Lake Resources NL (ASX:LKE, OTCQB:LLKKF) is increasing the future production base case for its flagship Kachi Lithium Brine Project to 50,000 tonnes per year of lithium carbonate equivalent (LCE) for its definitive feasibility study (DFS).
Planned production of 'clean lithium' from the Argentine project will increase from the former estimate of 25,500 tonnes per year to 50,000 tonnes per year of lithium carbonate.
The expanded base case is underpinned by an anticipated increased resource estimate from drilling results.
Tailwinds for ESG approach
Factors such as increased demand, promising financing, supportive host-country taxation and investment policies and confidence from Lake’s technology partner Lilac Solutions have all propelled the company’s decision.
The company is emboldened by the increasing demand by prospective offtake partners for a secure supply chain of environmentally friendly high purity lithium carbonate.
“Given the increasing demand and the significant lithium supply gap, Lake is focused on delivering high purity lithium carbonate at scale with meaningful ESG benefits,” managing director Steve Promnitz said.
The company also has advice from technology partner Lilac Solutions that its modular direct lithium extraction technology is scalable and cost-effective.
"Lake’s technology partner, Lilac Solutions, is focused on advancing the Kachi Project at this larger scale,” said Promnitz.
Sympathetic markets
There is also a strong finance case to be made, following indicative support to fund the project by Export Credit Agencies and the international bank panel.
The UK and Canada Export Credit Agencies have already indicated a willingness to project debt finance around 70 per cent of the project’s capital requirements.
“Lake has received indicative financial support for an increase in the size of the Kachi project from the Export Credit Agencies of the UK and Canada and the numerous international ECA-supported banks," Promnitz continued.
Host government policies
Also providing momentum for the project is the hosting Argentine Government, which has recently announced supportive investment policies in the form of a process to lower export taxes as part of the Strategic Plan for Mining Development.
Lake’s chair Stu Crow said the independence of Lake Resources and the Kachi project added to the strategic appeal of the offtake.
“We are well-placed, given quality resource, leading technology and key finance partnerships, to ensure an optimal set of offtake agreements that align with these expansion plans and create maximum value for our key stakeholders.”
Lake's market cap is approximately A$1.19 billion while shares were as much as 5.8% higher to A$1.005 with more than 18 million changing hands.