Lake Resources (ASX:LKE)
Lake Resources (LKE AU) has announced strong results from the laboratory testwork in conjunction with Lilac Solutions who have been testing brine samples from the Kachi project in Argentina. The testwork yielded recoveries of 80-90% in just a few hours compared to traditional brine recoveries of around 50% in months for operations in the Salar de Atacama. Lilac utilises an ion exchange extraction technology and the demonstrated yields effectively mean that 300mg/l Li grades using Lilac’s technology produce the same as 600mg/l Li grades using a traditional evaporation approach.
This is potentially transformative for the economics of Kachi and represents a significant first step in exploring this process route. The announcement is particularly significant given the current scrutiny on the environmental impact of traditional evaporation techniques and the knock-on impacts on forecast supply growth from Chile and the Salar de Atacama in particular. Lilac is now assessing the operating costs for this production technique, which directly produces lithium carbonate and/or hydroxide. Costs will of course fundamentally determine the success of the process; however, these initial results are encouraging and Lilac has guided to a competitive position on the global cost curve.
We reiterate our Speculative Buy recommendation.