Lake Resources NL (ASX:LKE, OTCQB:LLKKF)'s drilling program at Kachi Lithium Project in Argentina continues to reinforce the company’s optimism - derived from previous assay results - that lithium brines extend well beyond the limits of the current resource.
The drilling supports the potential doubling of future production at the flagship project, targeting up to 50,000 tonnes per annum lithium carbonate equivalent (LCE).
LKE plans to expand its drilling footprint next year, bringing in additional rotary drill rigs to upgrade and expand the resource. These activities will support the completion of a definitive feasibility study (DFS) and a final investment decision (FID) on the Kachi Project.
“Benchmark Mineral Intelligence has noted that lithium demand is growing at three times the speed of new supply,” Lake’s managing director Steve Promnitz said.
“This environmentally sustainable project is coming to market at just the right time, with equity and debt support and an expanding list of potential off-takers.”
Scale and potential
A recent site visit by a project finance due diligence team from the Export Credit Agency (ECA) confirmed the size and promise of the Kachi project.
Lake executives were recently in London and received support and encouragement for the project in recent discussions with ECA and ECA-supported international banks.
This scale and potential can be seen in a new 3D fly-through of Lake’s Kachi Lithium Brine Project available on the Lake website. The project covers 74,000 hectares (183,000 acres) of leases, in a region subject to intensifying activity and investment.
Drilling to date has focused on the southwest corner of the known salt lake and surrounds. The recent resource statement released to the ASX pointed to considerable upside beyond the large total resource of 4.4 million tonnes LCE (indicated 1.0 million tonnes, inferred 3.4 million tonnes).
Less than 20% of the current total resource is allocated to the planned 25,500 tonnes per annum lithium carbonate production over 25 years.
New infill drilling will assist the conversion of resources to a higher category with increased data.
Current drilling efforts
A 1200m, four-well diamond drill program is underway and may be extended, pending initial results.
A water well rig has completed three wells exploring process water options. A third rig has been completing pre-collar holes and pumping brine samples. A further rig is planned for production well drilling in coming months in 2022.
The company plans to update the market with results and a drill program plan early in the new year.
“Argentina continues to be one of the few locations where lithium production can increase to assist the significant supply gap to increasing demand,” Promnitz said.
“Lake is one of only a few companies that can transform into a globally significant producer with a number of projects that can deliver high purity lithium carbonate at scale with meaningful ESG benefits."
“Lake, along with our technology partner Lilac Solutions, continue to progress towards the final investment decision and the start of construction of the flagship Kachi Lithium Brine Project next year.”