu Dhabi selected for chemical conversion plantL-Max® patents granted in Australia, Japan and EuropeInaugural Ore Reserve report reveals that Lepidico owns the only undeveloped Cs and Rb Reserve globallyCompletion of Phase 1 Definitive Feasibility StudyNamibian permits to construct received LOH-Max® enters international patent phaseMandate letter signed with US Government’s lending institution International Development Finance CorpFirst technology licence package soldDebt retiredEnvironmental permit to construct Abu Dhabi grantedIndependent greenhouse gas assessment confirms low emissions intensityPhase 1 Project EPCM contract awarded: development works startShareholders support significant entitlement issue raising $12.5 million (before costs)Binding offtake agreementsProject debt commitments recievedFinal approvals to construct Abu Dhabi grantedFull funding package in placePhase 1 construction starts Mining beginsPhase 2 Scoping Study completedConcentrate production startsChemical production begins Phase 2 Pre-Feasibility Study completedPhase 1 Project ramp-upPhase 2 Feasibility Study completedH1H2Expectedfutureevents2013201420152021202120222023202420162020201720192018 2021 LEPIDICO ANNUAL REPORT
5
The Li-mica hydromet-technology concept is formulated within Strategic Metallurgy IP spun off into newly-formed LepidicoInitial round of seed capital raisedFirst testwork successful: leach + impurity removalRound two of seed capital raisedL-Max® process development beginsProvisional patent application made in AustraliaRound three of seed capital raisedFirst semi continuous mini-plant trials undertaken L-Max® international patent filedASX listing achieved via reverse takeover 5-Year Strategic Plan publishedExecutive management team appointedPhase 1 Pre-Feasibility Study beginsInitiation of L-Max® amenability trials on third party depositsSecond mini-plant trial undertakenPhase 1 Pre-Feasibility Study completed Hostile takeover successfully defendedPhase 1 Feasibility Study initiated Toronto office openedL-Max® amenability trials continueNational phase of L-Max® patents Lithium price cycle peaksBy-product processes developed, provisional patents lodged in AustraliaPilot plant designed; construction startsLithium bear market beginsLOH-Max® process developed, provisional patent lodged in AustraliaPilot plant delivered on schedule and within budgetL-Max® viability confirmed via pilotFirst Mineral Resources via off-market takeover of TSX-V Desert Lion EnergyFeasibility Study extended to include Namibian Assets U.S. patent for L-Max® receivedAbu Dhabi selected for chemical conversion plantL-Max® patents granted in Australia, Japan and EuropeInaugural Ore Reserve report reveals that Lepidico owns the only undeveloped Cs and Rb Reserve globallyCompletion of Phase 1 Definitive Feasibility StudyNamibian permits to construct received LOH-Max® enters international patent phaseMandate letter signed with US Government’s lending institution International Development Finance CorpFirst technology licence package soldDebt retiredEnvironmental permit to construct Abu Dhabi grantedIndependent greenhouse gas assessment confirms low emissions intensityPhase 1 Project EPCM contract awarded: development works startShareholders support significant entitlement issue raising $12.5 million (before costs)Binding offtake agreementsProject debt commitments recievedFinal approvals to construct Abu Dhabi grantedFull funding package in placePhase 1 construction starts Mining beginsPhase 2 Scoping Study completedConcentrate production startsChemical production begins Phase 2 Pre-Feasibility Study completedPhase 1 Project ramp-upPhase 2 Feasibility Study completedH1H2Expectedfutureevents2013201420152021202120222023202420162020201720192018 CHAIR’S AND
MANAGING DIRECTOR’S LETTER
THE VIEW FROM YOUR BOARD
ACCELERATION ALL ROUND
Great progress has been made since last we wrote.
You will already be aware that the lithium cycle has
comprehensively turned and is now substantially in
Lepidico’s favour. As growth in demand for electric vehicles
accelerates exponentially, demand estimates for lithium
continue to be upgraded. While market prices have already
captured significant ground in recent months, we believe
they are a long way from their eventual peak.
Our confidence is underpinned by the emerging consensus
that a long-term undersupply of lithium seems certain.
Some commentators have even advised that market
deficits have already emerged.
Unsurprisingly in this environment, our prospective
customers are increasingly concerned to secure new sources
of the chemical. The most immediate result for Lepidico is
our news on binding offtake agreements for our Phase 1
plant products, 18 months ahead of Project commissioning.
Our focus is on long term contracts with established
consumers in the EV supply chain in the case of lithium, for
which negotiations have advanced well over the year.
The impact of our revenue broadening strategy is also
making its presence felt.
Lepidico’s L-Max® process means we can produce other
chemicals - including caesium and rubidium. Four of
these compounds are on the U.S. State Department’s 35
Critical Minerals List. By October 2020 this had persuaded
the administration’s International Development Finance
Corporation (DFC) to begin evaluating the provision of
debt finance for our Namibian operations. This process is
now in confirmatory due diligence.
Interest in our caesium remains high because the markets
are volatile, with world supply being materially impacted
as a major producer ceases operations. With their
primary feedstock depleted, just one major manufacturer
of caesium and rubidium chemicals remains globally.
Lepidico’s technologies allow us to become the second
- our Phase 1 Project is the only new source of these
strategic metals that is shovel ready.
Such high levels of confidence in demand for our products
has, of course, supported our aggressive supply-side
timetable.
With commercial terms agreed, we began Phase 1
development in May with engineers Lycopodium. This in
turn allowed further capital to be raised, maintaining the
build-out momentum towards free cash flow generation.
We are very grateful for sharehlders' vote of confidence in
supporting their company financially.
The DFC application, coupled with export credit and
commercial lending, are planned to ensure the most
competitive finance terms for the Project. Our technology
and strategy reduce scale-up and funding risk, allowing
the Project focus on product quality rather than volume.
All other streams are also making swift progress.
The Namibian developments are fully permitted and
environmental approvals have been received for the
chemical plant construction at the Khalifa Industrial Zone
in Abu Dhabi - with a full ESIA completed to International
Finance Corporation Standards to support debt funding.
Development Finance Institution debt is, of course,
only possible because part of our Project is located in a
developing economy and because it has compelling ESG
credentials.
6
2021 LEPIDICO ANNUAL REPORT OUR CONFIDENCE IS UNDERPINNED BY THE
EMERGING CONSENSUS THAT A LONG-TERM
UNDERSUPPLY OF LITHIUM SEEMS CERTAIN.
Land use, water intensity and greenhouse gas emissions are
the three main environmental concerns for our industry and
its stakeholders, particularly financiers but also customers.
We have made significant progress on all three this year.
Firstly, a leading industry environmental consultant, GHD,
completed a greenhouse gas assessment of the integrated
Phase 1 Project. It advised our chemical plant emissions are
low for the industry. In addition, it should be remembered
that Lepdico’s LOH-Max® provides an elegant solution for
direct production of lithium hydroxide. It reduces energy
consumption and avoids the production of problematic
sodium sulphate, inherent in conventional spodumene
conversion.
Environmental and social studies of our Namibia and
Abu Dhabi operations have also been finished. They
demonstrate the Project will meet the stringent Equator
Principles and IFC Performance Standards. In fact, the
Environmental and Social Management Plan, completed
for the mines and concentrator at Karibib, validated
material environmental improvements at these previously
abandoned industrial sites. Considerable social benefits
from the creation of over 100 jobs, as well as an estimated
800 indirect employment opportunities, will create a major
boost to the local economy and communities leading to an
array of quality of life benefits.
Looking ahead, Lepidico is now planning to achieve
best-in-class CO2 performance. Innovative alternatives
for affordable green power and process heat generation,
which are ideally suited for remote industrial locations, are
being evaluated. We are also working with Lycopodium to
futureproof the Phase 1 chemical plant with multi-capability
equipment and tie-in points to retro-fit alternatives as soon
as they become commercially available.
Meanwhile, trade-off studies into replacing natural
gas with green hydrogen or solar for process heat are
underway, which could more than halve the total emissions
from Phase 1. In addition, cutting-edge solar options are
being evaluated for both the Karibib and Abu Dhabi sites
to provide off-grid renewable power.
Of course, there have been challenges this year. Care of our
staff and contractors during the pandemic necessitated the
adoption of flexible work. Our people in Namibia were most
affected. Cases of the virus were reported, initially off-site
and subsequently on-site. It is a great relief that all of the
team recovered well. Everyone has been encouraged to be
vaccinated, although their personal preferences have been -
and will continue to be respected.
As we consider the year to come it is with a view of
remaining firmly focused on delivering Lepidico’s objectives.
The business is driving forward to free cash flow generation.
We will continue to leverage our unique position to become
the first mover in new sources of specialty chemicals that
are either in short supply or, in the case of lithium, projected
to be.
In doing so we also remain committed to a sustainable
business model. Implicit in this are industry best practice
protocols in the areas of health, safety, the environment,
human resources, sustainability, and stakeholder
engagement. Lepidico is also striving to be an industry
leader in minimising waste generation and emissions, with
the objective of the Phase 1 chemical plant ultimately being
a zero-waste facility and the Company’s mines not requiring
dedicated tailings storage facilities.
We again thank shareholders for another year of
outstanding support on our quest to build a new vertically
integrated chemical company manufacturing quality
products for the twenty-first century.
Yours Faithfully
Gary Johnson, Chair and
Joe Walsh, Managing Director
7
2021 LEPIDICO ANNUAL REPORT THE LITHIUM INDUSTRY
AND ITS MARKETS
THE WHAT:
TIGHTENING CONDITIONS,
HIGHER PRICES
“…the market is set to face structural issues
from 2021 onwards. Without significant
supply-side developments, chemical
availability poses a major bottleneck risk
to battery production growth. We expect
higher price levels to incentivise further
investments by late-2021.”
- Benchmark Mineral Intelligence (BMI)
After nearly three years of decline, expectations of a
dramatic turnaround in supply-demand fundamentals
have entirely transformed lithium prices and profitability
for producers.
Given upgraded demand estimates, analysts have
realised that a more than six-fold increase in global
supply would be required to meet anticipated growth
between 2020 and 2030. This is equivalent to ten new
chemical plants with annual outputs of 20,000 tonnes
being opened every year - for the next nine years - to
balance supply and demand.
This emerging deep market imbalance is already
manifesting itself. Surpluses in stockpiles during late 2020
have now dissolved. Capacity cuts and delays in new
projects triggered by three years of low prices means
supply is now struggling to match current demand. Which
means current market conditions are tight; commentators
are predicting outright deficits from as early as late 2021.
The impact on prices has been immediate. Posting cycle
lows during late 2020, spot lithium hydroxide prices
have more than doubled in less than 12 months - to
over US$20,000/t. Meanwhile contract prices jumped
meaningfully in the June quarter and the demand outlook
is extremely strong according to producer reports.
THE WHY:
EXPONENTIAL DEMAND GROWTH
Electric vehicle (EV) sales continue to be the key demand
driver for battery materials. EV adoption rates are now
growing faster than many predicted even a year ago.
EV sales totalled 2.5 million units in the six-months to
end June 2021, a 164% increase over the prior period.
According to industry commentator Rho Motion, EV sales
are expected to reach 14.6 million units by 2025, which
would equate to a 14.2% penetration rate. Further, BMI
forecasts EV demand to increase by 35% from 2021 to
2022 and a compound annual growth rate (CAGR) of 26%
over the coming 10 years. Many other commentators are
continuing to revise their EV adoption estimates upwards,
supported by increasingly aggressive electrification
targets by automakers and governments, particularly in
North America and Europe. Brazil, Canada, Japan, Italy,
South Korea and Mexico amongst others have selected
a 30% electric vehicle sales target by 2030, while France,
Germany, India, Israel, The Netherlands, Norway and the
UK have stated they propose to end internal combustion
engine vehicle sales between 2030 and 2040. Most
recently, the U.S. has set a target for new light vehicle sales
of 50% being electric by 2030.
THE RESPONSE:
INVESTORS TURN TO LITHIUM
EQUITIES
Naturally, investor sentiment towards current lithium
producers followed suit. After hitting its cycle low in March
2020 the Global X Lithium & Battery Tech ETF broke
out of its historical trading range posting new highs by
November 2020 and by 30 June 2021 had appreciated
nearly four-fold. The initial upward momentum in this ETF
was largely driven by the downstream technology names
involved in battery and cathode manufacture, however,
this rapidly progressed upstream into the raw materials
producers. Subsequently investor interest found its way
into the industry’s developers including Lepidico.
Given the long-term undersupply, the market
environment for new high quality lithium projects is
also very positive. Lepidico’s share price made gains
on sale of our first technology licence, allowing the
retirement of a C$4.0 million commitment in December
2020. Sentiment improved further in August 2021 on
publication of our first independent stockbroker report.
8
2021 LEPIDICO ANNUAL REPORT THE LONGER-TERM:
UNDERSUPPLY AND HIGHER
PRICES TO REMAIN
FURTHER UPSIDE:
CAESIUM & RUBIDIUM
BMI forecasts demand in 2030 will be more than 2.3 million
tonnes. This implies a supply deficit of almost 1 million
tonnes of lithium carbonate equivalent (LCE), as producers
struggle to bring new projects on stream.
With the depletion of several sources of pollucite, the
main mineral source of these strategic alkali metals, one
of the two major manufacturers of caesium and rubidium
chemicals will cease production later this year.
BMI also advises that the timeframes for production
expansions, let alone new project developments, will
continue to challenge the industry. This implies healthy
incentive prices will be required to ensure new projects are
committed to. They will also have to meet the ever more
stringent environmental and social criteria demanded by
many investors, legislators and auto manufacturers.
There is also significant structural change in the caesium
and rubidium markets.
Annual demand for caesium is estimated to range between
1,000t and 1,200t, with a c.40% decline in supply expected.
This is driving some consumers to look more closely at
rubidium as a substitute.
Lithium mica minerals, in particular lepidolite, represent
an alternative mineral source of caesium and rubidium.
Lepidico’s process technologies provide an elegant and
environmentally responsible solution for the production of
caesium and rubidium chemicals.
Our Phase 1 is designed to produce up to 200t annually of
caesium in chemical and is the world’s only new project on
the cusp of development.
Prices (January 2016 - August 2021)
Lithium price
US$/t
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Jan ‘16
Jan ‘17
Jan ‘18
Jan ‘19
Jan ‘20
Jan ‘21
Lepidico share price
Lithium Hydroxide (min 56.5%)
Lithium Carbonate (min 99.5%)
Source: BMI, ASX
Share price
AUD
0.08
0.06
0.04
0.02
0
Aug ‘21
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2021 LEPIDICO ANNUAL REPORT
PROJECT DEVELOPMENT
Operating costs for the integrated Project after credits from
by-products are competitive with an average C1 cost of
US$1,656/t LCE and an AISC of US$3,221/t.
Development capital of US$139 million includes a 13.6%
contingency and is split approximately 30/70 between
(i) the mine and concentrator in Namibia; and
(ii) the Abu Dhabi chemical conversion plant.
Capital intensity is industry competitive for an integrated
hard rock project at US$27,900/t LCE and just
US$17,400/t LCE net of by-products.
Lithium hydroxide monohydrate represents 62% of the
Project revenue under the assumptions used. The lithium
hydroxide monohydrate price forecast has been provided
by BMI, which averages $13,669/t over the Project life and
reverts to a long-term price of $12,910/t (real).
The Capital cost estimates meet the Association of
the Advancement of Cost Engineering (AACE) Class 3
requirements for a Feasibility Study. The nominal accuracy
is +/- 15%. The estimates for the processing plants were
prepared by Lycopodium. Underlying engineering is
informed by some six years of process development
testwork including continuous pilot plant trials conducted
in 2019.
Lepidico has positioned its
Phase 1 Project as an early
mover in the new lithium
demand cycle.
PHASE 1 PROJECT UPDATE:
DRIVING TO CASH FLOW
GENERATION
Development for the mineral concentrator and chemical
conversion plant started in May.
Lycopodium Minerals Pty Ltd (“Lycopodium”), a leader
in integrated engineering, construction and asset
management for mineral processing and chemical plants,
has been awarded the Engineering Procurement &
Construction Management (EPCM) contracts.
At fiscal year end, early services and Front-End Engineering
and Design (FEED) work was well advanced. Construction
is planned to start in early calendar 2022, once project
finance and offtake agreements for the major products
are finalised. Mining is scheduled to start in Namibia later
in 2022, followed by concentrator commissioning in the
first half of 2023 and chemical plant commissioning in Abu
Dhabi targeted to start three months later on receipt of the
first concentrate.
Vertical integration means that Phase 1 will reap the full
value chain benefits - from ore mining to fine chemical
manufacture - via our proprietary hydrometallurgical
technologies that include L-Max® and LOH-Max®.
THE FUNDAMENTALS:
CORE PROJECT PARAMETERS
Phase 1 involves the production and shipment of lepidolite
concentrate from Namibia to the chemical conversion plant
at KIZAD in the United Arab Emirates. The conversion plant
has a concentrate capacity of 6.9tph (tonnes per hour),
capable of producing 5,600tpa. Average annual Phase 1
Project (P1P) output is estimated at 4,900tpa of battery
grade lithium hydroxide monohydrate, along with a suite of
high-value and bulk by-products.
Total production is estimated at over 7,000tpa LCE, when
converting by-products to lithium equivalents. This relatively
modest scale by industry standards is an important part of
Lepidico’s strategy to grow, whilst managing development
and operating risks for stakeholders.
Attractive investment fundamentals for the P1P include an
NPV8% of US$221 million (A$340 million) and an Internal
Rate of Return of 31% ungeared.
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2021 LEPIDICO ANNUAL REPORT
11
2021 LEPIDICO ANNUAL REPORT Collins Cheboi, graduate metallurgist
12
2021 LEPIDICO ANNUAL REPORT TECHNOLOGY DEVELOPMENT
MINES & CONCENTRATOR:
MINIMUM DISTURBANCE,
MAXIMUM EFFICIENCY
Our upstream operations in Namibia, are designed to
maximise the use of land disturbed by previous mining
activities.
With the redevelopment of two modest scale open pit
mines at the Rubicon and Helikon 1 deposits, we will focus
on mining the high grade ore zones to maximise early
cash flow.
A small fleet of one 50-tonne excavator and three 35 tonne
trucks can adequately support the schedule for the first half
of the mine life. Ore will be blended before the concentrator
to optimise production and quality.
Helikon 1 will be a satellite pit located c.7km from the
concentrator, which will be adjacent to Rubicon. The haul
road from Helikon 1 is already developed and conventional
trucks will be used for haulage.
Mine waste from the Helikon 1 pit will be placed into its own
Waste Management Area (WMA), constructed immediately
to the south of the pit and up dip of the pegmatite
structures to avoid sterilisation of any deposit extensions.
Rubicon mine waste will be placed in a separate WMA
immediately to the east of the open pit. There it will be co-
disposed with filtered tailings from the mineral concentrator
and used to construct the walls and to cap the facility at
closure. This approach minimises land disturbance, water
use and project closure costs. It will leave a stable structure
that can be returned to agricultural use.
The mineral concentrator will use conventional crushing,
grinding, desliming and froth flotation processes followed
by dewatering of concentrate and tailings streams. 85% of
the water is recycled from the filters.
The lithium principally occurs in lepidolite, amblygonite
and lithian muscovite which lend themselves to
concentration via conventional flotation. The overall
recovery of lithium to the lithium concentrate is 80-90%, at
a concentrate grade of 2.9%-4.2% Li2O. These values vary
according to the mineralogy.
The concentrator will go through progressive minor
upgrades during the operating life to cater for a declining
head grade.
The general approach to engineering has been to utilise
pre-engineered modular plant for the major concentrator
sections including crushing, grinding, flotation, dewatering
and services. This minimises the amount of project-specific
engineering. The equipment can be supplied pre-assembled
and skid mounted or containerised, reducing construction
effort and commissioning time.
Concentrate from Karibib will be bagged and containerised
to prevent contamination during its journey to Abu Dhabi
for chemical conversion. Five truck movements per day
will be required to transport the concentrate bags, 220km
to the port of Walvis Bay. From here it will be shipped to
Khalifa Port, the main container terminal for Abu Dhabi.
KIZAD, where the L-Max® plant will be constructed, is a
purpose-built industrial free zone adjacent to the port.
Abu Dhabi City is located approximately 70km to the
southwest and is serviced by a well-developed road
network and, in the future, rail.
CHEMICAL CONVERSION
PLANT:
PATENTED LOW-ENERGY
INTENSITY
L-Max®, Lepidico’s first proprietary process technology
was developed over six years through an extensive series
of laboratory, mini-plant and pilot programs. Further
refinements to the process continue to be made from the
Company’s R&D and licencing activities.
Coupled with extensive flowsheet modelling and vendor
testwork, a robust process has evolved that produces
lithium chemical, high value by-product chemicals of
caesium and rubidium (extracted by a separate proprietary
process) and a range of bulk by-products, in an efficient low
energy approach.
Patent protection was received in fiscal 2020 for L-Max® in
Australia, Europe, Japan and the United States.
The Phase 1 chemical plant is designed to process
56,700tpa of lithium mica/amblygonite concentrate at a
feed grade of up to 4.0% Li2O - for production capacity of
5,600tpa of lithium hydroxide.
The overall lithium recovery from concentrate to lithium
hydroxide is estimated at 90%.
During the L-Max® process direct leaching of the input
mineral from the feed negates the need for energy
intensive thermal or elevated pressure treatment steps,
which are required by many other hard rock lithium
conversion processes.
Optimising leach conditions has been an important part
of our R&D. Very little energy is now required to keep the
process at temperature.
Handling of the leached slurry is a unique part of the L-Max®
process. Filtered at moderate temperature the slurry yields
a solution containing the valuable alkali metals and a silica-
rich filter cake. Effective washing of this cake achieves high
lithium recovery to the liquor moving downstream.
13
2021 LEPIDICO ANNUAL REPORT
Amy Jones, Metallurgical Technician
Chemical conversion plant
key features:
• Six years of development
including mini plant and pilot
plant manufacture of products
• Employs common use low-cost
reagents
• Multiple products maximise
revenue and minimise waste
• Low temperature and
atmospheric pressure leach
with no roasting stage required,
allowing for relatively low energy
intensity and modest greenhouse
gas emissions
• Conventional processing
equipment and non-exotic
materials of construction
• Relatively short equipment and
construction lead time.
The filtered leach liquor, which is also rich in aluminium,
is cooled - crystallising an alum solid. This step achieves
the separation of lithium from potassium, rubidium and
caesium.
With further filtration the potassium, rubidium and caesium,
and most of the aluminium, reporting to the solids; and
the lithium stays in solution. The alum solids are further
treated to the lithium yield saleable potassium, caesium and
rubidium products.
The impure lithium-rich liquor is then treated through a
series of pH controlled precipitation stages, with limestone
and lime, to remove the remaining impurities of iron,
aluminium, manganese, and magnesium.
The resulting lithium sulphate solution is of sufficient quality
to allow the recovery of a high specification lithium product.
LOH-Max® allows the cost-effective production of high
quality lithium hydroxide without the co-production
of sodium sulphate. It takes the lithium sulphate liquor
produced from L-Max® as feed and uses hydrometallurgical
reactions to produce lithium hydroxide and a gypsum
containing residue.
Provisional patent applications for LOH-Max™ - and the
separate process for production of caesium and rubidium
chemicals - advanced in fiscal 2020.
14
2021 LEPIDICO ANNUAL REPORT Amy Jones, Metallurgical Technician
BUSINESS DEVELOPMENT
THREE MAJOR WORKSTREAMS
FOR PHASE 1
Major work packages were advanced this year as the
company focused on taking Phase 1 into its construction
phase:
1. securing the requisite permits and approvals;
2. entering into binding offtake agreements; and
3. arrangement of a full project funding package.
1. Permits and Approvals
All permits and approvals are now in place for
construction of the Namibian operations.
Most notably, a mining licence was granted in 2018 for
a period of ten years - covering all currently identified
Mineral Resources at Karibib, as well as high-priority
lithium pegmatite exploration targets.
The latter represent opportunities to expand the Mineral
Resource to support a Phase 2 Project development.
Water extraction at Karibib is governed by a standalone
permit that allows for approximately twice the quantity of
water required for Phase 1 at peak production.
During the past year the Preliminary Environmental
Review for the Phase 1 chemical plant site at KIZAD was
approved by the Environment Agency – EAD.
Subsequently, EAD provided Lepidico with an
environmental approval to construct. The key commercial
terms for the Company’s Musataha Agreement with Abu
Dhabi Ports (ADP) have been agreed, which, following
execution will entitle the Company to lease the land for
the construction and operation of the chemical plant for a
period of 25 years.
2. Offtake
Excellent progress continues to be made in securing
binding offtake agreements, particularly for the high-
value products to be manufactured by the Phase 1
Chemical Plant.
By year end lithium supply discussions were being
prioritised with three consumers. One is the result of an
unsolicited inbound enquiry received during the June
quarter, testament to the rapidly tightening lithium market.
At the time of writing terms were being negotiated for
long-term offtake of all the annual output from Phase 1.
The structural changes in the caesium and rubidium
markets have led to considerable interest in these metals
from Phase 1.
At year end, the Company was in meaningful discussions
with four groups for long term supply of all the caesium
and a proportion of the rubidium.
3. Finance
Lepidico has been working with Lion’s Head Global
Partners (LHGP) since December 2019 as a finance
advisor. LHGP has specialist capabilities in our
geographies of Africa, the UAE, Europe and the
United States.
A debt finance stress test conducted by Lions Head has
shown that the Project has robust economics, with an
ability to support lending at substantially lower lithium
chemical prices versus the Benchmark Mineral Intelligence
forecast. It also green lit other scenarios, including
elimination of by-product revenues.
In October 2020, Lepidico entered into a formal Mandate
Agreement with the U.S. Government’s International
Development Finance Corporation. Detailed due diligence
on the Project, with a view to providing debt finance for
the Namibian developments, is now being undertaken.
Later in the year DFC appointed Behre Dolbear Australia
Pty Ltd as the independent engineer to complete detailed
technical due diligence, which is scheduled to deliver in
calendar 2021.
PHASE 2 AND TECHNOLOGY
LICENCES
Preparation for further growth
Scoping has been focused on: (i) identifying locations
in the United States for a chemical plant; and (ii) Mineral
Resource development within the Karibib Mining Licence
area (see Exploration Overview).
Lepidico is now engaged meaningfully with U.S.
representatives from eight prospective States. There is
considerable interest in securing direct foreign investment
in the EV supply chain. Indications are that some States
could offer incentives equivalent to those from the UAE’s
industrial Free Zones.
It is planned that discussions will continue in early
2022 once the Phase 1 Project has advanced to full
implementation.
Walvis Bay in Namibia and Abu Dhabi will continue to be
evaluated as prospective locations for a Phase 2 plant
along with a possible location in Europe. The Scoping
Study contemplates a nominal output capacity of
20,000tpa LCE.
Using Phase 1 DFS data, a scoping study level capital
intensity for a Phase 2 Project was estimated to be
US$16,900/t LCE and just US$10,500/t LCE on a net of
by-products basis.
15
2021 LEPIDICO ANNUAL REPORT Technology Licences
Lepidico sold its first technology licence in December
2020 to Cornish Lithium Ltd (CLL). A privately-held UK
company, CLL is pioneering the development of lithium
mica deposits in the large St Austell granite complex in
southwest England.
Lepidico granted CLL an exclusive technology licence
package that includes the proprietary L-Max®, LOH-
Max® and caesium rubidium manufacturing processes.
The consideration for the licence and technology data
package was C$4 million, which allowed Lepidico to
record its first profit in fiscal 2021.
In recognition of the collaboration to pioneer Lepidico’s
technologies on zinnwaldite and polylithionite
mineralisations several one-off special terms were
included in the licence, including:
• up to a 15 year royalty holiday;
• a concessionary royalty rate of 1.5% of gross revenue
from all chemical conversion plant products; and
• geographic exclusivity over the St Austell granite.
Adam Farghaly, Senior Metallurgist
16
2021 LEPIDICO ANNUAL REPORT RESERVES & RESOURCES
Karibib Lithium Project
The Karibib Lithium Project in central Namibia is made
up of four tenements covering 1,034km² of the Karibib
Pegmatite Belt. The Belt is a major regional intrusive zone
of LCT-type (lithium caesium tantalum) pegmatites.
The project contains numerous highly fractionated
LCT-type pegmatites. The dominant lithium minerals are
lepidolite, lithium-mica and petalite.
Some of the pegmatites have been mined since the 1930’s
for beryl, tantalite and petalite for use in the ceramics
industry. The largest of the known lepidolite-rich deposits
are at Rubicon and Helikon.
Mineral Resources include the Rubicon pegmatite and
five pegmatites in the Helikon field (Helikon 1 - 5), located
7km to the north. All are within the granted Mining
Licence (ML 204).
An industry standard approach to mine planning has been
undertaken:
• Whittle 4X™ pit optimisation was used by AMDAD to
define the location and shape of the open pits for the
mine plan.
• The software uses stable pit wall slopes, mining,
processing and administration operating costs, process
recoveries and product prices to determine the highest
value pit shell.
• It accounts for the interactions of these inputs with the
deposit geometry, the depth, width and orientation of
the mineralised zones and the grade distribution of the
target product within those zones.
• The highest value, or optimised, pit shell is then used to
guide design of a practical working pit including wall
slope designs and access roads.
Mineral Resources
Snowden Mining Industry Consultants Pty Ltd
(“Snowden”) produced Mineral Resource Estimates
(MREs) for Rubicon and Helikon 1 in January 2020.
Snowden reported in accordance with the JORC Code
(2102) and estimates are based on 5,164m of additional
diamond drilling undertaken in 2019, with 51 holes
completed at Rubicon and 35 holes completed at
Helikon 1.
As reported to the ASX in January 2020, Resources at
Rubicon and Helikon 1 total 8.87Mt @ 0.43% Li2O.
Significantly, the updated MREs also include estimates
for caesium, rubidium and potassium. MREs by The
MSA Group for Helikon 2-5 do not include assay data for
caesium, rubidium or potassium at this time.
The pegmatites are generally zoned with the petalite
occurring adjacent to the central quartz core. Lepidolite-
rich zones are commonly peripheral to these zones.
As a consequence, much of the lepidolite and other
lithium mica mineralisation was mined to access the
petalite and discarded in surface stockpiles or reported
as tailings from processing. In fiscal 2021 a program of
work was undertaken to augment existing data on these
surface stocks to enable the reporting of the first Mineral
Resources classified under the JORC Code (2012).
Pit optimisations undertaken by Australian Mine Design
and Development Pty Ltd (AMDAD) for Rubicon and
Helikon 1 demonstrate these Mineral Resources to be
potentially economic at a cut-off grade of 0.15% Li2O.
Ore Reserves
The dip, geometry and near surface location of the
mineralised zones at the Karibib Project are suitable for
conventional open pit truck and shovel operations, with
drilling and blasting required to fragment mineralised and
waste rock.
Pit wall slopes are based on a geotechnical assessment
by engineers Pells Sullivan and Meynink. The geotechnical
assessment was based on: (i) dedicated geotechnical
drilling in final pit walls; (ii) mapping of fault structures;
(iii) core assessment and physical rock testing; and
(iv) failure modelling.
Inter ramp angles are 55° based on 15m high benches with
8m berms.
The Rubicon and Helikon 1 pit designs have been
completed in four and two stages respectively. The stages
have been selected based on value, grade, and strip ratio
criteria. The Ore Reserves Statement has been prepared
by AMDAD in accordance with the guidelines of the 2012
Edition of the “JORC Code”. This was reported to ASX in
May 2020.
The Karibib Project Ore Reserve is understood to be
unique, being the only code-compliant estimate globally
for both caesium and rubidium, which also includes other
valuable alkali earth metals lithium and potassium.
This is a function of the metal endowment of the mineral
lepidolite – K(Li,Al,Rb,Cs)2(Al,Si)4O10(F,OH)2 – the
dominant lithium mineral at Karibib.
Other Exploration
Lepidico is maximising the value of its exploration
portfolio via programs targeted at a range of metals
that the Karibib region is prospective for. These include
tantalum, gold, copper, tungsten and uranium.
Exploration during much of fiscal 2021 was hampered
by COVID-19 movement restrictions imposed by the
Namibian authorities, however much valuable work was
undertaken.
Mineral Resource development drilling resumed in June
following the easing of COVID-19 restrictions in Namibia.
17
2021 LEPIDICO ANNUAL REPORT Karibib Mineral Resource Estimate
Resource
Category
Tonnes
(M)
Li₂O
(%)
Deposit
Rubicon*
Helikon 1*
Helikon2#
Helikon3#
Helikon4#
Helikon5#
Measured
Indicated
Measured
Indicated
Inferred
1.56
5.72
0.64
0.94
0.17
Inferred
0.216
Inferred
0.295
Inferred
Inferred
1.510
0.179
Rubicon tailings
Indicated
0.07
Rubicon stockpiles
Inferred
Helikon stockpiles
Inferred
Global
Measured
Indicated
Inferred
Total
0.41
0.16
2.20
6.73
2.94
11.87
Rb
(%)
0.28
0.20
0.25
0.22
0.29
Cs
(ppm)
Ta
(ppm)
335
232
520
531
47
37
61
74
1100
150
K
(%)
2.24
2.11
1.90
1.81
2.18
0.42
538
60
0.23
0.27
0.21
535
389
277
125
51
42
2.14
Cut-off
(% Li20)
Effective
Date
0.15
0.15
0.15
0.15
0.15
0.20
0.20
0.20
0.20
0.00
0.00
0.00
28.01.2020
28.01.2020
28.01.2020
28.01.2020
28.01.2020
18.10.2018
18.10.2018
18.10.2018
18.10.2018
29.01.2021
10.03.2021
21.02.2021
21.02.2021
29.01.2021
10.03.2021
10.03.2021
0.53
0.36
0.65
0.50
0.70
0.56
0.48
0.38
0.31
0.99
0.84
0.65
0.57
0.39
0.50
0.45
Note: *Snowden estimate cut-off 0.15% Li2O; #MSA Group estimate cut-off 0.20% Li2O; no cut-off applied to stockpiles
on the assumption that all such material would be picked up and processed.
18
2021 LEPIDICO ANNUAL REPORT
Karibib Ore Reserve Estimate
Pit
Proved
Probable
Pit Total
Waste
Waste: Ore Ratio
Proved
Probable
Pit Total
Waste
Waste: Ore Ratio
Proved
Probable
Total Ore
Waste
Waste: Ore Ratio
Mt
1.38
3.94
5.32
22.84
4.30
0.55
0.85
1.40
2.51
1.80
1.93
4.79
6.72
25.35
3.80
Li₂O
%
0.55
0.38
0.43
0.69
0.51
0.58
0.59
0.41
0.46
Rb
%
Rubicon Pit
0.28
0.20
0.22
Helikon 1 Pit
0.26
0.22
0.24
Total Project
0.28
0.21
0.23
Cs
ppm
350
230
260
560
550
550
410
290
320
Ta
ppm
50
40
40
60
80
70
50
40
50
K
%
2.17
2.03
2.06
1.93
1.79
1.85
2.10
1.99
2.02
The information in this report that relates to the Rubicon and
Helikon 1 Mineral Resource estimates is based on information
compiled by Vanessa O’Toole who is a member of the Australasian
Institute of Mining and Metallurgy and has sufficient experience
which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity to which she is undertaking
to qualify as a Competent Person as defined in the 2012 edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.” Vanessa O’Toole was at the
time an employee of Snowden Mining Industry Consultants Pty Ltd
and consents to the inclusion in the report of the matters based on
this information in the form and context in which it appears.
The information in this report that relates to the Helikon 2 - Helikon
5 Mineral Resource estimates is based on information compiled
by Mr Jeremy Witley, who is a fellow of The Geological Society of
South Africa (GSSA) and is a registered professional with the South
African Council for Natural Scientific Professions (SACNSAP). Mr
Witley is the Head of Mineral Resources at The MSA Group (Pty)
Ltd (an independent consulting company). Mr Witley has sufficient
experience relevant to the style of mineralisation and the types of
deposit under consideration, and to the activity he is undertaking,
to qualify as a Competent Person as defined in the 2012 edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.” Mr Witley consents to the
inclusion in this report of information compiled by him in the form
and context in which it appears.
The information in this report that relates to the Rubicon Stockpiles,
Helikon Stockpiles and the Rubicon Tailings MREs is based on
information compiled by Stephen Godfrey who is a Fellow of the
Australasian Institute of Mining and Metallurgy (FAusIMM) and a
Member of the Australian Institute of Geoscientists (MAIG) and has
sufficient experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity to
which he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves”.
Mr Godfrey is the principal of Resource Evaluation Services and
consents to the inclusion in the report of the matters based on this
information in the form and context in which it appears.
The information in this report that relates to the Helikon 1 and
Rubicon Ore Reserve estimates is based on information compiled
by John Wyche who is a Fellow of the Australasian Institute
of Mining and Metallurgy and has sufficient experience which
is relevant to the type of deposit and mining method under
consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.” Mr Wyche is an employee
of Australian Mine Design and Development Pty Ltd which is an
independent consulting company. He consents to the inclusion
in the report of the information compiled by him in the form and
context in which it appears.
The information in this report that relates to Exploration Results
is based on information compiled by Mr Tom Dukovcic, who is
an employee of the Company and a member of the Australian
Institute of Geoscientists and who has sufficient experience
relevant to the styles of mineralisation and the types of deposit
under consideration, and to the activity that has been undertaken,
to qualify as a Competent Person as defined in the 2012 edition
of the “Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.” Mr Dukovcic consents to the
inclusion in this report of information compiled by him in the form
and context in which it appears.
19
2021 LEPIDICO ANNUAL REPORT BOARD OF DIRECTORS
AND MANAGEMENT
MR GARY JOHNSON
BOARD OF DIRECTORS
MR ALEX NEULING
Mr Gary Johnson
Chair (Non-executive)
Qualifications - MAusIMM, MTMS, MAICD
Mr Julian “Joe” Walsh
Managing Director (Executive)
Qualifications - BEng, MSc
MR JOE WALSH
Ms Cynthia Thomas
Non-Executive Director
Qualifications - B.Com, MBA
MS SHONTEL NORGATE
MS CYNTHIA THOMAS
MR MARK RODDA
Mr Mark Rodda
Non-Executive Director
Qualifications - BA, LLB
MANAGEMENT TEAM
Joint Company Secretary
Mr Alex Neuling
Qualifications: BSc, FCA (ICAEW), FCIS
Chief Financial Officer &
Joint Company Secretary
Ms Shontel Norgate
Qualifications: CA, AGIA ACIS
General Manager – Geology
Mr Tom Dukovcic
Qualifications: BSc (Hons), MAIG, MAICD
General Manager –
Business Development
Mr Peter Walker
Qualifications: ScENG, CENG, ARSM
MR TOM DUKOVCIC
MR PETER WALKER
20
2021 LEPIDICO ANNUAL REPORT
SUSTAINABILITY
2021 ACHIEVEMENTS
• No recordable incidents in 2021: Lepidico
maintains its zero-harm health, safety and
environment performance since records began
in September 2016.
• Further unquantified Scope 3 emissions savings
envisaged, associated with caesium and rubidium
by-products.
• Significant socio-economic benefits identified in
the Karibib region, from creation of over 800 direct
and indirect jobs, equivalent to 15% of the local
population.
• Long term environmental benefits associated
with the planned Karibib mine and concentrator
redevelopments lead to their assessment as
a Category B Project in terms of the Equator
Principles and International Finance Corporation
(IFC) processes.
• Preliminary Environmental Review for the
Phase 1 Chemical Plant site in Abu Dhabi
approved and Environmental & Social Impact
Assessment finalised, meeting Equator
Principles and IFC processes.
• Third-party Greenhouse Gas evaluation completed.
Phase 1 emissions are, “low compared with other
emission intensities reported or derived from
lithium hydroxide production facilities.”
• Opportunities identified to futureproof the Phase
1 chemical plant and potentially reduce integrated
project Scope 1 and 2 emissions to best in class
performance of less than 3.0t CO2-e/t LCE.
• Potential Scope 3 lithium chemical emissions
savings associated with bulk by-products are
estimated at 34,000t CO2-e per year. This would
“offset a material proportion of envisaged overall
annual Scope 3 inventory emissions.”
• Water use for the vertically-integrated project's
lithium hydroxide production is estimated at just
33m³/t LCE.
• 85% of water is designed to be recycled for
the Namibian operations with natural aquifer
regeneration data exceeding nett extraction.
• Footprint in Namibia maximises use of previously
disturbed land by mining areas. The UAE plant,
within a designated industrial park, occupies just
5.7 hectares.
• Lepidico now complies with all ASX Principles of
Good Corporate Governance and Best Practice
Recommendations that can be achieved with
the current Board composition, with further
improvement envisaged as skills are added to meet
business growth plans.
• Committed to the Initiative for Responsible
Mining Assurance (IRMA) for independent third-
party verification and certification on social and
environmental performance standards.
• Edison Group appointed as investor relations
advisor with a focus on digital engagement,
including social media, to enhance stakeholder
communications.
• Donation of medical supplies to Otjimbingwe clinic
in Namibia to support its COVID-19 community
activities.
21
2021 LEPIDICO ANNUAL REPORT SUSTAINABILITY
KEY ACTIONS DISCUSSION
Environmental stewardship, social responsibility and
corporate governance are key tenants for any sustainable
business. Stakeholders, be they governments, investors,
financiers, customers or suppliers, require visibility in
these areas in order to effectively manage their own
affairs and report accurately.
Lepidico requires the same reciprocity from its
stakeholders, ensuring ethical practice throughout the
supply chains we participate in.
Environmental Stewardship
Governments around the world are now enforcing ever
more stringent greenhouse gas emissions standards on
electric vehicle manufacturers (OEMs), which includes
emissions associated with the raw materials they employ.
For lithium chemical suppliers this ethical sourcing
extends to evaluation of water and land usage, both of
which can be challenging for certain types of lithium
deposits and processes.
Lepidico’s Phase 1 Project has relatively low greenhouse
gas emissions, modest water usage, and a small land
disturbance footprint.
Coupled with environmental improvements in Namibia
at the end of mine life - and there being no production
of sodium sulphate from our chemical conversion plant
- leads us to believe Phase 1’s aggregate environmental
credentials are industry-leading.
Greenhouse Gas Emissions, Energy
Management and Climate Impact
Summary:
Phase 1 greenhouse gas emissions represent the sole
reportable impact to the climate. Relative to the lithium
industry the emissions are modest, with opportunities to
make the Project best-in-class.
A carbon footprint assessment of the integrated Phase 1
Project Definitive Feasibility Study (DFS) was completed by
leading industry consultant GHD Pty Ltd (GHD).
Scope 1 and 2 emissions intensity from the Abu Dhabi
chemical conversion plant is 7.46t CO2-e/t lithium
hydroxide, which GHD advised as being, “low compared
with other emission intensities reported or derived from
lithium hydroxide production facilities.”
Upstream mining and mineral concentration at Karibib have
an emissions intensity of 0.13t CO2-e/t concentrate (1.37t
CO2-e/t lithium hydroxide), which is, “comparable with
other similar lithium mine and concentrator projects.”
While the DFS designs evaluated incorporate energy
efficient technologies including waste heat recycling,
Lepidico has since identified several new paths to
substantially reducing implied CO2 emissions. Together,
these may reduce the impact to less than 3.0t CO2-e/t LCE.
The main source of Phase 1 greenhouse gas (GHG) emissions
is the use of natural gas in the boiler. Opportunities are being
evaluated to not just reduce natural gas consumption from
DFS estimates but eliminate its use entirely.
While solar pre-heating of boiler feed water will
incrementally reduce gas consumption, the greater prize is
to futureproof the plant by installing a hydrogen-enabled or
hydrogen-ready boiler. This will allow the decarbonisation
of all process heat when burning green hydrogen.
Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity,
steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company's value chain.
Tonnes of carbon dioxide equivalent.
22
2021 LEPIDICO ANNUAL REPORT
According to international law firm Watson Farley &
Williams, the United Arab Emirates is set to become a
world leader in green hydrogen manufacture with the
construction of several facilities already planned and
underway. Examples of current projects include:
• Siemens Energy: has collaborated with DEWA - the
state electricity and water company of Dubai - to build
the first solar-driven electrolysis hydrogen facility in the
Middle East. The project is designed to showcase the
UAE’s hydrogen potential at EXPO 2020 (taking place
from October 2021) and will be used as a prototype for
larger capacity facilities in the Middle East.
• Masdar: the renewable energy arm of the Abu Dhabi
sovereign wealth fund has partnered with Siemens
Energy, the Abu Dhabi Department of Energy, Etihad
Airways, Lufthansa, Marubeni Corporation and the Abu
Dhabi based Khalifa University to develop an electrolysis
facility producing green hydrogen for the transport
industry. The consortium will test green hydrogen for
road transport, whilst constructing a kerosene synthesis
plant to convert the majority of it into sustainable
aviation fuel. The second phase of the programme will
explore decarbonisation in maritime fuel.
These are ambitious projects and the calibre of partners
that Dubai and Abu Dhabi are working with demonstrates
their commitment to hydrogen and the potential of the
hydrogen economy to the UAE.
At Karibib, the largest single Scope 1 emission is
associated with diesel fuel usage, of which 28% will
be consumed by trucks hauling ore and mine waste.
Electrification of this small truck fleet is envisaged via
equipment lease once suitable units become available.
Grid power supplied at Karibib already includes a
significant renewable component with more projects
planned in the coming years. By 2025 it is estimated that
80% of power will be generated from renewable sources.
The UAE is also committed to progressively decarbonising
it’s grid with 25% of non-fossil fuel supply planned by
2023. This is when Lepidico’s Phase 1 plant is scheduled
to commission.
To fast-track material reductions in Scope 2 emissions,
off-grid renewable power solutions are being evaluated.
The relatively modest power requirements at both the
Karibib and KIZAD sites allow modest footprint modular
concentrated solar power generation to be considered,
augmented by a single wind turbine. Evaluation of this
configuration has started for both operating sites.
Integrated Phase 1 DFS Scope 1 & 2 emissions and reduction opportunities
Source
Scope 1
Scope 2
Scope 1
Scope 2
Comment
DFS
Opportunity
Diesel: mine haulage
Diesel: other
1,589
4,075
Wastewater treatment
20
Grid power
2,273
0
4,075
20
Karibib sub-total
Natural gas (heat)
Process CO2
Diesel
Grid Power
UAE sub-total
Total
5,684
31,292
13,281
698
45,271
50,955
2,273
4,095
0
13,281
698
13,979
18,074
7,419
7,419
9,692
Source: GHD and Lepidico estimates
Electric mine haulage trucks
Part electrification of mobile/fixed plant
to be assessed
To be assessed
Off-grid modular concentrated solar
power
Intensity: 0.7t CO2-e/t LCE
Green hydrogen enabled boiler with
solar pre-heat
Potential to reduce if lithium carbonate
produced
Part electrification of mobile plant to be
assessed
Off-grid modular concentrated solar
power
Intensity 2.3t CO2-e/t LCE
Intensity 3.0t CO2-e/t LCE
0
0
0
0
0
23
2021 LEPIDICO ANNUAL REPORT
SUSTAINABILITY
Emissions through the entire lithium hydroxide
monohydrate production supply chain were assessed
by GHD based on a literature review. It sourced data for
South American brine production, Australian spodumene
processed in China and other integrated international
lithium hydroxide refineries.
Lepidico data in the chart below is for the integrated
Phase 1 Project at steady state operation. It includes our
initial CO2 reduction target of 2.0t CO2-e/t, based on a
greater proportion of power being sourced from non-
greenhouse gas generating sources and solar pre-heating
of boiler water to reduce natural gas consumption.
Further reduction targets will be set once there is greater
clarity on the availability of green hydrogen in the UAE
and once off-grid renewable power alternatives have
been assessed.
Figure below: CO2 intensity comparison for lithium
hydroxide production tCO2-e/t lithium hydroxide
.
O
2
H
H
O
L
t
/
e
-
2
i
O
C
t
16
14
12
10
8
6
4
2
0
Brine
Integrated
Spodumene
Australia-China
Spodumene
Lepidico
Integrated
Low/Target
Range
Source: GHD data
Preliminary Scope 3 emissions estimates for transport
of concentrate from Namibia to UAE and transport of
products and by-products are only 6,732 and
2,507t CO2-e respectively.
The L-Max® process will produce valuable by-products
including caesium sulphate, rubidium sulphate,
amorphous silica, sulphate of potash and potentially
gypsum. The estimated potential emissions savings are
approximately 34,009t CO2-e per year. This would offset
a material proportion of envisaged overall annual Scope
3 inventory emissions.
24
Emission savings relating to use of caesium and rubidium
compounds have not been quantified. However, some
key uses of caesium sulphate demonstrate benefits of
reducing energy consumption and enhancing productivity
thereby reducing net emissions.
Scope 3 emissions will be fully assessed once operations
commence, when individual supplier and customer details
including the associated logistics are known.
At its pre-development stage, Lepidico’s carbon emissions
are largely associated with air travel and exploration
activities, predominantly drilling. In fiscal 2021 no air travel
occurred. The amount of drilling was negligible as the
June 2021 drill program was suspended due to COVID-19.
This will be included in 2022 data instead. In fiscal 2020
Lepidico generated an estimated 501 tonnes of CO2
compared with 285 tonnes and 234 tonnes in the previous
two years respectively.
Water Management
Summary:
The impact on water availability at Karibib is projected
to be zero, with ongoing monitoring to confirm this.
While the Abu Dhabi plant will consume more water,
any future use of green hydrogen would produce water,
thereby reducing consumption.
Over the first four years of manufacture of all products
total water consumption for the integrated operations is
estimated in the DFS to be 415,000m3 annually.
Less than 20% of this total, 80,000m3, will be used
at Karibib initially, where approximately 85% of the
concentrator water requirement is recycled via filtration
of both concentrate product and tailings. Water is lost
to evaporation, seepage, and concentrate and tailings
filter cakes.
Water at Karibib is sourced from four in-ground bores,
three of which are located 3.5km from Rubicon and
are equipped with submersible pumps, powered by
dedicated solar arrays.
Lepidico’s water permit was granted in 2017 and allows
for 210,000m3 to be extracted annually. This allows for
future expansion. Groundwater modelling indicates that
natural meteoric recharge should more than replace
the maximum capacity contemplated under the permit.
Ongoing aquifer monitoring will be employed to
confirm this.
2021 LEPIDICO ANNUAL REPORT
Chemical conversion in Abu Dhabi is estimated to
consume 315,000m3 of water annually, nett of recycling.
Evaporative losses attributed to evaporators, crystallisers,
dryers, cooling system and residue streams are significant
and therefore apportioned back to the individual
products where these unit processes are employed.
The balance of the nett water consumed is associated
with common services which are apportioned to
each product based on revenue contribution. Karibib
consumption is also allocated according to revenue.
Raw water at KIZAD is mainly produced by desalination,
most of which is powered by waste heat from gas fired
power stations. The balance of water consumed in the
UAE is sourced from dams and water harvesting.
Employing green hydrogen to fuel the boiler will produce
water that would be reclaimed for use in the plant,
thereby reducing consumption.
Table below: Integrated operations water consumption
product allocation
Consumption % Consumption rate
M3/t LCE
Although no closure of these industrial sites has been
undertaken previously, Lepidico’s plans include formal
mine closure - with the aim of rectifying environmental
legacy issues and returning the land to agricultural use.
Phase 1 activities at Karibib are confined to an area of 962
hectares within the 69km2 mining lease (ML 204). Within
this, the areas for actual development will be far smaller
with the majority of the footprint allocated to ground
previously disturbed by historical mining activities.
The mining lease is sparsely populated with no permanent
dwellings within the planned Phase 1 area.
An ESIA and ESMP for the Karibib Operations were
completed in July 2020 by Risk-Based Solutions CC,
a leading Namibian environmental consultancy. It was
authored by Dr Sindila Mwiya, who has undertaken
more than 200 environmental projects for Namibian,
Continental African and International clients.
The ESIA and ESMP conclusions were that our plans
comply with the provisions of Namibian mining and
environmental legislation and accord with the Equator
Principles and IFC Performance Standards on Social and
Environmental Sustainability.
Lithium hydroxide
Rubidium sulphate
SOP
Gypsum
Amorphous silica
Caesium sulphate
44
32
10
5
5
4
33
24
8
4
4
3
Land Use, Waste Management
and Biodiversity
Summary:
Environmental land use impacts are predominantly
limited to the Namibian operations. Lepidico’s closure
plan will correct previous environmental remediation
shortcomings, returning the land to agricultural use and
making material improvements to the environment.
Karibib was mined at various times during the 20th
century, largely for petalite. As such, it represents a
brownfield development.
25
2021 LEPIDICO ANNUAL REPORT
SUSTAINABILITY
Importantly, Karibib is designated by the ESIA author
as a Category B Project, which is unusual for a mining
operation as this is the definition:
“ Business activities with potential limited
adverse environmental or social risks
and/or impacts that are few in number,
generally site-specific, largely reversible,
and readily addressed through mitigation
measures.”
Furthermore, the ESIA found that, “the proposed
Karibib Project development in the ML 204 poses
localised negative impacts to the receiving environment
with greater offset /trade-offs/ benefits in the form
of socioeconomic and environmental reclamation of
the currently abandoned mine sites. The extent of the
proposed mining and minerals processing and ongoing
exploration operations are limited in area extent with
respect to the ore body, the Rubicon and Helikon 1 pits
and supporting infrastructures areas.”
Karibib operations do not require a dedicated tailings
storage facility. Tailings from the concentrator will be
dewatered and co-disposed with mine waste rock thereby
filling the natural voids. Both tailings and waste have
been assessed as environmentally benign, and there is no
requirement for lining the waste management areas.
The Phase 1 chemical plant site is just 57,000m2 and is
located within an industrial free zone, which allows full
foreign ownership as well as tax exemptions on imports
and exports. Off-site infrastructure is supplied through
a land lease agreement with Abu Dhabi Ports, which
manages KIZAD, and includes direct connection to
existing infrastructure; natural gas, 11kV power, potable
water, and sewer services, roads, and drainage. The
KIZAD container port where concentrate from Walvis
Bay, Namibia will be imported is 15km by road from the
plant site.
An ESIA was also completed for the chemical plant in
2021 which accords with the Equator Principles and IFC
Performance Standards on Social and Environmental
Sustainability.
Schematic of proposed chemical plant site with KIZAD container port in the background
26
2021 LEPIDICO ANNUAL REPORT SOCIAL RESPONSIBILITY
Workforce Health & Safety
Lepidico is committed to the health, safety and wellness of
its workforce and has achieved zero harm performance at
its controlled sites since data collection began in August
2016, with 117,958 work hours now recorded.
Lost Time Injury Frequency Rate (LTIFR), Days Away from
work, job Restrictions, and/or job Transfers Frequency
Rate (DARTFR) and Total Recordable Incidents Frequency
Rate (TRIFR) all continue to be zero.
In March 2020 new protocols were introduced in order
to protect the workforce from COVID-19 while at work.
These initiatives included education on the virus and how
to mitigate its spread. All employees were encouraged to
transfer this knowledge within their family networks and
home communities.
Two cases of COVID-19 were reported amongst staff
in Namibia off-site and subsequently four cases were
identified on-site. All cases had mild symptoms with
our colleagues making a swift and full recovery. These
incidents led to the temporary closure of the Karibib camp
and suspension of site operations in June 2021. The camp
was subsequently fumigated and cleaned, and further
precautionary protocols introduced. Operations resumed
mid-July.
Community Engagement,
Empowerment & Investment
Lepidico conducted its first Socio-Economic Baseline
Study in March 2020, focused on the communities in
the broader Karibib region. This revealed three broad
categories of support in need of prioritisation:
1. Reaching compliance: taking a systemic and strategic
approach towards sustainability to do no harm and
stop making tomorrow’s legacies today.
2. Improved local governance to effectively deliver basic
services and development.
3. Infrastructure development and support to improve
the lives of Karibib, Otjimbingwe and Okongava farm
residents.
4. Local economic development for business and
job creation with a focus on agriculture, youth and
women’s projects.
5. Education development.
These objectives will be achieved through both shorter-
term components of work, which started in 2021 and
longer-term components that involve greater stakeholder
participation and consultation in their scoping and
implementation. Six projects have been outlined in
consultation with local stakeholders for action in fiscal
2022, with a budget of US$20,000.
In 2021, Lepidico Chemicals Namibia committed to donate
medical equipment needed to fight COVID-19 valued at
N$70,000 to the Otjimbingwe Clinic through the Office of
the Governor of the Erongo Region.
The Company also continued to supply water under its
abstraction licence to local farmers for their livestock.
In the longer term, Karibib operations are expected to
provide significant benefit to the communities in the
region through both direct and indirect employment.
Lepidico expects to recruit 115 full time employees, many
of whom will come from local communities, where the
population is estimated to be approximately 5,000.
Indirect employment is estimated to result in a further 800
jobs being created within the community.
1. Projects/investments with high employment creation
potential – to be aligned to the relatively abundant and
diverse local labour force.
2. Well-equipped vocational centres for tailor-made
trainings/skills enhancement, targeting unemployed
youth and women.
3. Diversification and value addition initiatives for food
security enhancement and poverty alleviation, targeting
vulnerable groups and farmers.
Based on several stakeholders’ meetings and the Socio-
Economic Baseline assessments, five key objectives were
developed where Lepidico can add the greatest value in
its support of local communities:
Corporate Governance
Lepidico continues to implement improvements to our
Corporate Governance system as the company grows in
complexity to meet our development needs.
The Diversity Committee, established in 2020, reviewed
its progress against the FY2021 measurable objectives
and set new objectives for FY2022. We continued to
benchmark and track gender diversity against our
peers and remain committed to providing flexible
work and salary arrangements to accommodate family
commitments, study and self-improvement goals, cultural
traditions and other personal choices of our employees.
In addition, all job descriptions and job titles are gender
neutral and inclusive.
27
2021 LEPIDICO ANNUAL REPORT
SUSTAINABILITY
The proportion of women employed by Lepidico as at 30 June 2021 is listed below:
Level
Non-Executive Directors
Senior Executive Positions (including Executive Director)1
Management
Non-Management
All Employees2
2021
33%
25%
0%
67%
33%
1 “Senior Executive” for the purpose of gender representation is defined to mean the Managing Director and his direct reports.
2 Includes full-time, part-time and regular casual employees.
Our Board composition brings together a balanced
team of experienced financial, technical and operations
professionals. The Board works closely with the Lepidico
management team to guide the company and has
oversight of Lepidico’s ESG strategy.
The Company has adopted a continuous improvement
philosophy and was an early adopter of the 4th edition
of the ASX Principles of Good Corporate Governance and
Best Practice Recommendations (refer to the Corporate
Governance Statement for further detail). Governance
principles adopted at the head company level are
cascaded, as appropriate, to the Company’s operations in
the UAE and Namibia.
the investment community in Australia and in other major
financial centres globally. There is ongoing dialogue with
shareholders, brokers, financial analysts, prospective
institutional investors, family offices, private equity
and sovereign wealth funds and prospective strategic
investors around the world. We believe that Lepidico
has international investment appeal. The company
is committed to enhancing its global investability by
delivering on its stated strategy from its platform on the
Australian Securities Exchange (ASX).
Lepidico has established a suite of Corporate Governance
documents and Charters to meet ASX standard disclosure
requirements, which are available at the Company’s website.
Sustainability Policy and Risk
Intellectual Property
The Company takes a “top-down” approach, with a
developed corporate risk register including a residual risk
rating for all implemented actions and controls.
The register covers corporate, exploration, technical
evaluation and project implementations. Entries are based
on the critical tasks identified in the Company’s Strategic
Plan and ranked by residual risk rating.
The document is reviewed annually, whilst major risks and
management plans are reviewed at Board meetings. The
major risks that the company manages include; ongoing
financing for project development, securing offtake
contracts for products and project implementation risks.
Shareholder Engagement
In 2021 Lepidico extended its relationship with Edison
Group to cover investor relations with a focus on digital
engagement including social media, complemented by
their existing equity research. The team has already begun
to help optimise Lepidico’s investment case. The next
steps will be to create new content and reach a greatly
expanded universe of investors – both professional and
private – with a goal of maximising shareholder value.
The executive management team regularly engage with
At 30 June 2021, the Company holds patents for
its L-Max® technology in the United States, Europe,
Japan and Australia, along with an Innovation Patent
in Australia. National and regional phase patent
applications are well advanced in the remaining other
key jurisdictions and these processes are expected to
continue during calendar year 2021. The Company also
has a US patent for its process technology for lithium
recovery from phosphate minerals, which include
amblygonite.
An international patent application is held for LOH-Max®
under PCT/AU2020/050090 and the national and
regional phase of the patent application process is due to
commence in the current quarter.
The national phase patent applications are progressing
in relation to S-Max® under PCT/AU2019/050317 and
PCT/AU2019/050318 and for the production of caesium,
rubidium and potassium brines and other formates under
PCT/AU2019/051024. The national and regional phase
applications are expected to continue into 2022.
On 1 April 2021 a provisional patent application for the
lithium carbonate recovery process was filed.
28
2021 LEPIDICO ANNUAL REPORT The Nature of our Markets
Markets for lithium chemicals, SOP and supplementary
cementitious materials such as amorphous silica have
scale and are generally considered to be free markets.
Once the business transitions, detailed sustainability
performance data metrics will be captured from our
operations and contractors. Accordingly, we believe the
appropriate timing for full sustainability disclosure will
be the year following the commissioning of the Phase 1
Project, currently scheduled to start in late calendar 2022.
Our understanding of the material issues for each business
unit have become clearer with the completion of the
DFS and will continue to do so as we progress regulatory
approval processes and gain input from our stakeholders,
especially as their expectations for the management of
issues evolves and becomes more complex. Our goal is to
be able to report our future activities against the Global
Reporting Initiative (GRI) Standards and in the intervening
years our systems will evolve to collect the necessary data.
This report provides commentary on our Corporate
Social Responsibility (CSR) systems development,
commensurate with our risks and opportunities. We look
forward to sharing our experiences to date here, and
further disclosure in future reports, as we continue on our
sustainability journey. We undertake to further engage
with a wide group of stakeholders and community groups
at our project sites, and we welcome their input and
feedback on our CSR reporting.
In 2021, Lepidico further developed its operating
management systems. Internal goals focus on governance,
occupational health and safety, the environment and
meeting project milestones. Both the exploration and
project development groups report against these
indicators and a summary is tabulated opposite.
In fiscal 2021 Lepidico committed to the IRMA for
independent third-party verification and certification on
social and environmental performance standards. Actions
under this will be able to start once operations commence.
The caesium and rubidium markets by contrast are small
and opaque with production concentrated amongst just
two sizable producers globally. It is understood that by
2022 one of these chemical manufacturers will cease
production following depletion of its sole source of
primary mineral feed.
Caesium, rubidium, lithium chemicals and SOP (fertiliser)
are all on the U.S. Government list of 35 Critical Minerals.
Caesium and rubidium are a subset of 14 for which the U.S.
is 100% reliant on imports. Caesium and rubidium are also
a subset of just three Critical Minerals, which include rare
earths, where the markets are sufficiently concentrated
that they are effectively controlled by a single nation.
Lepidico aims to bring new sustainable and ethical sources
of caesium and rubidium chemicals to these markets.
SUSTAINABILITY REPORTING
The aim of this fourth sustainability report is to discuss
management’s approach to environmental and social
responsibility initiatives and how these continue to be
integrated into our sustainable business strategy. As with
prior years, this report is not a full sustainability report, but
rather an insight into the sustainability initiatives Lepidico
is undertaking as it transitions from its pre-development
stage into an active alkali metals chemical producer.
Lepidico is committed to developing a sustainable lithium
business providing high quality products whilst minimising
environmental and social impacts, with a particular focus
on climate and biosphere stewardship.
Building sustainability into our systems, values,
management practices, behaviours and governance
arrangements within a rapidly changing and challenging
global environment is embedded within our approach to
strategic planning.
We have also embraced the opportunity to integrate
social, economic, environmental, and health and safety
best practices into project design criteria, while minimising
business risks. This is evidenced by ESIAs being aligned
with the Equator Principles and IFC Performance
Standards, when prevailing local regulatory requirements
are far less stringent.
29
2021 LEPIDICO ANNUAL REPORT SUSTAINABILITY
Summary
Goal
Governance
Outcome
Comments
Compliance
In compliance as per ASX statement
Mining & Exploration licenses
Compliance
In compliance as per license conditions in Namibia
Occupational Health & Safety
Zero Fatalities
Zero Lost Time Incidents
Zero Medical Aid Incidents
Yes
Yes
Yes
No Fatalities.
No LTIs.
No MAIs.
OHS Management System
Established
OHS Policy and OHS Management Plan.
Environment
Zero Major Incidents
Yes
No major spills or incidents at managed sites.
Environmental Management System Yes
Sustainable Development Policy in place.
Environmental Baseline Studies
Complete
ESIAs completed for Karibib operations and Abu Dhabi
chemical plant to IFC Environmental & Social Standards.
Ongoing
Ongoing
ESMP completed for Karibib operations including closure
plan with Category B designation.
Independent greenhouse gas assessment completed for
Scope 1 & 2 emissions, Scope 3 pending start of operations.
Operational Studies & Readiness
Waste minimisation
Ongoing
Implementation of filtered dry stacked tailings co-disposal
with mine waste – no dedicated TSF required.
Renewable power studies
Ongoing
Hybrid renewable off-grid solutions being evaluated for
Karibib and Abu Dhabi.
Green hydrogen study
Ongoing
H2 enabled boiler review & Abu Dhabi H2 supply study.
Social & Community
Communities
Ongoing
Corporate Social Responsibility
Ongoing
Namibian Ministry of Lands and Reformation engaged to
work together with Lepidico to develop a formal land use
agreement.
Community meetings to negotiate Cohabitation
Agreement with the involvement of traditional owners and
local farmers from the area.
CSR plan updated and social support programmes
developed for FY2022.
30
2021 LEPIDICO ANNUAL REPORT CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Lepidico Ltd (the “Company”) is responsible for the corporate governance of the Company.
The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they
are elected and to whom they are accountable.
This statement sets out the main corporate governance practices in place throughout the financial year in accordance
with the 4th edition of the ASX Principles of Good Corporate Governance and Best Practice Recommendations.
This Statement was approved by the Board of Directors and is current as at 24 September 2021.
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
ASX Recommendation 1.1: A listed entity should have and disclose a board charter setting out:
(a) the respective roles and responsibilities of its board and management; and
(b) those matters expressly reserved to the board and those delegated to management..
The Company has complied with this recommendation.
The Board has adopted a formal charter that details the respective Board and management functions and
responsibilities. A copy of this Board Charter is available in the Corporate Governance section of the Company’s website
at www.lepidico.com.
ASX Recommendation 1.2: A listed entity should
(a) undertake appropriate checks before appointing a director or senior executive or putting someone forward for
election as a director; and
(b) provide security holders with all material information in its possession relevant to a decision on whether or not
to elect or re-elect a director.
The Company has complied with this recommendation.
Information in relation to Directors seeking election and/or re-election is set out in the Directors report and Notice of
Annual General Meeting.
ASX Recommendation 1.3: A listed entity should have a written agreement with each director and senior executive
setting out the terms of their appointment.
The Company has complied with this recommendation.
The Company has in place written agreements with each Director and Senior Executive.
ASX Recommendation 1.4: The company secretary of a listed company should be accountable directly to the Board,
through the chair, on all matters to do with the proper functioning of the Board.
The Company has complied with this recommendation.
The Board Charter provides for the Company Secretary to be accountable directly to the Board through the Chair.
ASX Recommendation 1.5: A listed entity should:
(a) have and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the
composition of its board, senior executives and workforce generally; and
(c) disclose in relation to each reporting period:
(1) the measurable objectives set for that period to achieve gender diversity;
(2) the entity’s progress towards achieving those objectives; and
(3) either:
(A) the respective proportions of men and women on the board, in senior executive positions and across
the whole workforce (including how the entity has defined “senior executive” for these purposes); or
(B) if the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent
“Gender Equality Indicators”, as defined in and published under that Act.
31
2021 LEPIDICO ANNUAL REPORT If the entity was in the S&P / ASX 300 Index at the commencement of the reporting period, the measurable objective
for achieving gender diversity in the composition of its board should be to have not less than 30% of its directors of
each gender within a specified period.
The Company has complied with this recommendation.
The Company has adopted a Diversity Policy which is available in the Corporate Governance section of the Company’s
website at www.lepidico.com.
The table below sets out the measurable objectives for the 2021 financial year and provides details on the progress of the
Company toward achieving them:
Objective
Results
Develop baseline gender diversity data for Namibia and
the UAE as well as any other jurisdictions the Company is
operating in.
Ensuring that recruitment is made from a diverse pool of
qualified candidates. Where appropriate, a professional
recruitment firm shall be engaged to select a diverse range
of suitably qualified candidates.
Relevant national data sought for Namibia and UAE
from the consultants engaged to complete the
Environment and Social Impact Assessments for the
Phase 1 Project.
No new staff members were recruited for in FY2021.
This protocol is to be adhered to for all future
recruitment.
To ensure that in the interview process for each Director
and/or senior executive position there is at least an equal
number of females on the interview panel.
No new Directors or senior executives were recruited
during the 2021 financial year. This protocol is to be
adhered to for all future recruitment.
Support community led programmes empowering women
and ending discrimination.
Preparations for community programmes in the Karibib
area, Namibia started in early 2020 but were suspended
when COVID-19 related austerity measures were
introduced in March 2020. A community survey was
undertaken for the Karibib Project ESIA which provides
a reference/baseline for developing future community
programmes that empower women in the community
Gender Representation
The proportion of women employed by the Company as at 30 June 2021 is listed below:
Level
Non-Executive Directors
Senior Executive Positions (including Executive Director)1
Management
Non-Management2
All Employees2
2021
33%
25%
0%
67%
33%
2020
33%
25%
0%
50%
33%
1 “Senior Executive” for the purpose of gender representation is defined to mean the Managing Director and his direct reports.
2 Includes full-time, part-time and regular casual employees.
32
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 1.6: A listed entity should:
(a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual
directors; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that
process during or in respect of that period.
The Company has complied with this recommendation.
The Company’s Board Charter outlines the process for evaluating the performance of the Board and its Committees.
In accordance with this process, Board evaluation questionnaires were provided to each member of the Board in order to
assess the performance of the individual Director, the Board as a whole, Committees of the Board and the Managing Director.
The completed questionnaires are provided to the Chair of the Nomination and Remuneration Committee and are used by the
Board to review and discuss the performance of the Board as a whole, its Committees and individual Directors.
If it is apparent that there are problems which cannot be satisfactorily considered by the Board itself, the Board may decide to
engage an independent adviser to undertake this review.
A performance review was undertaken for the reporting period.
ASX Recommendation 1.7: A listed entity should:
(a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting
period; and
(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that
process during or in respect of that period.
The Company has complied with this recommendation.
The Company has in place procedures for evaluating the performance of its senior executives overseen by the Nomination and
Remuneration Committee. This evaluation is based on specific criteria, including the business performance of the Company and
its subsidiaries, whether strategic objectives are being achieved and the development of management and personnel.
A performance review was undertaken for the reporting period.
PRINCIPLE 2: STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE
ASX Recommendation 2.1: The board of a listed entity should:
(a) have a nomination committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) chaired by an independent director;
and disclose:
(3) the charter of the committee;
(4) the members of the committee; and
as at the end of each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board
succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and responsibilities effectively.
The Company has complied with this recommendation.
The members of the Committee, the number of meetings held during the financial period and the individual attendance of
the members at those meetings are set out in the Directors’ Report included in the Lepidico Annual Report.
A copy of the Committee’s Charter is available in the Corporate Governance section of the Company’s website
at www.lepidico.com.
33
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 2.2: A listed entity should have and disclose a Board skills matrix setting out the mix of skills that
the Board currently has or is looking to achieve in its membership.
The Company has complied with this recommendation.
The Board has established a skill matrix. On a collective basis the Board has the following skills:
Area
Strategic expertise
Specific industry knowledge
International experience
Accounting and finance
Legal and governance
Risk management
Sustainability
Board Skill and Experience
Ability to identify and critically assess strategic opportunities and threats and
develop strategies.
Experience as a Director, CEO, CFO or other officeholder or similar in medium
sized entities.
Senior executive, advisory or board experience in the resources sector
including exploration, mineral resource project development, mining and
mineral processing operations, and mineral/chemical process development.
Relevant tertiary degree or professional qualification.
An understanding of the complexities of operating in foreign jurisdictions.
Experience in and exposure to multiple cultural, regulatory and business
environments.
Senior executive experience in financial accounting and reporting, or business
development or board remuneration and nomination committee experience.
Relevant tertiary degree or professional qualification.
Board audit committee experience.
Ability to read and comprehend the Company’s accounts, financial
material presented to the Board, financial reporting requirements and an
understanding of corporate finance.
Relevant tertiary degree or professional qualification.
Listed entity board and/or committee experience.
Experience in organisations with a strong focus on and adherence to
governance standards.
Experience in general corporate, mining, fiscal and labour laws and/or
the ability to consider the legal requirements of the Company’s business
operations and transactions contemplated by the Company, across the
multiple jurisdictions in which it operates.
Ability to identify and monitor risks to which the Company is, or has the
potential to be, exposed.
Experience and knowledge of working on sustainability activities directly and/
or as part of operational responsibility.
Experience in tailoring environmental and social practices to local
requirements found in foreign jurisdictions and also adhere to recognised
industry best practices.
Experience with capital markets
Experience in corporate finance and the equity/debt or capital markets.
Investor relations
Experience in identifying and establishing relationships with shareholders,
potential investors, institutions and equity analysts.
34
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 2.3: A listed entity should disclose:
(a) the names of the directors considered by the board to be independent directors;
(b) if a director has an interest, position or affiliation or relationship described in 2.3 but the board is of the opinion
that it does not compromise the independence of the director, the nature of the interest, position or relationship in
question and an explanation of why the board is of that opinion; and
(c) provide details in relation to the length of service of each Director.
The Company has complied with this recommendation.
In determining a Director's independence, the Board considers those relationships which may affect independence as
contained in the 4th edition of the ASX Corporate Governance Principles and Recommendations.
In each case, the materiality of the interest, position, association or relationship is assessed to determine whether it might
interfere, or might reasonably be seen to interfere, with the Director’s capacity to bring an independent judgment to bear on
issues before the Board and to act in the best interests of the Company and its security holders generally.
The Company Secretary maintains a register for the purposes of identifying the existence of any transactions between
the Director’s related parties and the Company and the impact (if any) such transactions (or other factors) may have on a
Director’s independence which is tabled at each Board Meeting.
The independence and length of service of each Director is as follows:
Director
Independent
Date of Appointment
Length of Service1
Mr Gary Johnson
Mr Julian (Joe) Walsh
Mr Mark Rodda
Ms Cynthia Thomas
No
No
Yes
Yes
9 June 2016
22 September 2016
22 August 2016
10 January 2018
5.1 years
4.8 years
4.7 years
3.5 years
1 Length of service is calculated to 30 June 2021
ASX Recommendation 2.4: The majority of the Board of a listed entity should be independent Directors.
The Company has not complied with this recommendation.
As in ASX recommendation 2.3, the majority of the Board is not considered to be independent.
The Board considers that its current composition is appropriate given the current size and stage of development of the
Company and allows for the best utilisation of the experience and expertise of its members.
Directors having a conflict of Interest in relation to a particular item of business must absent themselves from the Board
meeting before commencement of discussion on the topic.
ASX Recommendation 2.5: The Chair of a listed entity should be an independent Director and, in particular, should not be
the same person as the CEO of the entity.
The Company has not complied with this recommendation.
The Chair, Mr Gary Johnson is not considered to be an independent Director. Notwithstanding this the Directors believe
that Mr Johnson is able to, and does make, quality and independent judgement in the best interests of the Company on all
relevant issues before the Board.
Mr Joe Walsh is Managing Director of the Company.
35
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 2.6: A listed entity should have a program for inducting new Directors and for periodically
reviewing whether there is a need for existing directors to undertake professional development to maintain the skills and
knowledge needed to perform their role as directors effectively.
The Company has complied with this recommendation.
The Nomination and Remuneration Committee has responsibility for the approval and review of induction procedures for
new appointees to the Board to ensure that they can effectively discharge their responsibilities which will be facilitated by
the Company Secretary.
The Nomination and Remuneration Committee is also responsible for the program for providing adequate professional
development opportunities for Directors and management.
PRINCIPLE 3: INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
ASX Recommendation 3.1: A listed entity should articulate and disclose its values.
The Company has complied with this recommendation.
The Company’s strategy, vision and values is reviewed annually and available in the Corporate Governance section of the
Company’s website at www.lepidico.com.
ASX Recommendation 3.2: A listed entity should:
(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that code.
The Company has complied with this recommendation.
The Company has a Code of Conduct that sets out the principles covering appropriate conduct in a variety of contexts and
outlines the minimum standard of behaviour expected from directors, senior executives and employees.
A copy of the Company’s Code of Conduct is available in the Corporate Governance section of the Company’s website at
www.lepidico.com.
There were no material breaches of the code during the reporting period.
ASX Recommendation 3.3: A listed entity should:
(a) have and disclose a Whistleblower Policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
The Company has complied with this recommendation.
The Company has a Whistleblower Policy and a copy is available in the corporate governance section of the Company’s
website at www.lepidico.com.
There were no material incidents reported under the Whistleblower Policy during the reporting period.
ASX Recommendation 3.4: A listed entity should:
(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.
The Company has complied with this recommendation.
The Company has an Anti-bribery and Corruption Policy and a copy is available in the Corporate Governance section of the
Company’s website at www.lepidico.com.
There were no material incidents reported under the Anti-bribery and Corruption Policy during the reporting period.
36
2021 LEPIDICO ANNUAL REPORT PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
ASX Recommendation 4.1: The Board of a listed entity should:
(a) have an audit committee which:
(1) has at least three members, all of whom are non-executive directors and a majority of which are independent
directors; and
(2) is chaired by an independent director, who is not the chair of the board;
and disclose:
(3) the charter of the committee,
(4) the relevant qualifications and experience of the members of the committee; and
(5) In relation to each reporting period, the number of times the committee met throughout the period and the
individual attendances of the members at those meetings; or
(b) If it does not have an audit committee, disclose that fact and the processes it employs that independently verify and
safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement partner.
The Company has complied with this recommendation.
A copy of the Audit and Risk Committee Charter is available in the Corporate Governance section of the Company's website
at www.lepidico.com.
The relevant qualifications and experience of the members of the Audit and Risk Committee, the number of times the
Committee met during the financial period and the individual attendances of the members at those meetings are set out in
the Directors’ Report included in the Lepidico Annual Report.
ASX Recommendation 4.2: The Board of a listed entity should, before it approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have
been properly maintained and that the financial statements comply with the appropriate accounting standards and give
a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the
basis of a sound system of risk management and internal control which is operating effectively.
The Company has complied with this recommendation.
ASX Recommendation 4.3: A listed entity should disclose its process to verify the integrity of any periodic corporate
report it releases to the market that is not audited or reviewed by the external auditor.
The Company has complied with this recommendation.
Where a periodic corporate report is not required to be audited or reviewed by an external auditor, Lepidico conducts
an internal verification process to confirm the integrity of the report, to ensure that the content of the report is materially
accurate, and provides investors with appropriate information to make informed investment decisions.
37
2021 LEPIDICO ANNUAL REPORT PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
ASX Recommendation 5.1: A listed entity should have and disclose a written policy for complying with its continuous
disclosure obligations under listing rule 3.1.
The Company has complied with this recommendation.
A copy of the Continuous Disclosure Policy is available in the Corporate Governance section of the Company's website at
www.lepidico.com.
ASX Recommendation 5.2: A listed entity should ensure that its board receives copies of all material market
announcements promptly after they have been made.
The Company has complied with this recommendation.
ASX Recommendation 5.3: A listed entity that gives a new and substantive investor or analyst presentation should
release a copy of the presentation materials on the ASX Market Announcements Platform ahead of that presentation.
The Company has complied with this recommendation.
PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS
ASX Recommendation 6.1: A listed entity should provide information about itself and its governance to investors via its
website.
The Company has complied with this recommendation.
The Company’s website at www.lepidico.com contains information about the Company’s projects, Directors and
Management and the Company’s corporate governance practices, policies and charters. All ASX announcements made to
the market, including annual and half year financial results are posted on the website as soon as they have been released
by the ASX. The full text of all notices of meetings and explanatory material, the Company’s Annual Report and copies of all
investor presentations are posted on the website.
ASX Recommendation 6.2: A listed entity should design and implement an investor relations program to facilitate
effective two-way communication with investors.
The Company has complied with this recommendation.
The Company’s Managing Director and Investor Relations Consultant are the Company’s main contacts for investors and
make themselves available to discuss the Company’s activities when requested. In addition to announcements made in
accordance with its continuous disclosure obligations, the Company, from time to time, prepares and releases general
investor updates about the Company. During the financial year the Company engaged Edison Group to facilitate the
Company’s investor and public relations programs with a focus on electronic media communication
Contact with the Company can be made via an email address provided on the website and investors can subscribe to the
Company’s email contact list.
38
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 6.3: A listed entity should disclose how it facilitates and encourages participation at meetings of
security holders.
The Company has complied with this recommendation.
The Company encourages participation of shareholders at any general meetings and its Annual General Meeting each
year. Shareholders are encouraged to lodge direct votes or proxies subject to the adoption of satisfactory authentication
procedures if they are unable to attend the meeting. At each Annual General Meeting the Chair allows a reasonable
opportunity for shareholders to ask questions of the Board and the external auditors.
The full text of all notices of meetings and explanatory material are posted on the Company’s website at www.lepidico.com
as soon as they have been released by the ASX.
ASX Recommendation 6.4: A listed entity should ensure that all substantive resolutions at a meeting of security holders
are decided by a poll rather than by a show of hands.
The Company has complied with this recommendation.
The proxy numbers received in advance of a meeting of shareholders are made available for shareholders attending the
meeting in person. Where a show of hands is not aligned with the proxy numbers the Chair will call for a poll.
Given the potential health risks and government restrictions in response to the coronavirus pandemic, Lepidico will
implement various measures to facilitate shareholder participation at the 2021 AGM, which will include a live webcast. All
resolutions will effectively be decided by a poll, allowing all shareholders to vote based on the number of securities held by
them. Voting on a poll also allows shareholders to register their vote regardless of whether they attend the meeting or not.
Further details about how shareholders can participate at the 2021 AGM will be provided in the 2021 Notice of Meeting.
ASX Recommendation 6.5: A listed entity should give security holders the option to receive communications from, and
send communications to, the entity and its security registry electronically.
The Company has complied with this recommendation.
Lepidico has a dedicated email address to handle shareholder communications.
Lepidico’s securities registrar, Automic Group, facilitates the provision of communications between Lepidico and its
shareholders electronically. Shareholders can make a choice about how they wish to receive information from Lepidico
and can elect to receive Lepidico documents including notices of meetings, annual reports and other correspondence
electronically. Shareholders can also lodge their proxies electronically.
39
2021 LEPIDICO ANNUAL REPORT PRINCIPLE 7: RECOGNISE AND MANAGE RISK
ASX Recommendation 7.1: The Board of a listed entity should:
(a) have a committee or committees to oversee risk, each of which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
and disclose:
(3) the charter of the committee,
(4) the members of the committee and
(5) as at each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it
employs for overseeing the entity’s risk management framework.
The Company has complied with this recommendation.
A copy of the Audit and Risk Committee Charter is available in the Corporate Governance section of the Company's website
at www.lepidico.com.
The members of the Committee, the number of meetings held during the financial period and the individual attendance of
the members at those meetings are set out in the Directors’ Report included in the Lepidico Annual Report.
ASX Recommendation 7.2: The Board or a committee of the Board should:
(a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound and
that the entity is operating with due regard to the risk appetite set by the board; and
(b) disclose, in relation to each reporting period, whether such a review was undertaken.
The Company has complied with this recommendation.
The charter of the Audit and Risk Committee provides that the committee will annually review the Company’s risk
management framework to ensure that it remains sound.
The Board conducted such a review in relation to the reporting period.
ASX Recommendation 7.3: A listed entity should disclose:
(a) if it has an internal audit function, how the function is structured and what role it performs; or
(b) if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually
improving the effectiveness of governance, risk management and internal control processes.
The Company has complied with this recommendation.
Given the Company’s current size and level of operations it does not have an internal audit function. The Audit and
Risk Committee oversees the Company’s risk management systems, practices and procedures to ensure effective risk
identification and management and compliance with internal guidelines and external requirements and monitors the quality
of the accounting function.
40
2021 LEPIDICO ANNUAL REPORT ASX Recommendation 7.4: A listed entity should disclose whether it has any material exposure to economic,
environmental and social sustainability risks and if it does how it manages or intends to manage those risks.
The Company has complied with this recommendation.
The Company has exposure to economic risks, including general economy wide economic risks and risks associated with
the economic cycle which impact on the price and demand for minerals which affects the sentiment for investment in
exploration companies.
There will be a requirement in the future for the Company to raise additional funding to pursue its business objectives.
The Company’s ability to raise capital may be affected by these economic risks.
The Company has in place risk management procedures and processes to identify, manage and minimise its exposure to
these economic risks where appropriate.
The operations and proposed activities of the Company are subject to International, Federal and State laws and regulations
concerning the environment. As with most exploration projects and mining operations, the Company’s activities are
expected to have an impact on the environment, particularly if advanced exploration or mine development proceed.
Environmental and Social Management plans were completed in FY2021 for all planed operations which meet International
Finance Corporation and Equator Principal standards.
It is the Company’s intention to conduct its activities to the highest standard of environmental obligation, including
compliance with all environmental laws.
The Board currently considers that the Company does not have any material exposure to social sustainability risk.
The Company’s Corporate Code of Conduct outlines the Company’s commitment to integrity and fair dealing in its business
affairs and to a duty of care to all employees, clients and stakeholders. The code sets out the principles covering appropriate
conduct in a variety of contexts and outlines the minimum standard of behaviour expected from employees when dealing
with stakeholders.
41
2021 LEPIDICO ANNUAL REPORT PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY
ASX Recommendation 8.1: The Board of a listed entity should:
(a) have a remuneration committee which:
(1) has at least three members, a majority of whom are independent directors; and
(2) is chaired by an independent director;
and disclose:
(3) the charter of the committee,
(4) the members of the committee and
(5) as at each reporting period, the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or
(b) If it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level
and composition of remuneration for directors and senior executives and ensuring that such remuneration is
appropriate and not excessive.
The Company has complied with this recommendation.
A copy of the Remuneration and Nomination Committee Charter is available in the Corporate Governance section of the
Company's website at www.lepidico.com.
The members of the Committee, the number of meetings held during 2021 and the individual attendance of the members at
those meetings are set out in the Directors’ Report included in the Lepidico Annual Report.
ASX Recommendation 8.2: A listed entity should separately disclose its policies and practices regarding the remuneration
of non-executive Directors and the remuneration of executive Directors and other senior executives.
The Company has complied with this recommendation.
The Non-Executive Directors are paid a fixed annual fee for their service to the Company as a Non-Executive Directors and
additional fixed fees for Board Committee participation. Non-Executive Directors may, subject to shareholder approval, be
granted equity-based remuneration.
Executives of the Company typically receive remuneration comprising a base salary component and other fixed benefits
based on the terms of their employment agreements with the Company and potentially the ability to participate in short
term incentives and may, subject to shareholder approval and if appropriate, be granted equity based remuneration.
ASX Recommendation 8.3: A listed entity which has an equity-based remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b) disclose the policy or a summary of that policy.
The Company has complied with this recommendation.
Participants in any Company equity-based remuneration scheme are not permitted to enter into transactions which limit the
economic risk of participating in the scheme.
42
2021 LEPIDICO ANNUAL REPORT FINANCIAL REPORT
TABLE OF CONTENTS
DIRECTORS’ REPORT
AUDITOR'S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOW
NOTES TO THE FINANCIAL STATEMENTS
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
SUPPLEMENTARY (ASX) INFORMATION
44
63
64
65
66
67
68
99
100
104
2021 LEPIDICO ANNUAL REPORT
43
DIRECTORS’ REPORT
The Directors of Lepidico Ltd (Directors) present their report on the Consolidated Entity consisting of Lepidico Ltd (the
Company or Lepidico) and the entities it controlled at the end of, or during, the year ended 30 June 2021 (Consolidated
Entity or Group).
DIRECTORS
The names of the Directors in office and at any time during, or since the end of, the year are:
Mr Gary Johnson
Mr Joe Walsh
Mr Mark Rodda
Ms Cynthia Thomas
Non-executive Chair
Managing Director
Non-executive Director
Non-executive Director
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
CURRENT DIRECTORS
Mr Gary Johnson - Chair (Non-executive)
Qualifications - MAusIMM, MTMS, MAICD
Mr Johnson has over 40 years’ experience in the mining industry as a metallurgist, manager, owner, director and managing
director possessing broad technical and practical experience of the workings and strategies required by successful mining
companies. Gary is a principal and part owner of Strategic Metallurgy Pty Ltd, which specialises in high-level metallurgical
and strategic consulting. He has been a Director of the Company since 9 June 2016.
Special responsibilities:
Member of Audit and Risk Committee
Member of the Remuneration and Nomination Committee
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd (ASX listed)
Director of St-Georges Platinum and Base Metals Ltd (CSE listed Company)
Former Directorships of listed public companies in the last 3 years:
None
Mr Julian “Joe” Walsh - Managing Director (Executive)
Qualifications - BEng, MSc
Mr Walsh is a resources industry executive, mining engineer and geophysicist with over 30 years’ experience working for
mining and exploration companies, and investment banks in mining related roles. Joe joined Lepidico as Managing Director
in 2016. Prior to this he was the General Manager Corporate Development with PanAust Ltd and was instrumental in the
evolution of the company from an explorer in 2004 to a US$2+billion, ASX 100 multi-mine copper and gold company. Joe
has extensive equity capital market experience and has been involved with the technical and economic evaluation of many
mining assets and companies around the world.
Special responsibilities:
Member of the Diversity Committee
Other Current Directorships of listed public companies:
None
Former Directorships of listed public companies in the last 3 years:
None
44
2020 LEPIDICO ANNUAL REPORT
Mr Mark Rodda - Non-Executive Director
Qualifications - BA, LLB
Mr Rodda is a lawyer and consultant with over 24 years’ private practice, in-house legal, company secretarial and corporate
experience. Mr Rodda has considerable practical experience in the management of local and international mergers and
acquisitions, divestments, exploration and project joint ventures, strategic alliances, corporate and project financing
transactions and corporate restructuring initiatives. Mark currently manages Napier Capital Pty Ltd, a business established
in 2008 to provide clients with specialist corporate services and assistance with transactional or strategic projects. Prior
to its 2007 takeover by Norilsk Nickel for in excess of $+6 billion, Mark held the position of General Counsel and Corporate
Secretary for LionOre Mining International Ltd, a company with operations in Australia and Africa and listings on the TSX,
LSE and ASX.
Special responsibilities:
Chair of the Remuneration and Nomination Committee
Member of Audit and Risk Committee
Member of the Diversity Committee
Other Current Directorships of listed public companies:
Director of Antipa Minerals Ltd
Former Directorships of listed public companies in the last 3 years:
None
Ms Cynthia Thomas – Non-Executive Director
Qualifications – B.Com, MBA
Ms Thomas has over 30 years’ of banking and mine finance experience, and is currently the Principal of Conseil Advisory
Services Inc. (Conseil), an independent financial advisory firm specialising in the natural resource industry which she founded
in 2000. Prior to founding Conseil, Cynthia worked with Bank of Montreal, Scotiabank and ScotiaMcLeod in the corporate
and investment banking divisions. Cynthia holds a Bachelor of Commerce degree from the University of Toronto and a
Masters in Business Administration from the University of Western Ontario.
Special responsibilities:
Chair of Audit and Risk Committee
Chair of the Diversity Committee
Member of the Remuneration and Nomination Committee
Other Current Directorships of listed public companies:
Executive Chair (Interim CEO and CFO) of Victory Nickel Inc. (CSE listed)
Former Directorships of listed public companies in the last 3 years:
None
COMPANY SECRETARIES
Mr Alex Neuling
Qualifications: BSc, FCA (ICAEW), FCIS
Mr Neuling has extensive corporate and financial experience including as director, chief financial officer and/or company
secretary of various ASX-listed companies in the mineral exploration, mining, oil and gas and other sectors. Alex is principal
of Erasmus Consulting, which provides company secretarial and financial management consultancy services to ASX-listed
companies. In addition to his professional qualifications, Alex also holds a degree in Chemistry from the University of Leeds
in the United Kingdom.
Ms Shontel Norgate
Qualifications: CA, AGIA ACIS
Ms Norgate is a Chartered Accountant with over 25 years’ experience in the resources industry including debt and equity
finance, financial reporting, project management, corporate governance, commercial negotiations and business analysis
experience in finance and administration. Prior to joining Lepidico Shontel was CFO for ten years with TSX-listed resources
company, Nautilus Minerals Inc. Prior to her appointment at Nautilus Minerals, Ms Norgate was Financial Controller with
Macarthur Coal Ltd and Southern Pacific Petroleum NL, both listed on the ASX and commenced her career as an auditor
with Price Waterhouse (now PricewaterhouseCoopers).
2020 LEPIDICO ANNUAL REPORT
45
MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the year ended 30 June 2021,
and the number of meetings attended by each director.
Full Board
Meetings
Audit & Risk
Committee
Meetings
Nomination &
Remuneration
Committee
Meetings
Diversity
Committee
Meetings
No.
eligible
to attend
No.
attended
No.
eligible
to attend
No.
attended
No.
eligible
to attend
No. attended
No.
eligible
to attend
No.
attended
Mr Gary Johnson
Mr Joe Walsh
Mr Mark Rodda
Ms Cynthia Thomas
5
5
5
5
5
5
5
5
2
0
2
2
2
0
2
2
2
0
2
2
2
0
2
2
0
2
2
2
0
2
2
2
INFORMATION ON DIRECTORS’ INTERESTS IN SECURITIES OF LEPIDICO
As at the date of this report, the notifiable interests held directly and through related bodies corporate or associates of the
Directors in shares and options of Lepidico are:
Mr Gary Johnson
Mr Joe Walsh
Mr Mark Rodda
Ms Cynthia Thomas
PRINCIPAL ACTIVITIES
Number of fully
paid ordinary shares
370,618,485
33,108,572
-
-
Number of options
28,433,188
46,429,286
22,500,000
22,500,000
403,727,057
119,862,474
The principal activity of the Consolidated Entity during the financial year was mineral exploration and development, and
development of proprietry technologies, including: L-Max®, S-Max® and LOH-Max®.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
All statements other than statements of historical fact included in this report including, without limitation, statements
regarding future plans and objectives of Lepidico, are forward-looking statements. Forward-looking statements can be
identified by words such as "anticipate", "believe", "could", "estimate", "expect", "future", "intend", "may", "opportunity",
"plan", "potential", "project", "seek", "will" and other similar words that involve risks and uncertainties. These statements
are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding
future events and actions that are expected to take place. Such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which
are beyond the control of the Company, its directors and management of Lepidico that could cause Lepidico’s actual results
to differ materially from the results expressed or anticipated in these statements.
The Company cannot and does not give any assurance that the results, performance or achievements expressed or implied
by the forward-looking statements contained in this release will actually occur and investors are cautioned not to place any
reliance on these forward-looking statements. Lepidico does not undertake to update or revise forward-looking statements,
or to publish prospective financial information in the future, regardless of whether new information, future events or any
other factors affect the information contained in this release, except where required by applicable law and stock exchange
listing requirements.
46
2021 LEPIDICO ANNUAL REPORT DIVIDENDS PAID OR RECOMMENDED
The Directors recommend that no dividend be paid for the year ended 30 June 2021, nor have any amounts been paid or
declared by way of dividend since the end of the previous financial year.
SUMMARY REVIEW OF OPERATIONS
For the financial year ending 30 June 2021 the Group recorded a net profit after tax of $282,556 (2020: net loss after tax
$10,118,237) and a net cash inflow from operations of $1,036,610 (2020: net outflow $4,676,482).
The net assets of the Group increased to $74,949,679 at 30 June 2021 (2020: $59,189,215).
PHASE 1 PROJECT DEVELOPMENT
Karibib Project (80%), Namibia
Karibib is fully permitted for the re-development of two open pit mines at Rubicon and Helikon 1, feeding lithium mica ore
to a central mineral concentrator that employs conventional flotation technology. Major permits include the Mining Licence
(ML204), water extraction permit and Environmental Compliance Certificates (ECC) for the Project including a separate
ECC awarded for the overhead power transmission line following approval of the power line EIA by the regulator.
Lycopodium Minerals Pty (Lycopodium) was awarded the engineering, procurement and construction management
(EPCM) contract for the Phase 1 concentrator at Karibib with early services commencing in May 2021 and FEED activities in
June. Two long lead item equipment packages were awarded for tender, for the ball mill and thickener. Positive responses
have been received from all tenderers, with equipment selection scheduled by September 2021. The control estimate for
construction is on track to be finalised before end December 2021, confirming the project schedule and budget.
Knight Piésold started on the infrastructure engineering package in May 2021, which includes: access road upgrade,
construction of on-site roads, Rubicon waste management area starter pad construction, site water management structures
and bulk earthworks pads for the concentrator, non-process buildings and stockpile areas. The geotechnical investigation
for the flotation plant has been completed, and the pad design finalised and handed over to Lycopodium.
A draft agreement is under negotiation with a local utility for supply of 66kV grid power to the Karibib operations. The
national grid in Namibia has significant contributions by solar and hydro with more renewables capacity coming on-stream.
It is expected that 80% of grid power will be from renewable sources by 2025.
The connection to the grid requires the construction of a 30km long overhead line and substation at Rubicon Operations.
The capital has been estimated at $3.5 million, which is included in the Definitive Feasibility Study (DFS) estimate. It is
planned that project construction will be managed by Lepidico through an EPC contract with an approved NamPower
contractor. The line will be handed over to NamPower to own and maintain for a maintenance and grid access fee. The
Rubicon substation will be owned and maintained by Lepidico.
Preparations have started for tender packages and contracts for Karibib bulk earthworks and power supply construction,
with site works at Karibib scheduled to start early in 2022.
A considerable tonnage of high-grade in-situ lepidolite mineralisation is exposed at surface at Rubicon with negligible
requirement for mining of waste. Ore mining is planned to start in December quarter 2022, ahead of concentrator
commissioning.
Chemical Conversion Plant (100%), Abu Dhabi
The Phase 1 Project chemical conversion plant, to be built in Abu Dhabi represents a unique opportunity globally for
production of the strategic metals rubidium and caesium, for which the United States is entirely reliant on imports.
Furthermore, lithium, caesium, rubidium and potash, the main Phase 1 products, are all on the U.S. Government list of 35
Critical Minerals, making Lepidico’s technologies and the Project strategically significant.
The chemical plant site (Figure 1) is approximately 57,000m² and is located within an industrial free zone, which allows full
foreign ownership as well as tax exemptions on imports and exports. The off-site infrastructure is supplied through a land
lease agreement with Abu Dhabi Ports (the manager of Kalifa Industrial Zone Abu Dhabi – KIZAD) and includes direct
connection to natural gas, 11kV power, industrial water, and sewer services on the east side of the plot, roads and drainage.
The KIZAD container port where concentrate from Walvis Bay, Namibia will be imported is 15km by road from the plant site.
47
2021 LEPIDICO ANNUAL REPORT
Figure 1: Schematic of proposed chemical plant site with KIZAD container port in the background
During the year the Company established an incorporated subsidiary in Abu Dhabi, Lepidico Chemicals Manufacturing Ltd,
and a pre-operations Industrial Licence was awarded for the Phase 1 chemical plant site within KIZAD.
The Preliminary Economic Review (PER) for the Phase 1 chemical plant site within KIZAD was approved by the Environment
Agency, EAD, and an environmental approval to construct awarded. The key commercial terms for the Company’s Musataha
Agreement with Abu Dhabi Ports have been agreed, which, following execution will entitle the Company to lease the land
for the construction and operation of the chemical plant for a period of 25 years. Execution of the Musataha is planned to
coincide with securing full funding for the Project.
The Environment and Social Impact Assessment (ESIA) for the Chemical Plant was completed in parallel with the PER. As
for the Karibib Operations, this second ESIA has been completed to Equator Principles and IFC (Performance Standards)
environmental and social standards to support the debt funding strategy. Both ESIAs have been made available to debt
financiers.
Lycopodium was awarded the EPCM contract for the Phase 1 chemical plant, which employs Lepidico’s proprietary
processes technologies that include L-Max® and LOH-Max®. The selection of Lycopodium followed its successful completion
of the engineering study for the Definitive Feasibility Study in May 2020.
Early services and FEED works commenced during the latter part of the year, with long lead equipment packages for
the filters and crystallisers issued for tender. All tenderers have provided positive responses, with equipment selection on
track by end November 2021. The control estimate for chemical plant construction is scheduled to be finalised during the
December 2021 quarter.
A UAE based consultant has been appointed to manage the building permit process with the Abu Dhabi Municipality and
Abu Dhabi Ports. Site investigation including geotechnical drilling is progressing for the plant and associated infrastructure,
with input from Lycopodium to finalise the earthworks engineering scope.
Sulphuric acid represents the largest single consumable and operating cost for Phase 1. Acid supply proposals for the first
three years of operation have been received, with the process on-track for contract award by end 2021.
Greenhouse Gas Report
The Company received a carbon footprint assessment for the integrated Phase 1 Project from leading industry consultant
GHD Pty Ltd (GHD). Scope 1 and 2 emissions¹ intensity associated with the Abu Dhabi Phase 1 chemical plant was just
7.46t CO2-e/t² lithium hydroxide, which GHD advised as being, “low compared with other emission intensities reported or
derived from lithium hydroxide production facilities.” Similar emissions associated with mining and the mineral concentrator
gave an emissions intensity of 0.13 tCO2-e/t concentrate (1.37t CO2-e/t lithium hydroxide), which is, “comparable with other
similar lithium mine and concentrator projects.”
1 Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam,
heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company's value chain.
2 Tonnes of carbon dioxide equivalent
48
2021 LEPIDICO ANNUAL REPORT GHD's work identifies Lepidico’s L-Max® and LOH-Max® technologies as providing a lower CO2 intensity solution for the
production of lithium chemicals versus conventional spodumene conversion (Figure 2). Lepidico has established a Scope 1
and 2 emissions reduction target of 2.0t CO2-e/ t lithium hydroxide associated with a greater proportion of power sourced
from non-greenhouse gas generating sources and solar pre-heating of boiler water to reduce natural gas consumption.
Further reduction opportunities have been identified including from the substitution of green hydrogen for gas and the use
of electric mobile equipment for mining, which have the potential to reduce Phase 1 emissions to be best in class within the
lithium industry. In addition, a formal assessment of Scope 3 inventory emissions is planned once Phase 1 is fully operational,
which GHD has advised should be competitive relative to the industry due to emissions savings from by-products, estimated
at 34,009 tCO2-e per year. This figure excludes any emission savings relating to use of caesium and rubidium compounds,
which could also be significant.
Figure 2: CO2 intensity comparison for lithium hydroxide production tCO2-e/t LiOH
Lithium price
tCO2-e/t LiOH.H2O
14
12
10
8
6
4
2
0
Brine
Integrated
Spondumene
Australia-China
Spondumene
Lepidico
Integrated
Low/Target
Range
Source: GHD data
The excellent environmental and social credentials associated with Phase 1 are proving important in Lepidico’s advanced
debt and offtake negotiations.
Product Marketing
Excellent progress was made during the year in securing offtake agreements for both the high-value and bulk products to
be manufactured by the Phase 1 chemical plant. Engagement with chemical consumers has enabled a structured three-
pronged lithium, caesium and rubidium supply strategy to be developed.
1. EV supply chain direct sales: enormous growth is predicted over the balance of the current decade in this industry sector.
Phase 1 is designed to produce high specification lithium chemicals from hard rock sources and will have the capability
of switching between supply of lithium hydroxide monohydrate and lithium carbonate as required by the customer. This
flexibility has been developed to meet the future needs of EV manufacturers and provides a competitive advantage over
single chemical producer projects. Lepidico’s lithium supply strategy includes a long-term commitment to at least one
consumer within the EV supply chain for 60% plus of Phase 1 lithium chemical output. Lithium supply discussions are now
being prioritised with three consumers.
2. Agency sales agreement: up to 40% of planned production from Phase 1 is expected to be available for sale under agency
agreement(s). This will allow supply into local markets with short logistics routes to be maximised and a broad consumer
base to be established. Building consumer confidence in Lepidico’s products will benefit future supply from a planned
Phase 2 project. Discussions are progressing with experienced chemical trading houses for supply across all industry
segments that consume lithium chemicals.
3. Fine chemical direct sales: for lithium, caesium and rubidium chemicals. Discussions are progressing under confidentiality
with several consumers and refiners of high-purity alkali metal compounds for offtake of these Phase 1 high-value
products.
49
2021 LEPIDICO ANNUAL REPORT
One consumer has advised that it requires a relatively substantial sample of lithium hydroxide for evaluation which would
require Lepidico’s pilot plant to be run again for at least a two week steady state campaign. This will only be committed to
once negotiations have advanced sufficiently.
The caesium market is in just as dynamic a phase as lithium, with a substantial supply deficit on the near horizon as a major
chemical producer ceases production due to upstream mineral feedstock depletion. This leaves the caesium and rubidium
markets being supplied by a single size manufacturer. Lepidico’s Phase 1 chemical plant is the only advanced stage source of
new caesium and rubidium supply globally, which is scheduled to come on line at a time of substantial supply deficit.
A specialist consultant has been appointed to expand Lepidico’s reach to caesium and rubidium chemicals consumers.
The Company is now in meaningful discussions with four groups. Binding supply agreements are being targeted for the
December quarter 2021.
As indicated previously, caesium and rubidium are both designated as Critical Minerals by the U.S. State Department and
the United States is entirely reliant of imports of these metals. Further samples of caesium and rubidium chemicals were
manufactured in the quarter to meet consumer requirements and to confirm product specifications. Requests for further
samples have recently been received and these are being manufactured in Perth.
Regional markets for the 13,000tpa of SOP, 35,000tpa of amorphous silica and approximately 70,000tpa of gypsum
were evaluated in the year by a consultant in the UAE, with a location benefit identified for these Phase 1 bulk products.
Furthermore, general imports (non-hydrocarbon) into the regional far exceed exports providing competitive back-haul rates
for cargos to premium markets for both SOP and silica products.
Phase 2 L-Max® Plant Scoping Study
Identification of strategic locations within the United States for a Phase 2 Chemical Plant was the main focus during the
year. Constructive engagement was had with Government representatives from eight States identified as being prospective.
There is considerable interest in securing direct foreign investment in the electric vehicle supply chain with some States
indicating incentives that to be equivalent to the favourable fiscal terms at the industrial free zones in the UAE. A short
list of locations is being developed with the objective of advancing discussions in early 2022 once the Phase 1 Project has
advanced to full implementation.
Walvis Bay in Namibia and Abu Dhabi will continue to be evaluated as prospective locations for a Phase 2 plant along with
Europe. The Scoping Study contemplates a nominal output capacity of 20,000tpa lithium carbonate equivalent (LCE).
Under the P1P DFS a scoping study capital estimate was developed for a nominal 20,000tpa LCE Phase 2 Project, with
associated capital intensity was estimated to be US$16,900/t LCE and just US$10,500/t LCE on a net of by-products basis.
RESEARCH & PRODUCT DEVELOPMENT
Following more than a year of research and development work, Lepidico filed a provisional patent application for a process
that involves the sequestration of CO2 into a crude LOH-Max® lithium hydroxide intermediate and subsequent refining to a
nominal battery grade lithium carbonate. The process flowsheets for the refining of these two lithium chemicals mostly share
common equipment, aside from the need for CO2 reticulation and gas sparges in specific process reactors. Approximately
0.6 tonnes of CO2 will be required for each tonne of lithium carbonate produced, equivalent to around 25% of process
emissions from the upstream L-Max® plant. A preliminary evaluation by Strategic Metallurgy indicates a capital cost of less
than US$1 million will be required to integrate this lithium carbonate functionality into the back end of the Phase 1 Plant.
Completion of process design work will allow feasibility study work to start for retrofitting lithium carbonate functionality to
the Phase 1 Plant in production year two.
It is evident from discussions with both lithium-ion battery cathode and EV manufacturers that there is an emerging need for
lithium chemical companies to be able to efficiently switch between production of lithium carbonate and lithium hydroxide.
Automakers are broadening out their range of EV models that employ both lithium iron phosphate (LFP) and high nickel
content nickel-cobalt-manganese oxide (NCM), as well as other existing and evolving cathode chemistries. Adoption of a
mixed cathode strategy such as this will likely require supplies of both lithium carbonate and lithium hydroxide, in quantities
that are currently difficult to determine, due to the uncertainty of future demand for different categories of EVs, be it for
example compact, mid-range or prestige passenger vehicles, or light commercial vehicles.
Lepidico has received positive feedback from lithium chemical consumers within the EV supply chain for integrating
functionality that provides the flexibility to produce either hydroxide or carbonate from the Phase 1 Plant.
LOH-Max® application for spodumene conversion
Strategic Metallurgy completed a desk top evaluation of LOH-Max®, benchmarked against third party feasibility study level
data for conventional production of lithium hydroxide monohydrate from a lithium sulphate intermediate, sourced from a
6.0% Li2O spodumene concentrate. This evaluation coupled with results from further LOH-Max® testwork for the Phase 1
Project by Strategic Metallurgy supports a substantial US$52 million capital cost saving estimate (14% of estimated total
spodumene converter capital) for a production rate of 20,000tpa LCE (Lithium Carbonate Equivalent), largely due to the
elimination of the energy intensive sodium sulphate circuit. By not producing sodium sulphate LOH-Max® also eliminates the
risk of either attempting to sell or even dispose of sodium sulphate, the market for which, is globally mature.
50
2021 LEPIDICO ANNUAL REPORT
Strategic Metallurgy also advised that LOH-Max® may also deliver an estimated 4% increase in recovery of lithium from
concentrate to final product versus conventional spodumene processing, with an overall recovery estimate of 91% (87%
for the conventional process), equivalent to approximately an extra 1,000tpa of lithium hydroxide production for a nominal
20,000tpa converter.
LOH-Max® operating costs benefit from lower energy consumption, and lower reagent costs versus conventional conversion.
The net benefit calculated showed an estimated reduction in absolute operating cost of US$8 million per year based on the
third party feasibility study data for a 20,000tpa spodumene converter and a greater reduction in unit operating costs per
tonne of product of approximately 8% due to the increased metal recovery. Furthermore, the lower energy consumption
also leads to a reduction in CO2 emissions when LOH-Max® is employed, which when combined with the increased lithium
hydroxide output is expected to result in a meaningful reduction in carbon intensity. Opportunities to further reduce carbon
intensity have been identified but require additional work to quantify.
Improvements in mica conversion
Testwork undertaken by Strategic Metallurgy on a third party lithium mica feed stock early in the year demonstrated the
amenability of this mineralisation to L-Max® and also identified some improvements to the LOH-Max® process. Enhanced
washing efficiency allows a lithium hydroxide recycle stream to be eliminated, further simplifying the process with negligible
impact on lithium metal recovery. This improvement will be incorporated into the Phase 1 Project front end engineering and
design.
Third Party Programs
Cornish Lithium (further detail under Corporate below) has advised that it is working with Strategic Metallurgy to develop an
L-Max® and LOH-Max® pilot plant to evaluate zinnwaldite/polylithionite mineralisation sourced from the extensive St Austell
granite complex in the Southwest of England. This work will further develop Lepidico’s process technologies for application
more broadly across the various lithium mica mineral species.
EXPLORATION3
Karibib Project (80%)
Lepidico is pursuing a strategy of maximising the value of its exploration properties by implementing programs targeted at
a range of metals, which the Namibian properties are prospective for, including lithium, caesium, rubidium, tantalum, gold,
copper, tungsten and uranium.
Exploration during the year was hampered by local movement restrictions imposed in response to the COVID-19 pandemic.
Exploration activities ramped up early in May 2021 as restrictions imposed in response to the COVID-19 pandemic were
relaxed. However, COVID-19 cases in Namibia increased dramatically throughout June, necessitating temporary cessation
of exploration activities and closure of the Karibib camp. The camp reopened mid-July and exploration activities resumed,
including drilling.
Near Mine & Regional Exploration
Fourteen reverse circulation (RC) holes were drilled at Rubicon North and Rubicon West in June, prior to the cessation of
exploration activities. Pegmatite was identified in all holes, with those at Rubicon North intersecting typical Rubicon style
mineralisation. Samples from this part of the program were dispatched in early July, with assays now expected in October.
Two further priority targets were drilled in August.
Eight priority targets have been selected from the 23 lepidolite bearing LCT-type pegmatite targets identified within EPL
5439 and ML204 the previous quarter. Further portable XRF work is being undertaken across these targets to direct RC
drilling, which is planned for later this quarter.
Geochemical surveys are scheduled for the current quarter at the three kilometre long high priority gold target identified
in the previous period within EPL 5439. The eastern part of EPL 5439 where this target is located has geophysical and
geological similarities to known large-scale vein-hosted gold deposits in the Karibib region.
Mineral Resource Estimates
Historical mining of the Rubicon and Helikon pegmatites was largely for petalite, used in the ceramics industry. The
pegmatites are generally zoned with the petalite occurring adjacent to the central quartz core, and lepidolite-rich zones
commonly peripheral to these zones. As a consequence, much of the mined lepidolite and other lithium mica mineralisation
was discarded in surface stockpiles or reported as tailings from processing. Lepidico undertook a program of work during
the year to augment existing data on these surface stocks to enable the classification of the first Mineral Resources under
the JORC Code (2012).
51
2021 LEPIDICO ANNUAL REPORT 3 The information in this report that relates to the Helikon 1 and Rubicon Ore Reserve estimates is extracted from an ASX Announcement dated 28 May
2020 (“Definitive Feasibility Study Delivers Compelling Phase 1 Project Results”) and was completed in accordance with the guidelines of the JORC Code
(2012). The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market
announcement and that all material assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant market announcement
continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are
represented have not been materially modified from the original market announcement.
The information in this report that relates to the Rubicon and Helikon 1 Mineral Resource estimates is extracted from an ASX Announcement dated 30 January
2020 (“Updated Mineral Resource Estimates for Helikon 1 and Rubicon”) and was completed in accordance with the guidelines of the JORC Code (2012). The
Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and
that all material assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant market announcement continue to apply
and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are represented have not been
materially modified from the original market announcement.
The information in this report that relates to the Helikon 2 - Helikon 5 Mineral Resource estimates is extracted from an ASX Announcement dated 16 July 2019
(“Drilling Starts at the Karibib Lithium Project”) and was completed in accordance with the guidelines of the JORC Code (2012). The Company confirms
that it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material
assumptions and technical parameters underpinning the Mineral Resource estimates in the relevant market announcement continue to apply and have not
materially changed. The Company confirms that the form and context in which the Competent Person’s findings are represented have not been materially
modified from the original market announcement.
During the year the Company announced an increase in Resources at its 80% owned Karibib Project. The increased results
were from an initial Mineral Resource estimate (“MRE”) for the surface stockpiles from former operations at the Rubicon and
Figure 3. Karibib Project priority targets within ML 204 and EPL 5439. Drill ready LCT pegmatite targets (purple) and gold
targets for geochemical survey (yellow).
52
2021 LEPIDICO ANNUAL REPORT
Helikon pegmatites and a Resource update for the Rubicon tailings, as presented in Table 1. The Mineral Resource statements
were reported by Resource Evaluation Services in accordance with the requirements of the JORC Code (2012). These new
Mineral Resource estimates total 641,000 tonnes @ 0.81% Li2O (Table 1). Global Mineral Resources at Karibib now total 11.87
million tonnes grading 0.45% Li2O (Table 2).
Table 1. Summary of tailings and stockpile Resources at Karibib
Li2O %
Cs ppm
Rb %
0.42
0.28
Ta ppm
60
56
Li2O %
cut-off
0.00
0.00
Classification
Indicated
Inferred
538
411
535
0.23
125
0.00
Inferred
Resource
Rubicon tailings1
Tonnes
71 000
Rubicon stockpiles2
369 000
Rubicon historical
dumps2
Helikon stockpiles3
Total4
45 000
156,000
641 000
1 effective date 29 January 2021
2 effective date 10 March 2021
3 effective date 21 February 2021
4 apparent discrepancies due to rounding.
0.99
0.86
0.68
0.65
0.81
Mineral Resource Development
Further works are planned over the Rubicon and Helikon stockpiles to increase data density and confidence to a level
that would enable this material to be classified as Indicated Resources and thereby enable the estimation of Probable Ore
Reserves. This work will involve machine-aided sampling of pits and trenches, RC drilling of the finer-grained comminuted
dumps, additional bulk density determinations and XRD analyses of constituent mineralogy.
In addition, pods of high-grade lithium are observed in old mine workings at the Helikon 2, 3 and 4 pegmatites. These three
deposits represent excellent targets for further drilling to increase the resource inventory and to promote current Inferred
Mineral Resources into Measured and Indicated categories. These pegmatites are currently planned to be drilled in the
September 2021 quarter.
Table 2. Karibib Project Global Mineral Resources+
Deposit
Rubicon*
Helikon1*
Helikon2#
Helikon3#
Helikon4#
Helikon5#
Resource
Category
Measured
Indicated
Measured
Indicated
Inferred
Inferred
Inferred
Inferred
Inferred
Rubicon tailings
Indicated
Mt
1.56
5.72
0.64
0.94
0.17
0.216
0.295
1.510
0.179
0.07
Rubicon
stockpiles
Helikon
stockpiles
Global
Inferred
0.41
Inferred
0.16
Measured
Indicated
Inferred
Total
2.20
6.73
2.94
11.87
Li2O
%
0.53
0.36
0.65
0.50
0.70
0.56
0.48
0.38
0.31
0.99
0.84
0.65
0.57
0.39
0.50
0.45
K
%
Cut-off
% Li2O
Effective
Date
Rb
%
0.28
0.20
0.25
0.22
0.29
Cs
ppm
335
232
520
531
1100
Ta
ppm
47
37
61
74
150
2.24
2.11
1.90
1.81
2.18
0.42
538
60
0.23
0.27
0.21
535
389
277
125
51
42
2.14
0.15
0.15
0.15
0.15
0.15
0.20
0.20
0.20
0.20
0.00
28.01.2020
28.01.2020
28.01.2020
28.01.2020
28.01.2020
18.10.2018
18.10.2018
18.10.2018
18.10.2018
29.01.2021
0.00
10.03.2021
0.00
21.02.2021
21.02.2021
29.01.2021
10.03.2021
10.03.2021
53
Notes:
+Resources are inclusive of Ore Reserves
*ASX announcement dated 30 January 2020: Updated Mineral Resource Estimates for Helikon 1 and Rubicon
#ASX announcement dated 16 July 2019: Drilling starts at the Karibib Lithium Project
4 ASX Announcement, Karibib Mineral Resource expanded, 12 March 2021.
2021 LEPIDICO ANNUAL REPORT
CORPORATE
As at 30 June 2021, Lepidico had cash and cash equivalents of $14.7 million.
COVID-19
The health, safety and wellbeing of our people, staff and contractors, remains of paramount importance. The additional
precautions associated with the COVID-19 pandemic remained in place during the year, including suspension of all business
travel, along with working from home and adherence to local safety protocols in the jurisdictions in which we operate. All
staff in Canada and the UK are now fully immunised, which may allow limited business travel in 2022. There is only limited
availability of vaccines in Namibia, however, some staff have managed to get vaccinated, with Lepidico looking to assist
where possible.
The Company will continue to monitor the COVID-19 pandemic and adjust working protocols accordingly to ensure the
continued health and safety of our people and preserve the Company’s assets.
Entitlement Offer completed and significantly oversubscribed
On 15 June 2021 the Renounceable Entitlements Offer, previously announced on 20 May 2021 (the “Offer”), closed
significantly oversubscribed following strong support by the Company’s eligible directors, shareholders and new investors.
The Offer has raised $9.6 million (before costs) and the Company issued 741,125,690 new shares and 370,562,845 new
options on Monday 21 June 2021. The new options are listed under the ASX code LPDOD.
High demand, particularly from new institutional and professional investors resulted in subscriptions being substantially
scaled back, with the Company agreeing to place a further 223,076,924 fully paid ordinary shares at $0.013 with 111,538,462
attaching LPDOD options to raise an additional $2,900,000 (“Placement”). The Placement was made using the Company’s
existing capacity under Listing Rule 7.1.
Funds from the Placement funds are intended to be used to manufacture additional lithium hydroxide and other Phase 1
product samples for consumer qualification assessment and working capital following growing unsolicited interest in lithium
hydroxide supply for use in the rapidly developing electric vehicle supply chain in the United States and Europe.
Mahe Capital advised the Company and acted as Lead Manager and Underwriter.
Utilisation of Controlled Placement Agreement
In April 2021, Lepidico successfully raised A$2,925,000 (after costs) through the set-off of 134,000,000 collateral shares
(Set-off Shares) previously issued to Acuity Capital under the Controlled Placement Agreement (CPA) as announced on
23 December 2019. The Set-Off Shares reduces the total 230,000,000 collateral shares which Acuity Capital is otherwise
required to return to the Company upon termination of the CPA. These Set-Off Shares had a deemed price of $0.0218.
Project Finance
The Phase 1 Project will have operations across two jurisdictions: Namibia and Abu Dhabi; and potential offtake partners
across further jurisdictions resulting in various regulatory and fiscal regimes. The structure of the Phase 1 Project requires
separate legal entities to be established in each operating jurisdiction.
Lepidico Chemicals Namibia (Pty) Ltd (LCN), an 80% owned subsidiary, will operate the Karibib Project. A newly formed
Namibian subsidiary, Lepidico Infrastructure Namibia (Pty) Ltd (LIN), has been created following third-party interest in
direct investment in project infrastructure including the concentrator, which will be leased and operated by LCN. Lepidico
Chemical Manufacturing Ltd (LCM), a 100% owned Abu Dhabi subsidiary will develop and operate the Phase 1 Chemical
Plant. LCM will enter into a Concentrate Sales Agreement with LCN to acquire concentrate on commercial terms. LCM will
also enter into offtake/sales Agreements for the sale of lithium hydroxide and the various by-products.
The United States International Development Finance Corporation (DFC) completed a preliminary review of the project
proposal and application for financing for the lepidolite mining and processing project in Namibia and confirmed its interest
in pursuing further its analysis of this upstream part of the Project. Following receipt of an indicative, non-binding term
sheet from DFC to provide the required debt funding for the Karibib Project in Namibia, the Company entered into a formal
Mandate Agreement with DFC to undertake detailed due diligence on the Project, with a view to providing the necessary
debt financing for the Namibian portion. DFC has appointed BDA as the independent engineer to undertake detailed
technical due diligence.
54
2021 LEPIDICO ANNUAL REPORT
LOH-Max® acquisition
During the year, Lepidico Holdings Pty Ltd, a wholly-owned subsidiary of Lepidico Ltd, acquired all of the issued capital of
Bright Minz Pty Ltd (“Bright Minz”), a company controlled by director, Mr Gary Johnson. Bright Minz is the holder of the
LOH-Max® process technology which was developed for the production of high purity lithium hydroxide monohydrate from
a lithium sulphate intermediate.
In addition to the cash payment of $10,000 (as reimbursement to the shareholders of Bright Minz for establishment costs
incurred by them), a royalty deed was executed entitling the previous shareholders of Bright Minz to a trailing royalty in
relation to any third party LOH Max® licences entered into by the Lepidico Group after 1 January 2021.
The Lepidico Group retains the right to use LOH-Max® royalty free.
Strategic Collaboration with Cornish Lithium Ltd
On 4 December 2020, the Company entered into a strategic collaboration with Cornish Lithium Ltd (“CLL”), a UK registered
private company pioneering the development of lithium mica deposits within the large St Austell granite complex in
Cornwall, UK. The collaboration will focus on fast tracking the development of a new lithium chemical manufacturing centre
with industry leading environmental and social attributes, using Lepidico’s suite of eco-technologies and the geothermal
energy potential in the Cornwall region.
Lepidico granted CLL an exclusive technology licence covering approximately 93km² of the St Austell granite region. The
technologies include the proprietary L-Max®, LOH-Max® and caesium rubidium manufacturing processes, which provide
excellent environmental attributes versus conventional process technology. The technology suite allows lithium mica
minerals to be converted into a range of fine alkali metal chemicals including nominal battery grade lithium hydroxide,
without the requirement for energy intensive roasting and calcination, and without production of potentially problematic
sodium sulphate.
In recognition of the collaboration to pioneer Lepidico’s technologies on zinnwaldite and polylithionite mineralisations
several one-off special terms were included in the licence; including, up to a 15 year royalty holiday, a concessionary royalty
rate of 1.5% of gross revenue from all chemical conversion plant products and geographic exclusivity over the St Austell
granite. The consideration for the licence and technology data package was C$4 million.
In addition, Lepidico issued CLL 100 million options to acquire fully paid ordinary shares with a two year expiry and a strike
price of A$0.016, a 100% premium to Lepidico’s last closing price prior to execution of the transaction.
Convertible Note
On 7 December 2020, the Company repaid in full the C$5 million convertible note held by AIP Global Macro Fund L.P.
The repayment of the note was funded from proceeds received from the strategic collaboration and technology licence
agreement with CLL, and the Company’s 2020 R&D tax credit.
Patents & Trademarks
At 30 June 2021, the Company holds granted patents for its L-Max® technology in the United States, Europe, Japan and
Australia, along with an Innovation Patent in Australia. National and regional phase patent applications are well advanced in
the remaining other key jurisdictions and these processes are expected to continue during calendar year 2021. The Company
also has a US patent for its process technology for lithium recovery from phosphate minerals, which include amblygonite.
An international patent application is held for LOH-Max® under PCT/AU2020/050090 and the national and regional phase
of the patent application process is due to commence in the current quarter.
The national phase patent applications are progressing in relation to S-Max® under PCT/AU2019/050317 and PCT/
AU2019/050318 and for the production of caesium, rubidium and potassium brines and other formates under PCT/
AU2019/051024. The national and regional phase applications are expected to continue into 2022.
On 1 April 2021 a provisional patent application for the lithium carbonate recovery process was filed.
55
2021 LEPIDICO ANNUAL REPORT SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than as mentioned in the Review of Operations, no significant changes in the state of affairs of the Consolidated Entity
occurred during the financial year.
SUBSEQUENT EVENTS
Other than the matters discussed above there are no other matters or circumstances which have arisen since 30 June 2021
that have significantly affected or may significantly affect:
(a)
(b)
(c)
the Consolidated Entity’s operations in future years, or
the results of those operations in future financial years, or
the Consolidated Entity’s state of affairs in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS ON OPERATIONS
The Company plans to continue to implement its strategy to become a vertically integrated alkali metals chemical company
through the commercialisation of its proprietary technologies including L-Max®, S-Max® and LOH-Max® and the ongoing
growth, exploration and development of its portfolio of lithium interests.
The nature of the Company’s business remains speculative and the Board considers that comments on expected results or
success of this strategy are not considered appropriate or in the best interests of the Company.
INSURANCE AND INDEMNITY OF OFFICERS AND AUDITORS
During the year, the Company paid a premium in respect of a contract insuring the directors of the Company (named above)
and the Company Secretaries against liabilities incurred as such a director, secretary or executive officer to the extent
permitted by the Corporations Act 2001 (Cth). The contract of insurance prohibits disclosure of the nature of the liability
and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed
to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an
officer or auditor.
OPTIONS
At the date of this report, the Company has the following options on issue:
Number
9,450,000
65,000,000
945,000
274,698,811
190,764,921
3,921,982
73,000,000
100,000,000
5,967,000
482,101,307
67,500,000
18,090,000
1,291,439,021
Exercise Price
Grant
Expiry
$0.040
$0.026
$0.100
$0.020
$0.050
$0.100
$0.025
$0.016
$0.350
$0.026
$0.012
$0.020
11 July 2019
25 October 2021
23 November 2018
22 November 2021
11 July 2019
18 May 2020
5 June 2019
11 July 2019
31 March 2022
18 May 2022
5 June 2022
21 June 2022
21 November 2019
21 November 2022
8 December 2020
11 July 2019
18 June 2021
8 December 2022
26 February 2023
18 June 2023
19 November 2020
19 November 2023
11 July 2019
14 January 2024
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001(Cth) for the year
ended 30 June 2021 is included below in the Directors’ Report.
The Auditor did not provide any non-audit services for the year ended 30 June 2021 (2020: $Nil)
56
2021 LEPIDICO ANNUAL REPORT
REMUNERATION REPORT (AUDITED)
This remuneration report is set out under the following main headings:
A. Principles used to determine the nature and amount of remuneration
B. Details of remuneration
C.
D.
Service Agreements
Share Based Compensation
This remuneration report outlines the Director and Executive remuneration arrangements for the Company and Group in
accordance with the requirements of the Corporations Act 2001 (Cth) and its Regulations. For this report, key management
personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and
controlling the major activities of the Company and Group, directly or indirectly, including any director (whether executive or
otherwise) of the Parent Company, and includes the highest paid executives of the Company and Group.
The information provided in this remuneration report has been audited as required by section 308(3c) of the Corporations
Act 2001.
A.
Principles Used To Determine The Nature And Amount Of Remuneration
The Company’s remuneration policy is designed to align director and executive objectives with shareholder and business
objectives by providing a fixed remuneration component and offering incentives based on the Group’s financial results. A
Remuneration Committee has been established which makes recommendations to the Board which aims to attract and
retain appropriate executives and directors to run and manage the Group, as well as create goal congruence between
directors, executives and shareholders.
The Remuneration Committee considers remuneration of Directors and the Executive and makes recommendations to the
Board. Remuneration is considered annually or otherwise as required.
The nature and amount of remuneration for an executive and non-executive director depends on the nature of the role and
market rates for the position, which are determined with the assistance of external advisors (where necessary), surveys and
reports, taking into account the experience and qualifications of each individual. The Board ensures that the remuneration
paid to KMP is competitive and reasonable.
During the financial year, the Remuneration Committee reviewed the elements of KMP remuneration for the year
commencing 1 July 2021 including comparative information relating to the KMP remuneration for the Company’s peers and
provided recommendations to the Board. The recommendations from the Remuneration Committee were approved by the
Board.
The following were KMP of the Group during the financial year and unless otherwise indicated were KMP for the entire
financial year:
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
Non-executive Chair
Non-executive Director
Non-executive Director
Executive Director
Mr Joe Walsh
Executives
Ms Shontel Norgate
Mr Tom Dukovcic
Mr Peter Walker
Mr Alex Neuling 1
Managing Director
Chief Financial Officer and Joint Company Secretary
General Manager - Geology
General Manager – Projects
Joint Company Secretary
1 Mr Neuling provides services as a the Joint Company Secretary through a services agreement with Erasmus Consulting (Erasmus).
In accordance with best practice corporate governance, the structure of non-executive director and executive remuneration
is separate and distinct.
57
2021 LEPIDICO ANNUAL REPORT
Non-Executive Director Remuneration
Fees and payments to the Non-Executive Directors reflect the demands made, and the responsibilities placed on the
Non-Executive Directors. The maximum annual aggregate directors’ fee pool limit is $600,000 and was approved by
shareholders at the annual general meeting on 22 November 2018.
The Company’s policy is to remunerate Non-Executive Directors at market rates (for comparable companies) and reflect the
demands made and the responsibilities placed on the Non-Executive Directors.
Non-Executive Director fees approved by the Board from 1 December 2018 are:
Base fees (annual) Non-Executive Chair
Other Non-Executive Directors
Chair of Audit & Governance /Nomination & Remuneration Committee
87,600
54,750
10,000
Member of Audit & Governance /Nomination & Remuneration Committee
10,000
On formation of the Diversity Committee it was resolved by the Committee members that the Committee would forgo any
Fees and the decision would be reviewed once a final investment decision was reached by the Board.
Effective from 1 April 2020 the Board approved the deferment of payment of Directors Fees until austerity measures were
lifted and the convertible note was repaid. Directors Fees were re-instated and fees outstanding were repaid in January
2021.
Fees for Non-Executive Directors are not linked to the performance of the Company however, to align Directors’ interests
with shareholders’ interests are encouraged to hold equity securities in the Company. Non-executive Directors are also
entitled to participate in the Company long term incentive plan (refer Long Term Incentives (LTIs) below).
In addition to Directors’ fees, Non-Executive Directors are entitled to additional remuneration as compensation for additional
specialised services performed at the request of the Board and reimbursed for reasonable expenses incurred by directors on
Company business. Non-Executive Directors’ fees and payments are reviewed annually by the Board.
Retirement benefits
No retirement benefits or allowances are paid or payable to Non-Executive Directors of the Company other than
superannuation benefits.
Other benefits
No motor vehicle, health insurance or other similar allowances are made available to Non-Executive Directors.
Executive Director and Executive Remuneration
The objective of the Company’s remuneration framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The remuneration framework aligns executive reward with the achievement of strategic
and operational objectives and the creation of wealth for shareholders. The Board ensures that the executive reward
framework satisfies the following key criteria in line with appropriate governance practices:
link rewards with the strategic goals and performance of the Company;
• attract, retain, motivate and reward executives;
• reward executives for Company and individual performance against pre-determined targets/benchmarks;
•
• provide competitive remuneration arrangements by market standards (for comparable companies);
• align executive interests with those of the Company’s shareholders; and
• comply with applicable legal requirements and appropriate standards of governance.
The Company has structured an executive remuneration framework that is market competitive and complementary to the
reward strategy of the organisation. Executive remuneration packages may comprise a mix of the following:
Fixed remuneration
Fixed remuneration comprises base salary and employer superannuation contributions. Salaries are reviewed on an annual
basis to ensure competitive remuneration is paid to executives with reference to their role, responsibility, experience and
performance. Salaries are reviewed on an annual basis. There are no guaranteed base pay increases included in any
executive contracts.
Effective from 1 April 2020 the senior Executives agreed to a 20% payment deferral of Fixed remuneration until austerity
measures were lifted and the convertible note was repaid. Executive remuneration was re-instated in full and outstanding
remuneration was repaid in January 2021.
58
2021 LEPIDICO ANNUAL REPORT
Short-term incentives (STIs)
STIs comprise cash bonuses. The STIs are structured to provide remuneration for the achievement of individual and
Company performance targets linked to the Company’s strategic objectives across four areas of focus: Development,
Exploration, Financing/Shareholder Value and Governance. At the beginning of each year, performance targets are set by
the Board. Where possible, the performance targets are specific and measurable. At the end of each year the Company’s
performance against the KPIs are assessed by the CEO and presented to the N&R Committee and approved by the Board.
STIs may be adjusted up or down in line with under or over achievement relative to target performance levels at the
discretion of the Remuneration Committee.
During the year the Company achieved the key milestones relating to the development of the integrated Phase 1 Project
with ESIAs and permits and approvals in place for both the Karibib Project in Namiba and the Phase 1 chemical plant in
Abu Dhabi. The Company furthered discussions with potential offtakers for all of its high value products and key supply
contracts were well advanced. Lepidico entered into a strategic collaboration with Cornish Lithium Ltd including a Licence
Agreement for its L-Max® and LOH-Max® technologies representing the Company’s first operating revenue. The Company
ensured the health and safety of its employees, particularly during the COVID-19 pandemic and successfully raised $12.5
million in an Entitlement Offer to enable the Company to fund its development and growth opportunities.
For the year ended 30 June 2021, STIs of $322,920.82 (including superannuation) were payable to KMP of the Company or
Group (2020: $Nil)
Long term incentives (LTIs)
LTIs comprise options granted at the recommendation of the Remuneration Committee in order to align the objective of
Directors and Executives with shareholders and the Company (refer section D for further information). The issue of options
to Directors (Non-Executive and Executive) requires shareholder approval.
The grant of share options has not been directly linked to previously determined performance milestones or hurdles as
the current pre-development stage of the Group’s activities makes it difficult to determine effective and appropriate key
performance indicators and milestones.
Persons granted options are not permitted to enter into transactions (whether through the use of derivatives or otherwise)
that limit his or her exposure to the economic risk in relation to the securities.
Consequences of Performance on Shareholder Wealth
Executive remuneration is aimed at aligning the strategic and business objectives with the creation of shareholder wealth.
The table below shows measures of the Group’s financial performance over the last 5 years as required by the Corporations
Act 2001. However, given the pre-development stage of the business these are not necessarily consistent with the measures
used in determining the variable amounts of remuneration to be awarded to KMP. Consequently, there may not be a direct
correlation between the statutory key performance measures and the variable remuneration awarded.
2017
$
2018
$
2019
$
2020
$
Net Profit/(Loss)
(5,357,243)
(7,219,713)
(5,105,014)
(10,118,237)
EPS
Share price at 30 June
(0.003)
0.013
(0.003)
0.037
(0.002)
0.026
(0.002)
0.007
2021
$
$282,556
0.00006
0.01
59
2021 LEPIDICO ANNUAL REPORT
B.
Details Of Remuneration
Amounts of remuneration
Details of the remuneration paid or payable to the directors and Key Management Personnel of the Group are set out in the
following tables. Cash Salary and Fees for KMP in 2020 included deferred remuneration which was paid during the financial
year ended 30 June 2021.
Cash
Salary and
Fees (Paid)
Cash
Salary
and Fees
(Deferred)
Deferred
Cash
Salary
and Fees
(Paid)
$
$
$
Other
(STI)
$
Non-Executive Directors
Short-term Benefits
Post-employment benefits
Total
Share-
based
payments
Equity
Options
Vested
Retirement
Benefits
(Paid)
Retirement
Benefits
(Paid)
Deferred
Retirement
Benefits
(Deferred)
$
$
$
$
$
Mr Gary Johnson
Mr Mark Rodda
Mr Brian Talbot 1
Ms Cynthia Thomas
Executive Directors
Mr Joe Walsh 2
Executives
Mr Tom Dukovcic
Ms Shontel Norgate 3
Mr Peter Walker 4
Mr Alex Neuling 5
Total Directors’ and
KMP remuneration
2021
100,000
-
25,000
2020
2021
2020
2021
2020
2021
2020
75,000
25,000
-
80,000
-
20,000
60,000
20,000
-
37,500
87,600
-
-
-
-
-
-
21,900
65,700
21,900
-
-
-
-
-
-
-
-
-
2021
376,496
-
18,825 145,639
2020
380,500
20,026
-
-
2021
2020
2021
2020
2021
2020
2021
2020
208,478
-
9,406
48,410
178,721
9,406
-
-
263,547
-
13,177
63,755
266,351
14,018
-
-
248,587
-
17,750
59,718
316,982
18,414
37,026
39,150
-
-
-
-
-
-
-
-
-
2021
1,401,734
126,058 317,522
36,905
9,500
7,125
7,600
5,700
-
3,562
-
-
-
-
19,805
16,979
-
-
-
-
-
-
-
2,375
37,500
174,375
2,375
-
52,500
162,000
-
1,900
37,500
147,000
1,900
-
-
-
-
-
-
-
894
-
-
-
-
-
-
-
-
-
-
-
-
-
-
52,500
140,100
-
-
52,500
93,562
37,500
147,000
52,500
140,100
75,000
615,960
105,000
505,526
894
50,000
336,993
-
-
-
-
-
-
-
70,000
276,000
50,000
390,479
70,000
350,369
50,000
376,055
-
-
28,000
335,396
37,026
67,150
5,169
337,500
2,224,888
2020
1,419,904
128,764
-
-
33,366
5,169
-
483,000 2,070,203
1 Mr Talbot resigned as Non-Executive Director on 9 April 2020
2 Mr Walsh is remunerated in Canadian dollars and his total salary paid was C$378,525, including C$18,025 paid as deferred remuneration (2020: C$342,475 with
C$18,025 deferred). The Company uses the average annual rate to translate remuneration into the reporting currency and has been translated at the rate of
C$1.00 for every A$1.044372 (2020: C$1.00 for every A$1.111031).
3 Ms Norgate is remunerated in Canadian dollars and her total salary paid was C$264,968, including C$12,617 paid as deferred remuneration (2020: C$239,732
with C$12,617 deferred). The Company uses the average annual rate to translate remuneration into the reporting currency and has been translated at the rate
of C$1.00 for every A$1.044372 (2020: C$1.00 for every A$1.111031).
3 Mr Walker is remunerated in Great British pounds and his total salary paid was GBP£147,700, including GBP£9,800 paid as deferred remuneration (2020:
GBP£168,700 with GBP£9,800 deferred). The Company uses the average annual rate to translate remuneration into the reporting currency and has been
translated at the rate of GBP£1.00 for every A$1.80266 (2020: GBP£1.00 for every A$1.878967)
5 Mr Neuling provides services as the Joint Company Secretary through a services agreement with Erasmus Consulting Pty Ltd (Erasmus). During the year
Erasmus was paid or is payable fees of $37,026 (2020: $39,150) for the provision of company secretarial services to the Group.
Loans to Key Management Personnel
There were no loans made to Directors or other KMP of the Group (or their personally related entities) during the current
financial period.
60
2021 LEPIDICO ANNUAL REPORT Other Transactions with Key Management Personnel
Payments to director-related entities 1
2021
$
2020
$
114,271
1,229,403
1 Payments were made to Strategic Metallurgy Pty Ltd, a company of which Mr Gary Johnson is a director and beneficial shareholder. The payments were for
development of L-Max® technology on an arm’s length basis. As at 30 June 2021 invoices totalling $Nil (2020: $2,860) were payable.
C.
Service Agreements
The remuneration and other terms of agreement for the Company’s Managing Director and other KMP are formalised in
employment contracts, as set out below.
Mr Joe Walsh, Managing Director (MD) has an employment agreement with the Group. The agreement specifies duties and
obligations to be fulfilled as MD and provides for an annual review of base remuneration taking into account performance. Mr
Walsh’s remuneration includes a salary of C$360,500 per annum. Effective 1 April 2020, Mr Walsh deferred payment of 20% of
his base salary until austerity measures were lifted and the convertible note was repaid. Remuneration was re-instated in full and
outstanding remuneration was repaid in January 2021. Mr Walsh did not receive an increase to base salary during the reporting
period; however an increase in base salary to C$375,000 was awarded effective from 1 July 2021. A monetary bonus of C$135,548
has been awarded for the financial year ended 30 June 2021 (2020: C$Nil).
Termination of the employment agreement requires 6 months written notice. Upon termination, the MD is entitled to receive from
the Group all payments owed to him under the employment agreement up to and including the date of termination and any
payments due to him pursuant to any relevant legislation by way of accrued annual leave and long service leave. If the Company
terminates the agreement for any reason other than for cause the MD will receive 1 month’s salary at the time of termination for
every year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months under certain
prescribed events).
Mr Tom Dukovcic, GM - Geology (GMG) has an employment agreement with the Group. The agreement specifies duties and
obligations to be fulfilled as GMG and provides for an annual review of base remuneration taking into account performance.
Mr Dukovcic’s remuneration includes a salary of $206,000 per annum inclusive of superannuation. Effective 1 April 2020, Mr
Dukovcic deferred payment of 20% of his base salary until austerity measures were lifted and the convertible note was repaid.
Remuneration was re-instated in full and outstanding remuneration was repaid in January 2021. Mr Dukovcic did not receive an
increase to base salary during the reporting period; however an increase in base salary to $240,000 inclusive of superannuation,
was awarded effective from 1 July 2021. A monetary bonus of $48,410.00 (inclusive of superannuation) has been awarded for the
financial year ended 30 June 2021 (2020: $Nil).
Termination of the employment agreement requires 6 months written notice. Upon termination, the GMG is entitled to receive
from the Company all payments owed to him under the employment agreement up to and including the date of termination
and any payments due to him pursuant to any relevant legislation by way of accrued annual leave and long service leave. If the
Company terminates the agreement for any reason other than for cause the GMG will receive 1 month’s salary at the time of
termination for every year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months
under certain prescribed events).
Ms Shontel Norgate, Chief Financial Officer (CFO) has an employment agreement with the Group. The agreement specifies duties
and obligations to be fulfilled as CFO and provides for an annual review of base remuneration taking into account performance.
Ms Norgate’s remuneration includes a salary of C$252,500 per annum. Effective 1 April 2020, Ms Norgate deferred payment of
20% of her base salary until austerity measures were lifted and the convertible note was repaid. Remuneration was re-instated in
full and outstanding remuneration was repaid in January 2021. Ms Norgate did not receive an increase to base salary during the
reporting period; however an increase in base salary to C$295,000 was awarded effective from 1 July 2021. A monetary bonus of
C$59,338 has been awarded for the financial year ended 30 June 2021 (2020: C$Nil).
Termination of the employment agreement requires 3 months written notice. Upon termination, the CFO is entitled to receive from
the Company all payments owed to her under the employment agreement up to and including the date of termination and any
payments due to her pursuant to any relevant legislation by way of accrued annual leave and long service leave. If the Company
terminates the agreement for any reason other than for cause the CFO will receive 1 month’s salary at the time of termination for
every year of employment with the Company to a maximum of 6 months’ payment (extendable up to 12 months under certain
prescribed events).
Mr Peter Walker, General Manager – Project Development (GMP) has an employment agreement with the Group. The agreement
specifies duties and obligations to be fulfilled as GMP and provides for an annual review of base remuneration taking into
account performance. Mr Walker is employed on a casual basis based on the number of days worked and earned a salary of
GBP137,900 for the financial year (2020: GBP178,500). Effective 1 April 2020, Mr Walker deferred payment of 20% of his base rate
until austerity measures were lifted and the convertible note was repaid. Remuneration was re-instated in full and outstanding
remuneration was repaid in January 2021. Mr Walker did not receive an increase to base rate during the reporting period; however
an increase in his base rate to GBP860 per day was awarded effective from 1 July 2021. A monetary bonus of GBP32,407 has
been awarded for the financial year ended 30 June 2021 (2020: C$Nil).
Termination of the employment agreement requires 1 months written notice. Upon termination, the GMP is entitled to receive from
the Company all payments owed to him under the employment agreement up to and including the date of termination.
61
2021 LEPIDICO ANNUAL REPORT D.
Share Based Compensation
Share Holdings
The number of shares and options over ordinary shares in the Group held during the financial year by each director of Lepidico
Ltd and other KMP of the Group, including their personally related parties, are set out below:
Balance at start
of year
Purchased
Exercised
Options
Sold
Other Net
Change
Balance at
end of year
2021
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
Executive Directors
Mr Joe Walsh
Key Management
Mr Tom Dukovcic
Ms Shontel Norgate
Mr Peter Walker
Mr Alex Neuling
367,762,575
-
-
2,855,910
-
-
31,220,000
1,888,572
6,602,958
5,564,022
-
3,553,946
-
-
-
344,549
Total
414,703,501
5,089,031
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
370,618,485
-
-
33,108,572
6,602,958
5,564,022
-
3,898,495
419,792,532
Option Holdings
2021
Non-Executive Directors
Mr Gary Johnson
Mr Mark Rodda
Ms Cynthia Thomas
Executive Directors
Mr Joe Walsh
Key Management
Mr Tom Dukovcic2
Ms Shontel Norgate
Mr Peter Walker
Mr Alex Neuling
Balance at
start of year
Granted during
the year as
remuneration
Purchased
during year
Exercised/
Expired during
year
Balance at
end of year
* Vested and
exercisable at
end of year
31,352,379
22,500,000
15,000,000
7,500,000
7,500,000
7.500.000
1,427,955
-
-
(11,847,146)
(7,500,000)
-
28,433,188
22,500,000
22,500,000
28,433,188
22,500,000
22,500,000
45,735,000
15,000,000
944,286
(15,250,000)
46,429,286
46,429,286
30,488,840
30,278,202
-
4,000,000
10,000,000
10,000,000
10,000,000
-
-
-
-
171,757
(10,205,556)
(10,000,000)
-
-
30,283,284
30,278,202
10,000,000
4,171,757
30,283,284
30,278,202
10,000,000
4,171,757
Total
179,354,421
67,500,000
2,543,998
(54,802,702)
194,595,717
194,575,717
Details of the share options granted during the year as remuneration are disclosed in Note 18(d) as approved by shareholders at the
Company’s Annual General Meeting in November 2020.
This report is made in accordance with a resolution of the directors made pursuant to section 298(2) of the Corporations Act 2001.
Joe Walsh
Managing Director
Dated this 24th day of September 2021
62
2021 LEPIDICO ANNUAL REPORT AUDITORS INDEPENDENCE DECLARATION UNDER SECTION
307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS
OF LEPIDICO LIMITED
I declare that to the best of my knowledge and belief, for the year ended 30 June 2021 there has been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
Neil Pace
Partner
MOORE AUSTRALIA AUDIT (WA)
Chartered Accountants
Signed at Perth this 24th day of September 2021.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
63
2021 LEPIDICO ANNUAL REPORT CONSOLIDATED STATEMENT OF PROFIT AND LOSS
AND OTHER COMPREHENSIVE INCOME
as at 30 June 2021
Continuing Operations
Other income
Business development expenses
Administrative expenses
Employment benefits
Depreciation
Share based payments
Accretion expense
Impairment of property, plant and equipment
Exploration and evaluation expenditure expensed
Realised foreign exchange gain/(loss)
Loss before income tax
Note
4
5
2021
$
2020
$
4,137,670
63,558
(376,399)
(432,830)
(1,318,832)
(2,821,926)
(1,639,182)
(1,655,873)
(278,862)
(337,500)
(306,111)
(511,000)
(434,122)
(901,639)
-
(2,026,267)
(408)
(2,229,049)
(63,248)
6,697
(310,883)
(10,814,440)
Income tax benefit/(expense)
6
593,439
696,203
Profit/(Loss) from continuing operations after tax
282,556
(10,118,237)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
473,181
301,570
Total comprehensive loss for the year
755,737
(9,816,667)
Comprehensive profit/(loss) for the year attributable to:
Owners of the parent
Non-controlling interest
904,916
(9,373,811)
(149,179)
(442,856)
755,737
(9,816,667)
Loss per share for the year attributable to the members of Lepidico Ltd
Basic and diluted profit/(loss) per share
8
0.00006
(0.002)
The accompanying notes form part of these financial statements.
64
2021 LEPIDICO ANNUAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2021
Note
2021
$
2020
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Exploration and evaluation expenditure
Intangible asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Short-term provisions
Liability component of convertible note
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Deferred Revenue
Deferred Tax Liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Equity component of convertible note
Accumulated losses
Equity attributable to owners of the Parent
Non-controlling interests
TOTAL SHAREHOLDERS EQUITY
The accompanying notes form part of these financial statements.
9
10
10
11
12
13
14
15
16
17
6
18
19
14,738,020
243,786
4,792,713
1,766,863
14,981,806
6,559,576
71,489
1,669,081
72,829
1,903,630
43,986,682
42,725,634
24,631,056
23,870,434
70,358,308
68,572,527
85,340,114
75,132,103
967,684
140,105
-
564,671
107,652
5,215,104
1,107,789
5,887,427
6,071,577
3,211,069
6,629,144
3,426,317
9,282,646
10,055,461
10,390,435
15,942,888
74,949,679
59,189,215
94,656,278
80,081,594
6,610,944
990,000
5,707,720
990,000
(33,943,508)
(34,375,243)
68,313,714
6,635,965
52,404,071
6,785,144
74,949,679
59,189,215
65
2021 LEPIDICO ANNUAL REPORT
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66
2021 LEPIDICO ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOW
For the Year ended 30 June 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from technology licence holder
Receipts from government assistance programs
Payments to suppliers and employees
Interest received
Note
2021
$
2020
$
4,084,027
-
53,421
46,964
(3,101,056)
(4,740,040)
222
16,594
Net cash provided by/(used in) operating activities
23
1,036,610
(4,676,482)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation activities
Payments for research and development activities
Proceeds from research and development tax credit
Payments for property, plant and equipment
Payments for acquisition of Bright Minz Pty Ltd
Cash acquired on acquisition of Desert Lion Energy Inc
Acquisition costs of Desert Lion Energy Inc
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
Proceeds from exercise of options
Repayment of convertible note
Net cash provided by financing activities
Net increase/(decrease) in cash held
Cash at beginning of financial year
Effect of foreign exchange rate changes
(998,874)
(4,923,732)
(692,844)
(2,351,349)
1,243,863
1,010,808
(92,283)
(10,000)
-
-
(2,589)
-
416,113
(1,185,134)
(550,138)
(7,035,883)
14,595,619
3,447,716
111,394
75,000
(5,176,401)
-
9,530,612
3,522,716
10,017,084
(8,189,649)
4,792,713
13,660,308
(71,777)
(677,946)
Cash at end of financial year
9
14,738,020
4,792,713
67
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting
Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001.
The financial report covers Lepidico Ltd and its controlled entities (the Group or Consolidated Entity or Economic Entity).
Lepidico Ltd is a listed public company, incorporated and domiciled in Australia. The financial report of the Group complies
with all Australian equivalents to International Financial Reporting Standards (AIFRS) in their entirety.
The following is a summary of the material accounting policies adopted by the Consolidated Entity in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the revaluation
of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has
been applied.
The financial statements were authorised for issue on 24th September 2021 by the Directors of the Company. The
Directors have the power to amend and re-issue the financial report. The Group is a for-profit entity for financial reporting
purposes under Australian Accounting Standards.
Accounting Policies
(a)
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of
business. The ability of the Group to continue as a going concern is dependent on the Company being able to
continue to raise additional funds as required to meet ongoing exploration and development programs and working
capital.
For the year ended 30 June 2021, the Group incurred a net profit after tax of $282,556 and a net cash inflow from
operations of $1,036,610. As at 30 June 2021, the Company had net current assets of $13,874,017.
The financial report has been prepared on a going concern basis which the Directors consider to be appropriate as
they believe that the Group will be able to raise additional capital as required based on the successful outcome of
previous Entitlement Offers including the most recent Entitlement Offer, where the Company raised $12.5 million
(before costs) during the ongoing COVID-19 pandemic. There remains ongoing interest in the Company and the
long term outlook for the lithium industry remains robust.
While the Company has been successful in securing financing in the past, there can be no assurance that it will be
able to do so in the future. The Company’s opinion concerning its ability to secure future financing options is based
on currently available information. To the extent that this information proves to be inaccurate, or the COVID-19
pandemic continues for a prolonged period of time and/or impacts capital markets further the future availability of
financing may be adversely affected.
68
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(b)
Principles of Consolidation
The consolidated financial statements incorporate all the assets, liabilities and results of the parent (Lepidico Ltd) and
all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent controls. The parent controls
an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability
to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 2.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date
that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between group
entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments
made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the non-
controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-controlling
interests are attributed their share of profit or loss and each component of other comprehensive income. Non-
controlling interests are shown separately within the equity section of the statement of financial position and statement
of comprehensive income.
(c)
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving
entities or businesses under common control. The business combination will be accounted for from the date that
control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent
liabilities) assumed is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a
contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent
consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any
change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss when incurred.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
(d)
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the
sum of:
i)
ii)
iii)
the consideration transferred;
any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair
value of any previously held equity interest shall form the cost of the investment in the separate financial statements.
Fair value re-measurements in any pre-existing equity holdings are recognised in profit or loss in the period in
which they arise. Where changes in the value of such equity holdings had previously been recognised in other
comprehensive income, such amounts are recycled to profit or loss. The amount of goodwill recognised on
acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted
in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-controlling
interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest's proportionate
share of the subsidiary's identifiable net assets (proportionate interest method).
In such circumstances, the Group determines which method to adopt for each acquisition and this is stated in the
respective notes to these financial statements disclosing the business combination. Under the full goodwill method,
the fair value of the non-controlling interests is determined using valuation techniques which make the maximum use
of market information where available. Under this method, goodwill attributable to the non-controlling interests is
recognised in the consolidated financial statements.
Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is
included in investments in associates. Goodwill is tested for impairment annually and is allocated to the Group's cash-
generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored
being not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of. Changes in the ownership interests in a subsidiary that do not
result in a loss of control are accounted for as equity transactions and do not affect the carrying amounts of goodwill.
69
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(e)
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or
disallowed items. It is calculated using tax rates that have been enacted or are substantively enacted by the balance
sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination,
where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the statement of comprehensive income except where it relates to
items that may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that
no adverse change will occur in income taxation legislation and the anticipation that the Consolidated Entity will
derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
(f)
Property, Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash
flows which will be received from the assets’ employment and subsequent disposal. The expected net cash flows
have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Entity includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the group and the cost of the
item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive
income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a straight-line
basis over their useful lives to the Consolidated Entity commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the
estimated useful lives of the improvements.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or
losses are included in the statement of comprehensive income. When re-valued assets are sold, amounts included in
the revaluation reserve relating to that asset are transferred to retained earnings.
70
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(g)
Exploration and Development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area
of interest. These costs are only carried forward to the extent that they are expected to be recouped through
the successful development of the area or where activities in the area have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of
the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Costs of site restoration are provided over the life of the facility from when exploration commences and are included
in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and
building structures, waste removal, and rehabilitation of the site in accordance with clauses of the mining permits.
Such costs have been determined using estimates of future costs, current legal requirements and technology on an
undiscounted basis.
Any changes in the estimates for the costs of site restoration are accounted on a prospective basis. In determining
the costs of site restoration, there is uncertainty regarding the nature and extent of the restoration due to
community expectations and future legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(h)
Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an
orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the
measurement date.
To the extent possible, market information is extracted from either the principal market for the asset or liability
(i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a
market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market
that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after
taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial
instrument, by reference to observable market information where such instruments are held as assets. Where
this information is not available, other valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
71
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(i)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions to the instrument. For financial assets, this is the date that the Group commits itself to either the purchase
or sale of the asset (ie trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs, except
where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed
to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In
other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as specified in AASB 15.63.
Classification and subsequent measurement
Financial liabilities
Financial instruments are subsequently measured at:
• amortised cost; or
• fair value through profit or loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
• a contingent consideration of an acquirer in a business combination to which AASB 3: Business
Combinations applies;
• held for trading; or
• initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest expense in profit or loss over the relevant period. The effective interest rate is the internal rate of return of
the financial asset or liability. That is, it is the rate that exactly discounts the estimated future cash flows through the
expected life of the instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
• it is incurred for the purpose of repurchasing or repaying in the near term;
• part of a portfolio where there is an actual pattern of short-term profit taking; or
• a derivative financial instrument (except for a derivative that is in a financial guarantee contract or a derivative
that is in a effective hedging relationships).
Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not
part of a designated hedging relationship are recognised in profit or loss.
The change in fair value of the financial liability attributable to changes in the issuer's credit risk is taken to other
comprehensive income and are not subsequently reclassified to profit or loss. Instead, they are transferred
to retained earnings upon derecognition of the financial liability. If taking the change in credit risk in other
comprehensive income enlarges or creates an accounting mismatch, then these gains or losses should be taken to
profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
• amortised cost;
• fair value through other comprehensive income; or
• fair value through profit or loss.
Measurement is on the basis of two primary criteria:
• the contractual cash flow characteristics of the financial asset; and
• the business model for managing the financial assets.
72
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
A financial asset that meets the following conditions is subsequently measured at amortised cost:
• the financial asset is managed solely to collect contractual cash flows; and
• the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other
comprehensive income:
• the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and
interest on the principal amount outstanding on specified dates; and
• the business model for managing the financial assets comprises both contractual cash flows collection and the
selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value
through other comprehensive income are subsequently measured at fair value through profit or loss.
The Group initially designates a financial instrument as measured at fair value through profit or loss if:
• it eliminates or significantly reduces a measurement or recognition inconsistency (often referred to as
“accounting mismatch”) that would otherwise arise from measuring assets or liabilities or recognising the gains
and losses on them on different bases;
• it is in accordance with the documented risk management or investment strategy, and information about the
groupings was documented appropriately, so that the performance of the financial liability that was part of a
group of financial liabilities or financial assets can be managed and evaluated consistently on a fair value basis;
and
• it is a hybrid contract that contains an embedded derivative that significantly modifies the cash flows otherwise
required by the contract.
The initial designation of the financial instruments to measure at fair value through profit or loss is a one-time option
on initial classification and is irrevocable until the financial asset is derecognised.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent consideration
recognised by an acquirer in a business combination to which AASB 3:Business Combinations applies, the Group
made an irrevocable election to measure any subsequent changes in fair value of the equity instruments in other
comprehensive income, while the dividend revenue received on underlying equity instruments investment will still
be recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in
accordance with the Group's accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the
statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (ie when the obligation in the contract is discharged, cancelled
or expires). An exchange of an existing financial liability for a new one with substantially modified terms, or a
substantial modification to the terms of a financial liability is treated as an extinguishment of the existing liability
and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is
transferred in such a way that all the risks and rewards of ownership are substantially transferred.
73
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
All of the following criteria need to be satisfied for derecognition of financial asset:
• the right to receive cash flows from the asset has expired or been transferred;
• all risk and rewards of ownership of the asset have been substantially transferred; and
• the Group no longer controls the asset (ie the Group has no practical ability to make a unilateral decision to sell
the asset to a third party).
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.
On derecognition of a debt instrument classified as at fair value through other comprehensive income, the
cumulative gain or loss previously accumulated in the investment revaluation reserve is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to be classified under fair value through other
comprehensive income, the cumulative gain or loss previously accumulated in the investment revaluation reserve is
not reclassified to profit or loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses on:
• financial assets that are measured at amortised cost or fair value through other comprehensive income;
• lease receivables;
• contract assets (eg amounts due from customers under construction contracts);
• loan commitments that are not measured at fair value through profit or loss; and
• financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
• financial assets measured at fair value through profit or loss; or
• equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial
instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows
expected to be received, all discounted at the original effective interest rate of the financial instrument.
The Group uses the general approach to impairment, as applicable under AASB 9: Financial Instruments.
Under the general approach, at each reporting period, the Group assesses whether the financial instruments are
credit-impaired, and if:
• the credit risk of the financial instrument has increased significantly since initial recognition, the Group measures
the loss allowance of the financial instruments at an amount equal to the lifetime expected credit losses; or
• there is no significant increase in credit risk since initial recognition, the Group measures the loss allowance for
that financial instrument at an amount equal to 12-month expected credit losses.
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in
the statement of profit or loss and other comprehensive income.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that asset.
Assets measured at fair value through other comprehensive income are recognised at fair value, with changes in fair
value recognised in other comprehensive income. Amounts in relation to change in credit risk are transferred from
other comprehensive income to profit or loss at every reporting period.
For financial assets that are unrecognised (eg loan commitments yet to be drawn, financial guarantees), a provision
for loss allowance is created in the statement of financial position to recognise the loss allowance.
74
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(j)
(k)
(l)
(m)
(n)
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to
the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the
consolidated statement of comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives. Where it is not
possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the group’s entities is measured using the currency of the primary economic
environment in which that Entity operates. The consolidated financial statements are presented in Australian dollars
which is the Parent Entity’s functional and presentation currency.
Transaction and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of
comprehensive income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in the
statement of comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group’s
presentation currency are translated as follows:
(i)
(ii)
(iii)
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained profits are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group’s foreign
currency translation reserve in the statement of financial position. These differences are recognised in the statement
of comprehensive income in the period in which the operation is disposed.
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees
to balance date. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later
than one year have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities on the statement of financial position.
75
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(o)
Revenue
Revenue from the sale of goods is recognised upon delivery of goods to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from
associates are accounted for in accordance with the equity method of accounting.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing
and financing activities, which are disclosed as operating cash flows.
Critical Accounting Estimates and Judgements
The Directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events and
are based on current trends and economic data, obtained both externally and within the group.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
Key Sources of Estimation Uncertainty
The following key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year:
(i) Recoverability of Exploration and Evaluation Expenditure
The recoverability of the exploration and evaluation expenditure recognised as a non-current asset is
dependent upon the successful development, or alternatively sale, of the respective tenements which comprise
the assets.
(ii) Recoverability of Intangible Asset (Development Expenditure)
The recoverability of capitalised development expenditure recognised as a non-current asset is dependent
upon the successful development, or alternatively sale, of the respective intellectual property which comprise
the assets. Refer to Note 13 for details of how the development expenditure has been valued.
(iii) Share based payment transactions
The fair value of any options issued as remuneration is measured using the Black-Scholes model. Measurement
inputs include share price on measurement date, exercise price of the instrument, expected volatility (based
on weighted average historic volatility adjusted for changes expected due to publicly available information (if
any)), weighted average expected life of the instruments (based on historical experience and general option
holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds).
(p)
(q)
.
76
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 1: Statement of Significant Accounting Policies (continued)
(r)
Intangibles Assets – Intellectual Property Development Expenditure
Such assets are recognised at cost of acquisition. Expenditure during the research phase of a project is
recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies
identify that the project is expected to deliver future economic benefits and these benefits can be measured
reliably. Development costs have a finite life and are amortised on a systematic basis based on the future economic
benefits over the useful life of the project.
An intangible asset arising from development (or from the development phase of an internal project) is recognised
if, and only if, all the following are demonstrated:
•
•
•
the technical feasibility of completing the intangible asset so that it will be available for use or sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
•
•
the availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset; and
the ability to measure reliably the expenditure attributed to the intangible asset during its development.
Capitalised development costs will be amortised over their expected useful life of the intangible asset once full
commercialisation or production commences.
(s)
(t)
(u)
New and Amended Accounting Policies Adopted by the Group
None noted.
New Accounting Standards for Application in Future Periods
None noted.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation in the current financial year.
77
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 2: Interests in other entities
(a)
Controlled entities
The Group’s principal subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the group, and the proportion of ownership interests held equals
the voting rights held by the group The country of incoporporation or registration is also their principal place of business.
Country of
Incorporation
Interest as at
30 June
(%)
2021
2020
Principal Activity
Parent Entity:
Lepidico Ltd
Subsidiaries of Lepidico Ltd:
Lepidico Holdings Pty Ltd
Li Technology Pty Ltd
Silica Technology Pty Ltd
Bright Minz Pty Ltd
Mica Exploration Pty Ltd
Lepidico (Netherlands)
Coöperatief U.A.
Australia
Australia
Australia
Australia
Australia
Australia
Netherlands
Lepidico (Netherlands) B.V.
Netherlands
Lepidico (UK) Ltd
Lepidico (Canada) Ltd
Lepidico Holdings (Canada) Inc
Lepidico (Canada) Inc
Lepidico (Mauritius) Ltd
Lepidico Chemicals Namibia (Pty)
Ltd
Lepidico Infrastructure Namibia
(Pty) Ltd
Lepidico Chemicals
Manufacturing Ltd
Lepidico Chemicals Namibia (Pty)
Ltd (formerly Desert Lion Energy
(Pty) Ltd)
United
Kingdom
Canada
Canada
Canada
Mauritius
Namibia
Namibia
UAE
Namibia
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
80
100
100
100
-
100
100
100
100
100
100
100
100
80
-
-
-
Lithium Exploration and Investment
Holder of L-Max® Technology
Holder of S-Max® Technology
Holder of LOH-Max® Technology
Lithium Exploration
International Holding Company
Global Marketing Company
Management Company
Dormant
Holding Company
Management Company
Holding Company
Exploration and Development Company
Developer of Phase 1 Concentrator
Developer of Phase 1 Chemical Plant
Exploration and Development Company
78
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 2: Interests in other entities (continued)
(b)
Non-controlling interests (NCI)
Set out below is summarised financial information for Lepidico Chemicals Namibia (Pty) Ltd (LCN), the subsidiary that has a
non-controlling interest and is material to the group. The amounts disclosed for the subsidiary are in Australian dollars (A$)
before inter-company eliminations.
Summarised Balance Sheet
Current assets
Current liabilities
Current net assets/(liabilities)
Non-current assets
Non-current liabilities
Non-current net assets
Net assets
Accumulated NCI
Summarised statement of comprehensive income
Revenue
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Profit/(Loss) allocated to NCI
Summarised cashflows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
2021
$
1,085,257
(157,432)
2020
$
112,295
(162,764)
927,825
(50,469)
17,903,304
(8,925,977)
18,274,825
(8,174,335)
8,977,327
10,100,490
9,905,152
10,050,021
6,635,965
6,785,144
2021
$
-
2020
$
3,459,605
(745,897)
(2,214,280)
2,842,386
3,524,844
2,097,489
1,310,564
(149,179)
(442,856)
2021
$
(247,560)
(654,186)
1,796,229
2020
$
(201,062)
(3,292,016)
3,783,421
Net increase/(decrease) in cash and cash equivalents
894,483
290,343
Under the the Shareholders’ Agreement Term Sheet, Lepidico Ltd, has the discretion to either finance all expenditures of
LCN and/or arrange for third party financing. LCN is currently funded via an interest bearing intercompany loan facility
between the Company and LCN.
79
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 3: Business Combination
(a)
Current Period
On 25 November 2020, the Company acquired 100% of the issued capital in Bright Minz Pty Ltd (Bright Minz).
Bright Minz is the holder of the LOH-Max® process technology which was developed for the production of high
purity lithium hydroxide monohydrate from a lithium sulphate intermediate, without production of sodium sulphate,
thereby reducing capital and operating costs versus conventional process technologies.
The acquisition of LOH-Max® brings all the process technologies employed by the Phase 1 Project under the
Lepidico umbrella, thereby streamlining the process for future third party licences.
Details of the purchase consideration are as following:
Cash paid
Trailing royalty(i)
Total Purchase Consideration
The assets and liabilities recognised as a result of the acquisition are as follows:
LOH-Max® Technology
Net assets acquired
$
10,000
-
10,000
Fair Value
$
10,000
10,000
The fair value of the technology reflected the pre-existing exclusivity arrangement entered into on 18 February 2019
between Lepidico and Bright Minz whereby Lepidico agreed to fund the development of the LOH-Max® technology and was
granted the right to use the process and sole rights for marketing the technology to third parties worldwide.
Trailing Royalty
(i)
In addition to the cash payment the original shareholders of Bright Minz will be entitled to a trailing royalty in relation to any
third party LOH-Max® licences entered into by the Lepidico Group after 1 January 2021. As at the date of acquisition the fair
value of the contingent consideration was considered to be nominal.
Prior Period
(b)
On 11 July 2019 the Company announced the completion of the plan of arrangement with Desert Lion Energy Inc (DLE)
whereby Lepidico acquired all of the outstanding common shares of DLE for consideration of 5.4 Lepidico ordinary shares
for every 1 DLE common share. Details of this business combination were included in Note 3 of the Group’s annual financial
statements for the year ended 30 June 2020.
Note 4: Revenue
Technology Licence Fees
Income
Interest
Government assistance programs
Other Income
Total Revenue
80
2021
$
4,084,027
4,084,027
222
53,421
53,643
4,137,670
2020
$
-
-
16,594
46,964
63,558
63,558
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 5: Administrative Expenses
Office & general
Professional services
Compliance related
Travel
2021
$
273,457
628,844
416,531
-
1,318,832
2020
$
292,643
657,918
487,945
248,175
1,686,681
Other Significant Administrative Expenses
The following significant expenses were incurred during the period
and impacted the financial performance:
Desert Lion Energy acquisition costs
-
1,135,245
Total Administrative Expenses
Note 6: Income Tax Expense
(a)
The components of tax expense comprise:
Current tax
Deferred tax
Losses recouped not previously recognised
1,318,832
2,821,926
2021
$
-
2020
$
-
(593,439)
(696,203)
-
-
Income tax expense/(benefit) reported in statement of comprehensive income
(593,439)
(696,203)
(b)
The prima facie tax benefit on loss from ordinary activities before income tax is
reconciled to the income tax as follows:
Prima facie tax benefit on loss from ordinary activities before income tax at
30% (2020:30%)
(93,264)
(3,110,847)
Add tax effect of:
- Share based payments
- Foreign expenditure
- Deferred tax balances not recognised
- Intercompany loans written off
- Effect of change in tax rate
- Foreign tax rate differential
- Exploration expenditure written off
- Adjustments to income tax of previous years
- CGT Adjustments
- Other non-allowable items
Less tax effect of:
- Deferred tax balances not recognised
- Losses recouped not previously recognised
101,250
48,973
(519,413)
-
-
(44,508)
-
431,909
(482,804)
(35,582)
-
-
153,300
283,840
3,014,827
(1,309,956)
(609,565)
(52,215)
668,086
297,970
-
(31,643)
-
-
Income tax expense/(benefit) reported in statement of comprehensive income
(593,439)
(696,203)
81
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
(c)
Deferred tax recognised:
Deferred Tax Liabilities:
Karibib assets
Exploration expenditure
Property, plant and equipment
L-Max® Technology
L-Max® Pilot Plant
Other
Deferred Tax Assets:
Carry forward revenue losses
Net deferred tax
(d)
Unrecognised deferred tax assets:
Carry forward revenue losses
Carry forward capital losses
Capital raising and other costs
L-Max Licence
Bright Minz acquisition
Provision and accruals
2021
$
2020
$
(3,211,069)
(3,426,317)
(4,245)
(16,469)
(356,263)
(725,102)
(13,210)
(4,245)
(248,698)
(723,772)
(4,396)
1,115,289
981,111
(3,211,069)
(3,426,317)
9,472,874
9,257,874
-
279,785
21,826
2,520
24,397
293,087
382,736
21,826
32,745
9,801,402
9,988,267
(e)
Tax consolidation:
Lepidico Ltd and its wholly owned Australian resident subsidiaries formed a tax consolidated group with effect
from 1 July 2014. Lepidico Ltd is the head entity of the tax consolidated group.
The tax benefits of the above Deferred Tax Assets will only be obtained if:
a)
the Company derives future assessable income of a nature and of an amount sufficient to enable the benefits
to be utilised;
the Company continues to comply with the conditions for deductibility imposed by law; and
b)
c) no changes in income tax legislation adversely affect the company in utilising the benefits.
Note 7: Auditor’s Remuneration
Audit services
2021
$
2020
$
49,461
64,469
82
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 8: Earnings per Share
The calculation of basic profit or loss per share for each year was based on the profit or loss attributable to ordinary
shareholders and using a weighted average number of ordinary shares outstanding during the year. The Company’s potential
ordinary shares were not considered dilutive as the Company is in a loss position.
2021
$
2020
$
Profit/(Loss) attributable to the ordinary equity holders of the Company
0.00006
(0.002)
Profit/(Loss) from continuing operations
282,556
(10,118,237)
$
$
No.
No.
Weighted average number of ordinary shares
5,218,441,770
4,567,787,554
Note 9: Cash and Cash Equivalents
2021
$
2020
$
Cash at bank and in hand
14,738,020
4,792,713
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 25
Note 10: Trade and Other Receivables
Current
Prepaid expenses
R&D tax rebate receivable
Goods and services tax receivable
2021
$
66,063
24,519
153,204
2020
$
354,073
1,194,000
218,790
Total Current Trade and Other Receivables
243,786
1,766,863
Non-Current
Cash backed guarantees
Total Non-Current Trade and Other Receivables
Total Trade and Other Receivables
71,489
71,489
72,829
72,829
315,275
1,839,692
83
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 11: Property, Plant and Equipment
Cost
Balance at 30 June 2019
Buildings &
Infrastructure
$
-
Acquired on business combination
1,741,511
Additions
Disposals
-
-
Furniture,
Fittings &
Equipment
$
70,015
193,703
2,590
(241)
Motor
Vehicles
Assets under
Construction
$
-
$
-
Total
$
70,015
215,359
2,392,807
4,543,380
-
-
-
-
2,590
(241)
Balance at 30 June 2020
1,741,511
266,067
215,359
2,392,807
4,615,744
Additions
Disposals
Impact of foreign exchange
-
-
-
92,283
(23,821)
(543)
-
-
-
-
-
-
92,283
(23,821)
(543)
Balance at 30 June 2021
1,741,511
333,986
215,359
2,392,807
4,683,663
Accumulated Depreciation
Balance at 1 July 2019
Depreciation
Disposals
Impairment
Impact of foreign exchange
Balance at 30 June 2020
Depreciation
Disposals
Impact of foreign exchange
Balance as at 30 June 2021
Net Book Value
At 30 June 2020
-
148,841
-
-
(18,331)
130,510
135,636
-
23,684
289,830
50,330
84,333
(241)
-
(9,579)
124,843
76,761
(23,821)
12,134
-
72,937
-
-
(8,983)
63,954
66,466
-
11,608
-
-
-
50,330
306,111
(241)
2,026,267
2,026,267
366,540
2,392,807
-
-
-
329,647
2,712,114
278,863
(23,821)
47,426
189,917
142,028
2,392,807
3,014,582
1,611,001
141,224
151,405
-
-
1,903,630
1,669,081
At 30 June 2021
1,451,681
144,069
73,331
84
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 12: Exploration and Evaluation Expenditure
Exploration expenditure
43,986,682
42,725,634
The recoverability of the carrying amount of exploration assets is dependent on the successful development and commercial
exploitation or sale of the respective mining permits. Amortisation of the costs carried forward for the development phase
is not being charged pending the commencement of production. The impairment of exploration expenditure represents
projects that the company is no longer pursuing.
2021
$
2020
$
Reconciliation of movements during the year:
Balance at the beginning of year
Exploration and evaluation assets acquired
Exploration and evaluation costs capitalised
Exploration and evaluation costs written off
Impact of foreign exchange
Balance at the end of the year
Note 13: Intangible assets
L-Max® Technology
S-Max® Technology
LOH-Max® Technology
Intangible assets
2021
$
2020
$
42,725,634
-
1,054,639
(408)
206,817
1,928,203
40,521,647
2,504,833
(2,229,049)
-
43,986,682
42,725,634
2021
$
2020
$
24,055,934
23,354,178
149,017
426,105
146,109
370,147
24,631,056
23,870,434
The recoverability of the carrying amount of the L-Max®, S-Max® and LOH-Max® Technologies is dependent of the successful
development and commercial exploitation or sale of the asset.
Capitalised development costs will be amortised over their expected useful life of the intangible assets once full
commercialisation of production commences.
Reconciliation of movements during the year:
Balance at the beginning of year
Development costs capitalised
Technology acquired
Research and Development Tax Credit received/receivable
Impact of foreign exchange
Balance at the end of the year
2021
$
2020
$
23,870,434
774,687
10,000
(24,519)
454
22,925,130
2,200,112
-
(1,254,808)
-
24,631,056
23,870,434
85
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 14: Trade and Other Payables
Current
Trade payables
Sundry payables and accrued expenses
2021
$
503,334
464,350
2020
$
262,347
302,324
Total Current Trade and Other Payables
967,684
564,671
Note 15: Provisions
Current
Employee Provisions
Reconciliation of movements during the year:
Balance at the beginning of year
Provisions acquired
Additional provisions
Provisions used/paid out
Impact of foreign exchange
Balance at the end of the year
Note 16: Convertible Note
Current
Liability component of convertible note
2021
$
2020
$
140,105
107,652
2021
$
107,652
-
91,198
(61,244)
2,499
2020
$
85,677
36,300
102,044
(112,520)
(3,849)
140,105
107,652
30 June 2021
$
30 June 2020
$
-
5,215,104
The liability component of the convertible note was measured at amortised cost. The accretion expense for the year was
calculated by applying an effective interest rate of 16.8% to the liability component for the year. Prepaid interest and fees
were amortised against the liability component. The equity component of $990,000 remains credited to equity.
Reconciliation of movements during the year:
Balance at the beginning of period
Liability component acquired
Accretion expense for the period
Amortisation of interest and fees
Convertible note repaid
Impact of foreign exchange
Balance at the end of the year
86
30 June 2021
$
30 June 2020
$
5,215,104
-
434,122
(301,327)
(5,262,800)
-
5,404,960
901,639
(780,692)
-
(85,099)
(310,803)
-
5,215,104
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 17: Deferred Revenue
Deferred revenue of $6,071,577 (US$4,558,272) represents a payment from Jiangxi Jinhui Lithium Co Ltd (Jinhui), a private
Chinese corporation under an offtake agreement dated 6 November 2017 and subsequently amended on 13 February 2018
(the Jinhui Lithium Offtake Agreement) which provides for the sale of material located in the stockpile at the Karibib project
in Namibia.
The deferred revenue is classified as deferred revenue as the payment is no longer refundable and shall continue to amortise
against any future shipments of the stockpile material.
The term of the Jinhui Lithium Offtake Agreement began on 16 November 2017 and ends on the earlier of:-
(i)
(ii)
60 months following such date; and
the date that is 15 business days after all concentrate produced from the stockpiled material has been loaded on to
the vessel nominated by Jinhui; and has been paid for by Jinhui.
Reconciliation of movements during the year:
Balance at the beginning of the year
Deferred Revenue acquired
Impact of foreign exchange
Balance at the end of the year
Note 18: Contributed Equity
a)
Share capital
Fully paid ordinary shares
Share Issue Costs
30 June 2021
$
30 June 2020
$
6,629,144
-
(557,567)
-
6,447,728
181,416
6,071,577
6,629,144
2021
2020
Number
$
Number
$
6,152,082,446
100,447,338
5,185,735,038
84,926,182
(5,791,060)
94,656,278
(4,844,588)
80,081,594
Ordinary shares have the right to receive dividends and, in the event of winding-up the Company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
87
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 18: Contributed Equity (continued)
Share capital (continued)
a)
Movements in ordinary share capital
Description
Opening Balance
Exercise of options
Fair value of options exercised
Exercise under CPA
Entitlement Offer
Less: Share issue costs
Closing Balance
Date
Number of
shares
Issue Price
$
30 June 2020
5,185,735,038
Various
2,144,794
29 January 2021
20 April 2021
-
-
18 June 2021
964,202,614
0.02
-
0.0218
0.013
80,081,594
42,896
18,630
2,925,000
12,534,633
(946,475)
6,152,082,446
94,656,278
Share options
b)
As at reporting date, Lepidico has the following options on issue:
Number
Exercise Price
9,450,000
65,000,000
945,000
274,698,811
190,764,921
3,921,982
73,000,000
100,000,000
5,967,000
482,101,307
67,500,000
18,090,000
1,291,439,021
$0.040
$0.026
$0.100
$0.020
$0.050
$0.100
$0.025
$0.016
$0.350
$0.026
$0.012
$0.020
Grant
11 July 2019
Expiry
25 October 2021
23 November 2018
22 November 2021
11 July 2019
18 May 2020
5 June 2019
11 July 2019
31 March 2022
18 May 2022
5 June 2022
21 June 2022
21 November 2019
21 November 2022
8 December 2020
8 December 2022
11 July 2019
18 June 2021
26 February 2023
18 June 2023
19 November 2020
19 November 2023
11 July 2019
14 January 2024
Options carry no dividend or voting rights. Upon exercise, each option is convertible into one ordinary share to rank pari
passu in all respects with the Group’s existing fully paid ordinary shares.
88
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 18: Contributed Equity (continued)
b)
Share options (continued)
Movements in Options
Balance at 30 June 2019
Granted
Exercised
Expired
Balance at 30 June 2020
Granted
Exercised
Expired
Balance at 30 June 2021
Weighted
Average Exercise
Price
$
0.046
0.028
0.015
0.025
0.040
0.023
0.020
0.054
0.029
Number
586,282,952
388,217,587
(5,000,000)
(55,000,000)
914,500,539
649,601,307
2,144,794
(270,518,031)
1,291,431,021
c)
Warrants
As at reporting date, all warrants associated with the Desert Lion Energy Inc business combination had expired.
Movements in Warrants
Balance at 30 June 2019
Recognised on acquisition
Expired
Balance at 30 June 2020
Expired
Balance at 30 June 2021
Number
-
139,797,500
(36,013,820)
103,783,680
(103,783,680)
-
Weighted Average
Exercise Price
-
0.141
0.432
0.040
0.040
-
89
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 18: Contributed Equity (continued)
d)
Share Based Payments
During the year the Company made the following share based payments:
Related Party Options
(i)
On 19 November 2020, the Company issued a total of 67,500,000 options to directors, employees and consultants
under the Company’s Share Option Plan and were valued using Black Scholes with the following assumptions:
Number of options in series
67,500,000
Unlisted Options
Grant date share price
Exercise price
Expected volatility
Option life
Dividend yield
Interest Rate
$0.008
$0.012
130%
3 years
0.00%
0.08%
(ii)
Cornish Lithium Strategic Collaboration
On 8 December 2020 the Company issued 100,000,000 options to Cornish Lithium Ltd (“CLL”), a UK
registered private company pioneering the development of lithium mica deposits within the large St Austell
granite complex in Cornwall, UK in accordance with the strategic collaboration agreement entered into on
4 December 2020. The options have a two year expiry and an exercise price was set at A$0.016, being a
100% premium to the closing price on the day immediately preceeding the announcement of the strategic
collaboration. The deemed purchase price of the Options under the Collaboration Agreement was
C$106,000 (A$111,173).
e)
Controlled Placement Agreement
On 23 December 2019, the Company entered into a Controlled Placement Agreement (CPA) with Acuity Capital
to provide Lepidico with up to $7.5 million of standby equity capital over a 26 month period to fund future product
research and development work, new process technology development and working capital.
As collateral for the CPA, Lepidico issued 230,000,000 ordinary shares at nil consideration to Acuity Capital
(Collateral Shares) but may, at any time, cancel the CPA and buy back the Collateral Shares for no consideration
(subject to shareholder approval).
During the year Lepidico raised A$2,925,000 (after costs) through the set-off of 134,000,000 Collateral Shares (Set-
off Shares) previously issued to Acuity Capital under the CPA. The Set-Off Shares had a deemed price of $0.0218.
As at 30 June 2021 there were 96,000,000 Collateral Shares held by Acuity Capital which, if unused on the expiry
date, are otherwise required to be returned to the Company upon termination of the CPA.
90
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 19: Reserves
Option Reserve
Warrant Reserve
Foreign Currency Translation Reserve
Total Reserves
2021
$
5,345,140
415,135
850,669
2020
$
4,915,097
415,135
377,488
6,610,944
5,707,720
a)
The options reserve is used to recognise the fair value of all options on issue but not yet exercised.
Option Reserve
Opening Balance
Options issued on acquisition
Share based payments for the year
Options acquired during the year
Transfer of value on exercise of options
Closing Balance
2021
$
2020
$
4,915,097
3,782,750
-
337,500
111,173
(18,630)
5,345,140
716,347
511,000
-
(95,000)
4,915,097
b)
The warrants reserve is used to recognise the fair value of all warrants contractually recognised but not yet exercised.
Warrant Reserve
Opening Balance
Fair value of warrants recognised on acquisition
Transfer of value on exercise of warrants
Closing Balance
2021
$
415,135
-
-
415,135
2020
$
-
415,135
-
415,135
c)
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.
Foreign Currency Translation Reserve
Opening Balance
Movement during the year
Closing Balance
Note 20: Contingent Liabilities and Contingent Assets
There are no contingent liabilities as at 30 June 2021.
2021
$
377,488
473,181
850,669
2020
$
75,918
301,570
377,488
91
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 21: Segment reporting
Reportable Segments
The Group operates two reportable segments, being mineral exploration and development of its technologies including
L-Max®, LOH-Max® and S-Max®, which reflects the structure used by the Group’s management to assess the performance of
the Group.
(i) Segment performance
Year ended 30 June 2021
Revenue
Mineral
Exploration
Technology
Corporate &
Unallocated items
$
$
$
Total
$
-
4,084,027
53,643
4,137,670
Profit/(Loss) before tax
(408)
3,671,830
(3,982,305)
(310,883)
Year ended 30 June 2020
Revenue
Loss before tax
(ii) Segment assets
As at 30 June 2021
As at 30 June 2020
Geographical Information
Australia
Canada
(i) Segment performance for
the year ended:
30 June 2021
Revenue
$
4,137,670
$
-
-
(4,267,014)
-
-
63,558
63,558
(6,547,426)
(10,814,440)
45,607,272
24,655,575
15,077,267
85,340,114
44,498,939
25,064,434
5,568,730
75,132,103
Africa
$
UAE
$
Europe
$
Total
$
-
-
-
4,137,670
Profit/(Loss) before tax
2,173,607
(1,392,796)
(579,445)
(42,294)
(469,955)
(310,883)
30 June 2020
Revenue
62,573
985
-
-
-
63,558
Profit/(Loss) before tax
(2,285,650)
(3,656,251)
(2,501,415)
(17,914)
(2,353,210)
(10,814,440)
ii) Segment assets
As at 30 June 2021
38,361,367
110,814
46,719,272
135,824
12,837
85,340,114
As at 30 June 2020
29,519,849
866,269
44,745,985
-
-
75,132,103
92
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 22: Commitments
Operating lease commitments
As at 30 June 2021, the Group does not have any operating leases.
Exploration lease commitments
The Group has committed to the following tenement expenditures to maintain them in good standing until they are farmed
out, sold, reduced, relinquished, exemptions from expenditure are applied or are otherwise disposed of.
These commitments, net of farm outs, are not provided for in the financial statements and are:
Not later than one year
After one year but less than five years
Note 23: Cash Flow Information
Reconciliation of Cash Flow from Operations
with Loss after Income Tax
Profit/(Loss) after income tax
Adjustments items not impacting cash flow used in operations:
Depreciation and amortisation
Exploration expenditure written-off
Fair value of options issued
Share based payments
Desert Lion acquisition costs
Accretion expense
Realised FX (Gain)/Loss
Impairment of assets under construction
Income tax benefit
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Cash flow used in operations
30 June 2021
30 June 2020
$
324,361
484,450
808,814
$
3,002,903
1,828,297
4,831,200
2021
$
2020
$
282,556
(10,118,237)
278,862
408
337,500
-
-
434,122
63,248
-
(593,439)
306,111
2,229,049
511,000
515,538
1,135,245
901,639
-
2,026,267
(696,203)
27,284
173,616
32,453
(446,492)
(1,062,374)
21,975
1,036,610
(4,676,482)
93
2021 LEPIDICO ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 24: Related Party Transactions
Key Management Personnel Remuneration
Cash salaries, fees and other short-term benefits
Post employment benefits
Share based payments
2021
$
2020
$
1,845,314
1,548,668
42,074
337,500
38,535
483,000
2,224,888
2,070,203
Detailed remuneration disclosures are provided in the remuneration report contained in the Directors' Report.
Payments to director-related parties
Payments to director-related entities(1)
2021
$
2020
$
126,164
1,229,403
(1) Payments were made to Strategic Metallurgy Pty Ltd, a company of which Mr Gary Johnson is a director and beneficial shareholder. The
payments were in relation to the development of L-Max® technology on an arm’s length basis. As at 30 June 2021 invoices totalling $Nil
are payable (2020: $2,860).
Note 25: Financial Risk Management
The Group has exposure to the following risks:
(a) Credit Risk
(b) Liquidity Risk
(c) Market Risk
This note presents information on the Group’s exposure to each of the above risks, their objectives, policies and processes
for measuring risk, and management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management is responsible for establishing procedures which provide assurance that major business risks are identified,
consistently assessed and appropriately mitigated.
The Group’s Audit & Risk Management Committee oversees how management monitors compliance with the Group’s risk
management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group.
(a)
Credit Risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial
loss to the consolidated entity. The consolidated entity has adopted the policy of only dealing with creditworthy
counter-parties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating
the risk of financial loss from defaults. The consolidated entity measures credit risk on a fair value basis. The
consolidated entity does not have any significant credit risk exposure to any single counter-party.
The Group’s cash and cash equivalents are held with HSBC Bank and First National Bank Namibia, and management
consider the Group’s exposure to credit risk is low.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
94
Note
9
10
2021
$
2020
$
14,738,020
315,275
4,792,713
1,839,692
15,053,295
6,632,405
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
(b)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and
by continuously monitoring forecast and actual cash flows. Typically, the Group ensures it has sufficient cash on
demand to meet expected expenditures, including servicing financial obligations; this excludes the potential impact
of extreme circumstances that cannot be reasonably predicted, such as the COVID-19 pandemic.
The Company will need to raise additional capital to fund the development of the integrated Phase 1 L-Max® Plant.
The decision on how and when the Company will raise future capital will largely depend on the market conditions
existing at that time.
The following table analyses the Group’s financial liabilities into relevant maturity periods based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows and hence will not necessarily reconcile with the amounts disclosed in the
statement of financial position.
30 June 2021
Trade & other payables
Deferred Revenue
Total
30 June 2020
Trade & other payables
Convertible Note
Deferred Revenue
Note
14
17
Note
14
16
17
Carrying
amount
Contractual
cash
outflows
Within 1
year
$
$
$
967,684
967,684
967,684
6,071,577
-
-
7,039,261
967,684
967,684
1-2 years
2-5 years
$
-
-
-
$
-
-
-
Carrying
amount
Contractual
cash
outflows
Within 1
year
$
$
$
564,671
564,671
564,671
5,215,104
5,328,465
5,328,465
6,629,144
-
-
1-2 years
2-5 years
$
-
-
-
-
$
-
-
-
-
Total
12,408,919
5,893,136
5,893,136
Assets pledged as security
Nil.
(c)
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposure within acceptable parameters, while optimising
the return.
95
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
(c)
Interest Rate Risk
Market Risk (continued)
(i)
As at and during the year ended on reporting date the Group had no significant interest-bearing assets or liabilities
other than liquid funds on deposit. As such, the Group’s income and operating cash flows (other than interest
income from funds on deposit) are substantially independent of changes in market interest rates. The Group’s
exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and
liabilities is set out below:
%
2021
$
%
2020
$
Financial assets
Cash assets
Floating rate
0.01%
14,738,020
0.23%
4,792,713
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in higher interest-
bearing cash management account.
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk over the reporting period. The
sensitivity analysis demonstrates the effect on the current year’s results and equity values reported at the end of the
reporting period which would result from a 1% change in interest rates.
Change in Loss
Increase by 1%
Decrease by 1%
Change in Equity
Increase by 1%
Decrease by 1%
2021
$
45,970
(222)
45,970
(222)
2020
$
56,159
(16,979)
56,180
(16,979)
(c)
Currency Risk
Market Risk (continued)
(ii)
The Group operates internationally and is exposed to foreign exchange risk on its financial assets and liabilities.
Fluctuations in exchange rates may have a significant affect on the cash flows of the Company. Future changes in
exchange rates could materially affect the Company’s results in either a positive or negative direction. The Group’s
currency risk arises primarily with respect to the Namibian dollar (NAD) and South African Rand (ZAR), which are
equivalent, Canadian dollars (CAD) and United States dollars (USD). In addition, the Company has transactions in
British pounds (GBP) and Euro (EUR). The Group has not entered into any derivative financial instruments to hedge
such transactions. The Group reivews its foreign currency exposure, including commitments on an ongoing basis.
The Group’s exposure to currency risk arising on financial assets and financial liabilities demoninated in various
currencies was :
30 June 2021
Cash and cash equivalents
Trade and other receivables
NAD
$
11,135,440
709,225
CAD
$
75,412
21,798
Trade and other payables
(2,553,288)
(210,977)
USD
$
18,915
-
-
Deferred Revenue
-
-
(4,558,272)
GBP
£
54,448
-
(34,507)
-
Net currency exposure
9,291,377
(113,767)
(4,539,357)
19,941
EUR
€
-
8,113
-
-
8,113
96
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
(c)
Market Risk (continued)
(ii) Currency Risk (continued)
30 June 2020
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Liability component – Convertible Note
Deferred Revenue
NAD
$
732,529
660,719
(2,350,531)
-
-
CAD
$
362,245
386,147
(57,404)
(4,893,627)
USD
$
9,645
-
-
-
-
(4,558,272)
GBP
£
50,360
-
(11,074)
-
-
Net currency exposure
(957,283)
(4,202,639)
(4,548,627)
39,286
The following significant exchange rates applied during the year:
EUR
€
-
-
-
-
-
-
1 USD:AUD
1 NAD:AUD
1 CAD:AUD
Average rate
Reporting date spot rate
2021
1.339942
0.087141
1.044372
2020
1.491693
0.095624
1.111031
2021
1.331991
0.093103
1.074449
2020
1.453973
0.083848
1.056137
Sensitivity Analysis
The following table details the Group’s sensitivity arising in respect of translation of its financial assets and financial liabilities
to a 10% movement (2020: 10%) in the Australian dollar against the currencies where it has significant currency risk at the
reporting date, with all other variables held constant.
NAD
If the NAD had strengthened against the AUD
If the NAD had weakened against the AUD
CAD
If the CAD had strengthened against the AUD
If the CAD had weakened against the AUD
USD
If the USD had strengthened against the AUD
If the USD had weakened against the AUD
2021
$
110,277
(110,277)
2020
$
11,682
(11,682)
(12,224)
12,224
(447,872)
447,872
(604,638)
604,638
(661,358)
661,358
Commodity Price Risk
(iii)
The Group is operating primarily in the exploration and evaluation phase and accordingly the Group’s financial
assets and liabilities are not yet subject to commodity price risk.
Capital Management
(iv)
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern
and to maintain a strong capital base sufficient to maintain future exploration and development of its projects. In
order to maintain or adjust the capital structure, the Group may return capital to shareholders, issue new shares or
sell assets.
There were no changes in the Group’s approach to capital management during the year. Risk management policies
and procedures are established with regular monitoring and reporting.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
97
2021 LEPIDICO ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
for the Year ended 30 June 2021
Note 26: Parent Entity Financial Information
Assets
Current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Shareholders’ Equity
Issued capital
Reserves
Accumulated Losses
Total Shareholders’ Equity
Result of the parent entity
Loss for the year
Other comprehensive loss
2021
$
2020
$
13,736,055
4,391,351
71,709,721
60,057,622
461,223
325,310
461,223
325,310
127,098,312
6,523,933
112,523,626
5,452,792
(62,373,746)
(58,244,106)
71,248,499
59,732,312
(4,129,640)
(8,228,712)
641,098
(611,572)
Total comprehensive loss for the year
(3,488,542)
(8,840,284)
(b)
Contractual commitments for the acquisition of property, plant and equipment
As at 30 June 2021 the parent entity has no contractual commitments for the acquisition of property, plant or
equipment.
(c)
Guarantees and contingent liabilities
As at 30 June 2021 the parent entity has no guarantees or contingent liabilities other than as disclosed in Note 20.
98
2021 LEPIDICO ANNUAL REPORT
DIRECTORS’ DECLARATION
In the opinion of the Directors of Lepidico Ltd (the Company):
1.
The financial statements and notes and the remuneration disclosures that are contained in the Directors’ Report, are
in accordance with the Corporations Act 2001, including:
a.
b.
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its
performance for the year ended on that date.
2.
3.
4.
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
chief executive officer and chief financial officer for the financial year ended 30 June 2021.
Note 1 confirms that the financial statements also comply with the International Financial Reporting Standards as
issued by the International Accounting Standards Board.
This declaration is made in accordance with a resolution of the Board of Directors.
Joe Walsh
Managing Director
Dated this 24th day of September 2021
99
2021 LEPIDICO ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LEPIDICO LTD
REPORT ON THE AUDIT
OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Lepidico Limited (the Company) and its subsidiaries (the “Group”), which comprises
the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income,
the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
• giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year
then ended; and
• complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001
and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the “Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors
of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
Key Audit Matters
We have determined the matters described below to be the key audit matters to be communicated in our report.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report of the current year. These matters were addressed in the context of our audit of the financial report as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Moore Australia Audit (WA) – ABN 16 874 357 907.
An independent member of Moore Global Network Limited - members in principal cities throughout the world.
Liability limited by a scheme approved under Professional Standards Legislation.
100
2021 LEPIDICO ANNUAL REPORT Key Audit Matters
Carrying value of Exploration & Evaluation Expenditure and Intangible Assets
Refer to Notes 1(g), and (r), Notes 12 Exploration & Evaluation Expenditure & 13 Intangible Assets
As at 30 June 2021 the Group had capitalised exploration
and evaluation expenditure of $43,986,682 and intangible
assets with a carrying value of $24,631,056.
The ability to recognise and to continue to defer
exploration-evaluation assets under AASB 6 is impacted
by the Group’s ability, and intention, to continue to explore
and evaluate the tenements or its ability to realise this
value through development or sale.
The intangible asset includes the Group’s investment in
the L-Max® Technology, S-Max® Technology and LOH-
Max® Technology, including the cost of acquisition of the
technology, subsequent development costs and patent
fees capitalised. As part of their annual impairment review,
management prepared an analysis of the recoverable
amount of the technology which was, in part, based on a
“fair value less costs to sell” analysis. Note that given the
early stages of development of the technology, there are
inherent risks in relying on forecast cash flows as a reliable
estimate of value-in-use. Notwithstanding this, they have
also considered the results of the vertically integrated
Phase 1 Project Definitive Feasibility Study incorporating
the Karibib assets, which was completed in May 2020, in
their impairment review of the exploration and evaluation
and intangible assets.
The carrying values of the capitalised exploration and
evaluation and technology assets were key audit matters
given the significance of the technology and exploration
activities to the Group’s balance sheet, and the judgement
involved in the assessment of their values.
Our procedures included, amongst others:
• Assessing the methodologies used by management to
estimate recoverable amounts of the exploration and
evaluation and technology assets, including challenging
the methodologies used, testing the integrity of the
information provided, and assessing the appropriateness
of the key assumptions adopted based on our knowledge
of the technology and industry.
• Reviewing minutes of Board meetings, ASX
announcements, the latest professional technological and
other reports for evidence of any impairment indicators
or material adverse changes in relation to the technology
asset since completion of the Pre-Feasibility Report and
independent valuation report (included in the target’s
statement document) announced in 2017. There were no
such indicators during the year.
• Testing expenditures and other additions to the technology
and exploration-evaluation assets during the year on a
sample basis against supporting documentation such as
supplier invoices and cost agreements and ensuring such
expenditures and additions are appropriately recorded in
accordance with applicable accounting standards.
• Reviewing the Group’s rights to tenure to its areas of
interest and commitment to continue exploration and
evaluation activities in these interests and ensuring
capitalised expenditures relating to areas of interest which
are being discontinued or no longer being budgeted for
are appropriately impaired.
• Review of an updated JORC code (2012) compliant
mineral resource estimate, completed in January 2020 by
Snowden Mining industry Consultants Pty Ltd, in respect of
ore reserves at Karibib, Namibia.
• Review of the vertically integrated Phase 1 Project
Definitive Feasibility Study completed in May 2020, which
is based on a commercial scale L-Max Plant, comprising
an integrated mine, concentrator and chemical conversion
plant development
• Compared the Group’s market capitalisation as at 30
June 2021 ($74 million) to its net asset position ($74.9
million), noting that the market capitalisation at balance
date approximated net assets. Market capitalisation below
net assets is an indicator of possible impairment, thereby
requiring further consideration.
• Assessing the appropriateness of the relevant disclosures
in the financial statements.
101
2021 LEPIDICO ANNUAL REPORT Key Audit Matters (continued)
Related Party Transactions & Share Based Payments to Key Management Personnel
Refer to Remuneration Report, Note 18 d) Share Based Payments, Note 24 Related Party Transactions
During the year ended 30 June 2021, the Group transacted
with Key Management Personnel and their related entities
including:
• Awarded share-based payments amounting to
$337,500 in the form of share options, to Key
Management Personnel
• Paid $126,164 in development and consulting costs
related to the L-Max Technology
As these transactions are made with related parties,
there are additional inherent risks associated with these
transactions, including the potential for these transactions
to be made on terms and conditions more favourable than
if they had been with an independent third party.
The value of the share-based payments is a key audit
matter due to it being a key material transaction with
members of key management personnel, the valuation
of which involves significant judgement and accounting
estimation.
• Our procedures included, amongst others the following:
• Enquiring and obtaining confirmations from Key
Management Personnel regarding related party
transactions occurring during the period.
• Reviewing minutes of meetings, ASX announcements and
agreements, and considered other transactions undertaken
during the financial year.
• Reviewing payments, receipts and general journals
throughout the year, and examining transactions with
known related parties, or those that appear large or
unusual for the Group.
• Evaluating, based on supporting documentation, whether
related party transactions were on an arms-length basis.
• Assessing the valuation methodology used by
management to estimate fair value of share options issued,
including testing the integrity of the information provided,
assessing the appropriateness of the key assumptions
input into the valuation model and recalculating the
valuation using the Black Scholes Model.
• Assessing whether the share-based payments have been
appropriately classified and accounted for in the financial
statements.
• Assessing the appropriateness of the relevant disclosures
in the financial statements
Other Information
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2021 but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so
102
2021 LEPIDICO ANNUAL REPORT Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located on the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf This description forms part of
our auditor’s report.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report as included in the directors’ report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Lepidico Limited, for the year ended 30 June 2021 complies with section 300A of
the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian Auditing Standards.
Neil Pace
PARTNER
MOORE AUSTRALIA AUDIT (WA)
CHARTERED ACCOUNTANTS
Signed at Perth this 24th day of September 2021.
103
2021 LEPIDICO ANNUAL REPORT
SUPPLEMENTARY (ASX) INFORMATION
The Information set out below was applicable as at 30 September 2021.
FULLY PAID ORDINARY SHARES (ASX:LPD)
Top 20 Holders of Fully Paid Ordinary Shares
Shareholder
Strategic Metallurgy Holdings Pty Ltd
BNP Paribas Nominees Pty Ltd Six Sis Ltd
BNP Paribas Nominees Pty Ltd ACF Clearstream
HSBC Custody Nominees (Australia) Limited
Perth Capital Pty Ltd
Citicorp Nominees Pty Limited
Acuity Capital Investment Management Pty Ltd
Mr Johannes Hendrik Thorburn
Bacchus Capital Advisers Limited
BNP Paribas Nominees Pty Ltd
Strategic Metallurgy Pty Ltd
1
2
3
4
5
6
7
8
9
10
11
12 Mr Gregory Giannopoulos
13
14
Clickable Publishing Pty Ltd
Netwealth Investments Limited
15 Mr Ivars Vadzis
16 Mr Gavin Sidney Becker & Mrs Wendy Mary Becker
17
18
Rennie Jackson SMSF Pty Limited
Avalon Retirement Investments Pty Ltd
19 Ms Kelley Marie Attias
20 Mr Bill Georgaklis & Mrs Georgia Georgaklis
Number
296,271,201
178,037,023
167,194,410
140,646,244
130,000,000
104,762,156
96,000,000
56,788,306
51,900,073
50,152,997
50,000,134
50,000,000
43,056,987
38,031,783
36,586,319
33,500,000
32,000,000
31,107,472
27,627,766
27,018,389
%
4.82%
2.89%
2.72%
2.29%
2.11%
1.70%
1.56%
0.92%
0.84%
0.82%
0.81%
0.81%
0.70%
0.62%
0.59%
0.54%
0.52%
0.51%
0.45%
0.44%
Total
1,640,681,260
26.67%
Substantial Shareholders
The following shareholders held a substantial interest, being 5.0% or greater, in the issued capital of the Company:
Shareholder
Number of Shares
Strategic Metallurgy Holding Pty Ltd and Gary Donald Johnson
370,618,485
%
6.02%
Distribution of Shares
The distribution of members and their shareholding was as follows:
Number Held
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
Total Number of Shareholders
Holders
930
276
334
5,117
4,854
11,511
104
2021 LEPIDICO ANNUAL REPORT LISTED OPTIONS EXPIRING 5 JUNE 2022 AT $0.05 (ASX : LPDOB)
Top 20 Holders of Listed Options
Shareholder
Galaxy Resources Limited
BNP Paribas Nominees Pty Ltd Six Sis Ltd
Mr David Ariti
Isaiah Sixty Pty Ltd
Mr David Joseph Parrella
Cameron Cooper Investments Pty Ltd
Dow Dow Limited
Mr Antony Edward Anderson
1
2
3
4
5
6
7
8
9 Wythenshawe Pty Ltd
10 Mrs Harshini Lanka Wijetunga
11
12
13
14
Strategic Metallurgy Holdings Pty Ltd
Bacchus Capital Advisers Limited
BNP Paribas Nominees Pty Ltd ACF Clearstream
G B Duffy & Associates Pty Ltd
15 Mr Anthony Charles Kenworthy
16 Mr Charlie Nikolovski
17
18
19
Fabulous Future Pty Ltd
Paul Thomson Furniture Pty Ltd
Netwealth Investments Limited
20 Mr Alfred Krendl
Total
Distribution of Listed Options
The distribution of members and their option holding was as follows:
Number Held
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
Total Number of Option Holders
Number
20,555,556
6,480,657
5,549,101
5,005,000
4,000,000
3,329,670
3,300,137
3,000,000
2,801,588
2,500,000
2,273,552
2,271,910
2,199,474
2,000,000
2,000,000
2,000,000
2,000,000
1,864,763
1,832,128
1,800,000
76,763,536
Holders
142
433
253
578
259
1,665
%
10.78%
3.40%
2.91%
2.62%
2.10%
1.75%
1.73%
1.57%
1.47%
1.31%
1.19%
1.19%
1.15%
1.05%
1.05%
1.05%
1.05%
0.98%
0.96%
0.94%
40.25%
105
2021 LEPIDICO ANNUAL REPORT LISTED OPTIONS EXPIRING 18 JUNE 2023 AT $0.026 (ASX : LPDOD)
Top 20 Holders of Listed Options
Shareholder
Isaiah Sixty Pty Ltd
CS Third Nominees Pty Limited
Mr Mark Trent
Mr Morgan J Mcinnes
Rookharp Capital Pty Limited
Mr Ryan James Rowe
Mr Antony Edward Anderson
Mr Bin Liu
Mr Patrick Joseph Naughton
Christopherson Super Fund Pty Ltd
Perth Capital Pty Ltd
BNP Paribas Nominees Pty Ltd Six Sis Ltd
1
2
3
4
5
6
7
8
9
10
11
12
13 Mrs Yan Wang
14 Mr Graham Woodward & Mrs Sheryl Woodward
15 Mrs Emilia Mawer
16 Mr Danny Forwood
17
CS Fourth Nominees Pty Limited
18 Mr Mitchell James Gill
19
Finclear Services Nominees Pty Limited
20 G B Duffy & Associates Pty Ltd
Number
34,174,322
15,424,532
15,000,000
14,500,000
12,692,310
10,000,000
9,700,000
9,000,000
7,751,700
7,551,175
7,500,000
6,298,516
6,173,077
6,000,000
6,000,000
5,623,922
5,286,065
5,000,000
5,000,000
5,000,000
%
7.09%
3.20%
3.11%
3.01%
2.63%
2.07%
2.01%
1.87%
1.61%
1.57%
1.56%
1.31%
1.28%
1.24%
1.24%
1.17%
1.10%
1.04%
1.04%
1.04%
Total
193,675,619
40.18%
Distribution of Listed Options
The distribution of members and their option holding was as follows:
Number Held
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
Total Number of Option Holders
Holders
61
331
176
558
477
1,603
106
2021 LEPIDICO ANNUAL REPORT UNLISTED OPTIONS
Unlisted Option holdings as at 30 September 2021
The company has 343,873,982 unlisted options with varying expiry and exercise price on issue.
9,450,000 options expiring 25 October 2021 with an exercise price of 4.0c (“A”), which were issued in accordance with
the Plan of Arrangement for the acquisition of Desert Lion Energy Inc.
65,000,000 options expiring 22 November 2021 with an exercise price of 2.6c (“B’), which were issued to the Company’s
Directors and under the Company Employee Share Plan.
945,000 options expiring 31 March 2022 with an exercise price of 10.0c (“C”), which were issued in accordance with the
Plan of Arrangement for the acquisition of Desert Lion Energy Inc.
3,921,982 options expiring 20 June 2022 with an exercise price of 10.0c (“D”), which were issued in accordance with the
Plan of Arrangement for the acquisition of Desert Lion Energy Inc.
73,000,000 options expiring 21 November 2022 with an exercise price of 2.5c (“E’), which were issued to the Company’s
Directors and under the Company Employee Share Plan.
100,000,000 options expiring 8 December 2022 with an exercise price of 1.6c (“F”), which were issued to Cornish Lithium
Ltd.
5,967,000 options expiring 26 February 2023 with an exercise price of 35.0c (“G”), which were issued in accordance with
the Plan of Arrangement for the acquisition of Desert Lion Energy Inc.
67,500,00 options expiring 19 November 2023 with an exercise price of 1.2c (“H”), which were issued to the Company’s
Directors and under the Company Employee Share Plan.
18,090,000 options expiring 14 January 2024 with an exercise price of 2.0c (“I”), which were issued in accordance with the
Plan of Arrangement for the acquisition of Desert Lion Energy Inc.
1-1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
101,000 and above
Total number of holders
A
-
-
-
-
3
3
B
-
-
-
-
7
7
C
-
-
-
-
2
2
D
-
-
-
-
5
5
E
-
-
-
-
9
9
F
-
-
-
-
1
1
G
-
-
-
2
6
8
H
-
-
-
-
7
7
I
-
-
-
-
9
9
107
2021 LEPIDICO ANNUAL REPORT VOTING RIGHTS
Lepidico Ltd ordinary shares carry voting rights of one vote per share. There are no voting rights attaching to any other class
of security.
UNMARKETABLE PARCELS
Minimum $500.00 parcel at $0.023 per share
Minimum Parcel Size
21,740
Holders
2,603
Shares
21,846,741
RESTRICTED AND ESCROWED SECURITIES
There are currently no restricted or escrowed securities.
ON-MARKET BUY-BACK
There is no current on-market buy-back.
TENEMENT INFORMATION
The Company currently holds interests in tenements as set out below.
NAMIBIAN OPERATIONS, Karibib Project
Karibib Project Tenement Schedule
Tenement ID
ML 204
EPL 5439
EPL 5555¹
EPL 5718
Registered Holder
Lepidico Interest
Expiry Date
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico Chemicals Namibia (Pty) Ltd
Lepidico Chemicals Namibia (Pty) Ltd
80%
80%
80%
80%
18/06/2028
27/10/2021
03/04/2021
Area
69 km²
225 km²
539 km²
07/05/2022
200 km²
1 Licence expired 3 April 2021; application for a 2-year renewal lodged, pending approval
108
2021 LEPIDICO ANNUAL REPORT
CORPORATE DIRECTORY
DIRECTORS
Gary Johnson (Non-Executive Chair)
Julian (Joe) Walsh (Managing Director)
Mark Rodda (Non-Executive Director)
Cynthia Thomas (Non-Executive Director)
JOINT COMPANY SECRETARIES
Alex Neuling
Shontel Norgate
REGISTERED OFFICE
23 Belmont Avenue
Belmont, WA, Australia, 6104
Telephone: (08) 9363 7800
Facsimile: (08) 9363 7801
Email:
info@lepidico.com
PRINCIPAL PLACE OF BUSINESS
23 Belmont Avenue
Belmont, WA, Australia, 6104
PO Box 330 Belmont WA 6984
Website: www.lepidico.com
COUNTRY OF INCORPORATION
Australia
AUDITORS
Moore Australia Audit (WA)
Level 15, Exchange Tower
2 The Esplanade
PERTH WA 6000
Telephone: (08) 9225 5355
(08) 9225 6181
Facsimile:
SHARE REGISTRY
Automic Pty Ltd
Level 2, 267 St Georges Terrace
PERTH WA 6000
GPO Box 5193 Sydney NSW 2001
Telephone:
Email:
1300 288 664
hello@automicgroup.com.au
HOME EXCHANGE
Australian Securities Exchange Limited
Central Park
152 - 158 St Georges Terrace
PERTH WA 6000
ASX CODE: LPD, LPDOB, LPDOC, LPDOD
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www.lepidico.com