Tag: Lake Resources NL

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).

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.

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.