- Lake Resources has been working closely with technology partner Lilac Solutions in California for the processing of lithium brines from its Kachi project.
- Work at Lilac’s processing plant was initially delayed due to restrictions placed to tackle the spread of COVID-19.
- Lilac, as well as related service providers, are all set now to resume their operations from the current week, with the relaxation in restrictions and removal of curfews.
- Resumption in operations comes at a time when LKE can draw benefits of increasing price movements for high purity lithium products.
Lithium exploration and development company focused on producing sustainable and high purity lithium, Lake Resources NL (ASX:LKE) has been actively engaged in processing of brines at the processing plant of its technology partner Lilac Solutions in California.
LKE’s technology partner is expected to resume its operations for the processing of lithium brines obtained from Kachi project at its direct extraction pilot plant module from the current week, as the ‘shelter in place’ restrictions and curfews have now been relaxed.
Post the significant update, LKE stock soared by 2.5%, closing the day’s trade at $0.041 on 9 June 2020.
LKE had transported a total of 40,000 litres of Kachi brines to the pilot plant of Lilac Solutions in California by the month of April 2020. Initially, LKE had transported 20,000 litres of brine samples to the pilot plant, processing of which had already been progressing but was delayed slightly under initial COVID-19 guidelines.
Moreover, additional 20,000 litres of brine samples were transported, expected to ensure sufficient samples to meet the growing demand from potential off-takers of LKE. Besides, there has been an increase in the interest of battery makers, EV manufacturers, and other stakeholders in the supply chain in the direct extraction process for the Kachi project.
More Can be Read At: Lake Resources Sends Additional Kachi Lithium Brine Samples to Lilac’s Pilot Plant
Currently, along with the conclusion of commissioning, 20,000 litres of brines received from Lake’s Kachi Lithium Brine Project is being processed through the pilot plant modules at the new advanced facility and warehouse.
As a result of the loosening of restrictions, other service providers that are crucial to Lilac’s operations have also resumed their activities.
Interestingly, the reopening of operations of LKE’s technology partner coincides with growing interest in sustainable and consistent high purity lithium products and with increasing price momentum for high purity lithium products, given a lack of battery-grade supply for EV makers.
The nature of Lilac’s direct extraction process to be cost-competitive, sustainable and scalable were highlighted by the recent Kachi Pre-Feasibility Study (PFS) by LKE.
More about PFS Can Be Read Here: Lake Resources Concludes Kachi Project’s PFS, Robust Results Further Strengthen Project Prospects
LKE Riding High on Buoyant Market Opportunity
Multi-billion-dollar subsidies and investments announced by the European nations, including France, Germany, the Netherlands and the United Kingdom offers several advantages to lithium explorers and developers like LKE. In addition to this, boosts in China (extension in state subsidies and tax breaks for New Energy Vehicles) and South Korea (US$110 billion New Green Deal, including significant investment in renewable energy) have been announced to support the EV industry as part of post-pandemic recovery plans.
Considering paradigm shift towards heightened green environment awareness and supported by recent investment initiatives, Lake Resources is said to be well-placed to draw benefits from the market opportunity in batteries and the electric vehicles that power and drive the energy revolution, as evident by the following:
- High Purity Lithium Carbonate samples (99.9%) from the pilot plant using a direct extraction process with very low impurities are capable of achieving premium pricing.
- As bigger samples are anticipated to be produced from Q2 2020, engagement with off-takers acceleratedto initiate qualification testing and contribute towards aiding in financing.
- The Pre-Feasibility Study of the Kachi Project has shown estimated costs of production at the lower end of the cost curve like existing producers of lithium brine. Moreover, the resource at Kachi project is seen to be significant enough for long term production and has the potential to be scaled to a much greater project.
- As demanded by the bigger Electric Vehicle manufacturers and a growing number of battery/cathode manufacturers to show the quality and attribution of battery materials for carbon footprint reporting and ESG/sustainability, LKE has sustainable as well as scalable future lithium production. Upon removal of the lithium using ion-exchange beads without affecting the chemistry, the direct extraction process reinjects brine, meaning significantly less footprint and minimal water usage as evaporation ponds are not used.
There has been increased awareness among the general public during COVID-19 regarding environmental protection, with reduced pollution levels due to shutdowns and visible improvements in the environment across the globe. This is likely to sweeten the deal for electric mobility/electric vehicles manufacturers in the near term by making the public positively predisposed towards the adoption of environment-friendly modes of transportation.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.