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Tag: Lake Resources NL

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BMI and Red Cloud’s Lithium-ion Battery Supply Chain Conference – Conference Recap

Yesterday, Benchmark Mineral Intelligence (BMI) and Red Cloud hosted the Lithium-ion Battery Supply Chain Conference, which featured 13 presenting lithium and battery metal companies and four keynote speakers: Andy Miller and Daisy Jennings-Gray from Benchmark Intelligence, Sam Pigott from Ganfeng Lithium, and Iola Hughes from Rho Motion. The conference had close to 300 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the event.

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Lake Resources NL (ASX:LKE) – Ford Motor Company Signs Non-binding MOU For LCE Off-take

Lake Resources signed a non-binding Memorandum of Understanding (MOU) with Ford Motor Company (NYSE:F, Not Rated) for an offtake of 25ktpa LCE from its flagship, Kachi Li brine project in Argentina. In conjunction with the recent off-take and strategic collaboration with Hanwa of Japan, Lake has now covered the sale of 100% of its proposed production from Kachi. We view this potential offtake agreement for the other half of Kachi’s planned production very positively, as it even further de-risks the project, and this time the deal associates Lake Resources with Ford, one of the world’s most recognizable brands. With offtake negotiations in progress with both Ford and Hanwa, debt funding in place for 70% of Capex, pilot plant construction underway and a recent increase to 50ktpa LCE in planned production, we expect the upcoming DFS to demonstrate stellar economics for Kachi. We also see room for further valuation improvement. Beyond these attributes, we signal that there is considerable potential for us to improve our forecasts as we continue to use US$15k/t for our LCE price assumption. Given that demand for LCE is pending, some similar brine producers are selling LCE at US$35k/t, global averages are in the high US$60k/t range and Chinese prices approach US$80k/t, we see potential to increase revenue by multiples of current forecasts. We await further economic studies to help further define costs.

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Red Cloud | redcloudfs.com

Lake Resources NL (ASX:LKE) – Non-binding MOU Signed for 50% of Kachi Production

Lake Resources has signed a non-binding Memorandum of Understanding (MOU) with Japanese trader, Hanwa Co. Ltd. (TYO:8078, Not Rated) for an offtake of 25ktpa LCE from its flagship, Kachi Li brine project in Argentina, amongst other terms. We view this potential offtake agreement for half of Kachi’s planned production very positively as it further de-risks the project and anticipate further offtake agreements in the works for most of the remaining 50%. With offtake negotiations in progress, funding in place for 70% of the capital costs, pilot plant construction underway and a recent increase to 50ktpa LCE production, we expect the upcoming DFS to demonstrate stellar economics for Kachi (Q2/22).

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Red Cloud | redcloudfs.com

Red Cloud’s 2022 Very Pre-PDAC Mining Showcase – Day One Recap

Yesterday, Red Cloud hosted the first day of its three-day 2022 Very Pre-PDAC Mining Showcase, which featured 36 presenting uranium and battery metal companies including our keynote speakers Andrew Leyland, Head of Strategic Advisory at Benchmark Mineral Intelligence and Anna Bryndza, Executive Vice President at UxC, LLC and had over 1,000 participants registered in advance of the event. With this note, we want to provide a quick recap of the highlights from the conference for those who were unable to attend the live event. If you would like to attend Day Two and Three of Red Cloud’s 2022 Very Pre-PDAC Mining Showcase, register here. Replays are available on the Red Cloud website.

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Red Cloud | redcloudfs.com

Lake Resources NL (ASX:LKE) – Kachi Production Expected to Double to 50ktpa LCE in DFS

Lake Resources has increased the planned production at its flagship Kachi project in Argentina from 25.5ktpa to 50ktpa lithium carbonate equivalent (LCE). The upcoming Definitive Feasibility Study (DFS) will use 50ktpa as its base case, and the increased production is expected to be supported by an updated resource estimate. We view this production increase very positively, as the PFS which utilized a 25.5ktpa scenario had already shown robust economics. We anticipate the DFS to demonstrate even stronger economics and are therefore increasing our target price for Lake to A$2.20/sh (was A$1.25/sh).

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Lake Resources NL (ASX:LKE) – New Drilling Program at Li Brine Projects to Help Define Targets

Lake Resources (LKE) announced it is planning a 10-hole drilling program at its 100%-owned Olaroz, Cauchari and Paso Li brine projects in Jujuy, Argentina. The program is currently scheduled for late January 2022. A second drill rig will be used to work alongside the diamond rig to help quantify brines, develop the aquifers and conduct pump tests – many of the items that are required to define a resource estimate and quantify flow rates. We note that passive seismic geophysics are also underway to help define basin boundaries, while detailed EM surveys have the potential to locate brine targets. Furthermore, lithium brines are to be sampled and tested with direct lithium extraction methods, similar to that used at Kachi (read more). We look forward to the potential for positive drill results from these projects. Meanwhile, we believe the market will continue to focus on the development and project financing for Kachi.

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Lake Resources NL (ASX:LKE) – Ongoing Drilling Supports Expansion Potential at Kachi

Lake Resources (LKE) reported that ongoing drilling supports future plans of a massive lithium brine resource, as well as its ability to support a large, long-life, low-cost operation at the 100%-owned Kachi Li brine project in Argentina. Continued drilling with similar results would provide a pathway to doubling future planned production to target 50,000tpa LCE, especially as lithium brines appear to extend well beyond the existing resource limits. This would ultimately assist in the completion of the Definitive Feasibility Study (DFS) and a final investment decision (FID). We note that less than 25% of the current 4.4Mt LCE resource is required for the initial 25,500 tpa LCE operation over a 25-year LOM. LKE has already demonstrated its path to production (due in H2/24) and created a sustainable, high-purity, lithium carbonate product from its 2020 pilot plant. With project financing advancing as planned, focus remains on completing a Definitive Feasibility Study (DFS) and an Environmental and Social Impact Assessment (ESIA) due in Q2/22, ahead of securing offtake partners and commencing construction activities in H2/22.

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