Argentina's Lithium Triangle is the house of world’s 40% lowest cost lithium source as well as a place of major corporate activities. This is corroborated by the fact that South Korea's POSCO paid US$280 million for the acquisition of the northern resource of Galaxy Resources (ASX: GXY), i.e. Sal de Vida lithium brine project, and China's Ganfeng paid US$413 million for 50% Cauchari project in JV with Lithium Americas (NYSE: LAC).
Interestingly, both the projects mentioned above are located near to the projects of Lake Resources NL (ASX: LKE). Sal de Vida lithium project is located approximately 110 km north of the Lake's Kachi Project, while Ganfeng Cauchari is 500 metres from Lake's successfully drilled Cauchari project.
Australian listed lithium explorer and developer, Lake Resources owns 100% of Kachi Lithium Brine Project as well as Cauchari and Olaroz Lithium Brine Projects along with one hard rock project.
Let us now quickly glance through the Lake’s rich project portfolio.
Kachi Lithium Project – Low Cost and High Purity Product
Kachi Lithium Project is a flagship project of the Company having ~70,000 hectares of the lease in Catamarca Province, Argentina demonstrating maiden JORC resource of 4.4 million tonnes lithium carbonate (LCE). LKE is moving towards pre-production phase due in March 2020, to produce a large volume sample of lithium carbonate for off-takers in Asia mostly perhaps South Korea, Japan, and China to start qualification testing.
Also, Kachi’s pre-feasibility study (PFS) is close to the completion entailing detail study, including the information from the direct extraction ion-exchange process plant to assess the viability of 25,000tpa LCE production plant. The plant is likely to start in a phased manner with 10,000tpa capacity by 2022/2023, positioning itself in the lower quartile of the cost curve.
Direct Extraction Ion-Exchange Process
Kachi project uses direct extraction ion-exchange process to recover lithium from brine, a disruptive game changer technology in the Industry. The tune of potential can be assessed by the fact that the Lilac Solution, Lake’s technology partner, is backed by the Bill Gates-Led fund Breakthrough Energy.
Lilac Solution Backed by Breakthrough Energy Funding! Must Read: Lake Resources’ Technology Partner Lilac Backed by Bill Gates-Led Fund Worth US$20 million
Lilac’s direct extraction technology is sustainable, less environment pollutant with far lower water requirement than the traditional methods of lithium extraction. Direct extraction ion-exchange process permits the returns of brine to the aquifer without changing chemistry after extraction of lithium, while traditionally evaporation pond was used.
Also, it is pertinent to mention that the recovery is high as 80%-90% in the Lilac technology in just a few hours. In contrast, the traditional method requires 9 to 18 months to deliver recovery of ~50%.
The capability to transfer the brine back to the aquifer makes the process significantly faster, cheaper, and more scalable than existing technology and thus may charge an additional premium on LKE’s product.
Cauchari and Olaroz Lithium Brine Projects
Lake Resources holds mining leases of ~45,000 hectares in two areas in Jujuy Province in Northwest (NW) Argentina. The first drilling at Cauchari Lithium Brine project confirmed the presence of multiple high-grade lithium brines. The drilling at the project site reports similar grade and lithium brine as the adjoining Ganfeng and Lithium Americas Cauchari project.
The rapid progression of the Lithium Americas Cauchari project, which is expected to produce by late 2020, instils enormous confidence in the Cauchari project commercialisation.
Whereas, Olaroz lithium project is located north of Cauchari Project. Interestingly Lake's lease of the project is extended to the adjoining Olaroz lithium production leases of Orocobre Limited (ASX: ORE) which is high quality, low-cost and long-life resource asset. The drilling at the site is anticipated after all holes are approved.
Hard Rock Project – Pegmatite Project
The Company has a lease of ~80,000 hectares of outcropping pegmatites with lithium potential within Catamarca Province in NW Argentina. It is operated through its wholly-owned local subsidiary Petra Energy SA.
The project is at an early stage exploration phase. It extends over a 150 km long belt hosting substantial lithium mineralisation as spodumene, with prior history of small scale production. The lithium pegmatites are part of a belt of pegmatite swarms outcropping at relatively low altitudes (300-1500m) offering good year-round access.
The Company is presently focusing on fundraising to commercialise the Kachi Project.
Lake Resources – Funding Arrangement
The funding plan is proceeding smoothly and recently; the Company has increased the fund amount from ~A$3.5 million to ~A$6.4 million through both Private Placements (PP) and Share Purchase Plan (SPP) at the back of overwhelming response of the investors.
The SPP plan is upsized from A$1.5 million to A$2.5 million before costs and PP from A$1.5 million to A$3.9 million before cost.
The increment in the SPP and PP due to oversubscription is the testimony of the positivity of the Kachi project around the investors.
Interested in Capital Raising Program? Do Read: Lake Upsized the Share Purchase Plan and Placement Post Strong Shareholder Demand
The funds raised will be used to construct and develop direct extraction pilot plant along with its transportation at the project site for operations. The amount is also likely to be used for the optimisation of PFS of Kachi project and conduction of qualification testing for the downstream participants.
LKE’s stock last traded at A$0.039 on 3 March 2020 and has a market cap of ~A$24.4 million.
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