Lepidico wants to extend the Karibib project’s operating life to over 20 years by targeting a range of metals, including lithium, caesium, rubidium, tantalum, gold, copper and tungsten at its Namibian tenements.
The company wants to expand the resource base to support the phase 2 scoping study and evaluate the Karibib licences for potential gold.
In the quarter ending March 31, 2024, Lepidico concentrated on exploration activities primarily limited to regional and reconnaissance work within ML204 and EPL5349 due to blocked road access to a priority drill target.
During the quarter, Lepidico Chemicals Namibia filed a motion with the High Court against a local property owner for a locked gate that denied access to a public road.
The situation is expected to be resolved in the June quarter, allowing ground access to this LCT pegmatite target with visible lepidolite in the outcrop.
Due to the weak lithium price environment, Lepidico undertook minimal marketing activities for the existing beneficiated stockpiles at the Karibib Lithium Project.
The company says the significant interest received during the prior reporting period suggests that further price improvement should allow supply discussions to resume.
As a result, Lepidico says the alternative is to prioritise the concentrator and sell lithium mica concentrate to third parties before committing to the downstream chemical plant, which continues to be considered by select prospective partners.
Four alternative implementation options have been identified and evaluated for the Karibib mine and concentrator over the last two quarters. These include:
- Engineering, Procurement, and Construction (EPC) under a Lump-Sum Turn-Key (LSTK) contract model.
- Mobile crusher.
- Prefabricated, non-process buildings.
- Contract mining.
An option for a third-party renewables-based power supply to Rubicon for 30% of the power need, bundled with the 29-km grid connection power line and financed off-balance sheet, remains a work in progress.
Lepidico says it is still considering the US Government’s Development Finance Corporation (DFC) as the lead lender for the Karibib development, with further constructive discussion during the quarter.
However, other development finance institutions and commercial lenders also participate in debt financing.
The DFC has advanced its due diligence to the point where partners in the Abu Dhabi chemical plant must be identified to undertake associated legal due diligence.
Due to the integrated nature of the development, DFC’s due diligence includes the chemical plant despite its lending mandate being limited to Namibia, a developing economy.
Select commercial lenders for Karibib and the KEZAD chemical plant are also positioned to resume due diligence once crucial project stakeholders are identified.
The total capital expenditure under the Karibib options study has fallen to less than US$50 million with an increased contingency of 20% on owner’s costs versus US$63 million before sunk costs in the 2022 control estimate.
According to Lepidico, feedback from commercial lenders suggests that an EPC implementation for smaller-scale developments such as Karibib is desirable under an LSTK model.
A mobile crusher will provide considerable flexibility, as multiple open pits and remote stockpiles will be introduced into the ore mining schedule. It will also allow conventional road trucks to haul ore from remote sources to the Rubicon.
The company also says contract mining will provide future flexibility, including adopting more cost-effective and sustainable (electric) mobile fleet options as they become available at the necessary scale and competitive price point.
