Lake Resources NL (ASX:LKE) (OTCMKTS:LLKKF) is accelerating exploration and expansion plans across its broader project portfolio in Argentina as the global lithium supply-demand deficit continues to grow.
These include its Cauchari, Olaroz and Paso brine projects as well as the flagship Kachi Project.
The move follows the recent boost to the Kachi Project, which has seen NPV upgraded to US$1.6 billion based on 25,500 tonnes per annum of high purity lithium production suitable for battery and cathode makers with an assessment underway to expand planned production further.
PFS work for Cauchari
Some 50,000 litres of lithium brine samples will be sent from Lake’s Cauchari Project for testing by groups specialising in direct lithium extraction and the conversion of concentrates to lithium hydroxide.
This will be followed by a scoping study to expand future production, with Lake planning to begin pre-feasibility study work at Cauchari, including environmental impact studies and drilling for a resource statement, later in 2021.
Demand set to "overwhelm current supply”
Managing director Steve Promnitz said: “The scale of market demand for a high purity, sustainably produced product is set to overwhelm current supply, as evidenced by the moves by automakers such as Volkswagen and others.
“Lake continues to engage with a range of market participants, including large companies seeking to test Cauchari and other brines using their own extraction processes, including converting concentrates into lithium hydroxides and other products.
“With a growing supply deficit projected from 2024, Lake sees the need for even greater lithium production and therefore will advance development plans on our other brine projects based on the same production method.
“Significantly, should we reach our target, Lake would become a globally significant producer with relevant scale and high-quality products, at exactly the right time for the accelerating EV and battery storage revolution.”
High-grade Cauchari zones
Lake previously confirmed multiple high-grade lithium brines zones over a 506-metre interval from 102 metres in drilling in 2019 at the Cauchari Project.
This drilling confirmed similar grades and lithium brines extending into Lake’s properties from the adjoining Ganfeng/Lithium Americas JV production development at Cauchari.
The higher-grade results averaged 493 mg/L lithium over 343 metres from 117 metres, up to 540 mg/L, with a Li/Mg ratio of 2.9.
Lake will also test additional brines from Olaroz and Paso projects to meet its objective of producing high purity, sustainable lithium from a number of its 100%-owned projects.
Future drilling planned
Lake holds mining leases over 47,000 hectares over three projects in Jujuy Province in northwest Argentina, including the 100%-owned Cauchari, Olaroz and Paso projects.
At Olaroz, which is north of Cauchari, Lake’s leases extend over 30 kilometres east and north of the adjoining Orocobre’s Olaroz lithium production leases.
Drilling is anticipated when all planned holes are approved.