Lake Resources NL (ASX:LKE, OTCQB:LLKKF) has appointed two leading project finance institutions, Citi and J.P. Morgan, as joint coordinators of the proposed debt finance package of its flagship Kachi Lithium Project in Argentina.
The two investment banks will work together on the debt financing package for Lake’s 50,000 tonnes per annum (tpa) lithium carbonate equivalent (LCE) Kachi Lithium Project, with the ongoing support of its advisors GKB Ventures Ltd and SD Capital Advisory Limited.
The proposed debt financing is aimed at obtaining export credit agency guarantees from UK Export Finance (UKEF) to cover approximately 70% of the total Kachi Project funding requirement, subject to standard project finance conditions.
The appointment of the investment banks advances the development of the Kachi Project towards final credit approval and is part of the overall strategy set in place by the company's advisors.
“Clean energy future”
Lake Resources managing director Steve Promnitz said: “We are pleased to partner with Citi and J.P. Morgan, who support Lake’s commitment to sustainable extraction, and minimising our environmental footprint.
“Together, we are contributing to a clean energy future that aligns with investors, debt providers, and off-takers requirements that new lithium projects adhere to strict ESG standards.”
Strongest combination
Citi and J.P. Morgan were deemed the strongest combination to coordinate the proposed financing package for this particular project.
The appointment was undertaken after a tender panel issued by Lake’s advisor, GKB Ventures Ltd, to more than 10 international banks and an extensive review and selection process which envisaged export agency guarantees for the proposed debt financing.
The results of the tender panel implied that indicative bank appetite for the Kachi Lithium Project was more than five times the required amount, reflecting the strong interest by international banks for this project and the indicative support of the Export Credit Agencies (ECA).
Next steps
The investment banks will coordinate workstreams between lenders and third-party analysis on major project milestones, including, among others, due diligence, the forthcoming JORC-compliant definitive feasibility study (DFS) and an Environmental and Social Impact Assessment (ESIA).
The amount of the proposed debt financing will be governed, among other things, by the outcomes of the DFS currently underway and the export credit agencies' assessments of all studies that the company has on foot.
It is also planned to have Export Development of Canada, (EDC, Canada’s Export Credit Agency) participate alongside UKEF as the lead ECA, under a common terms agreement.