Lithium

Lake Resources shares surge as long-awaited demo plant arrives on-site

Mon 19 Sep 22, 10:43am (AEST)
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Key Points

  • Lake Resources shares fell -28% last week amid a dispute with its technology partner
  • The demo plant has missed several delivery dates outlined in previous company presentations
  • The demo plant is expected to begin pumping lithium brines in the first week of October

Lake Resources (ASX: LKE) and its technology partner Lilac Solutions has finally commenced dry commissioning of the long-awaited demo plant at the Kachi Lithium Project in Argentina.

Subject to the completion of dry commissioning, Lake Resources expects to begin wet commissioning of the plant on Thursday, September 2022. Which will then lead into the on-site processing of Kachi brines in the first week of October.

The test program will run the demo plant for 1,000 hours to produce 2,000 litres of lithium concentrate for conversion into lithium carbonate. The final lithium product will then be qualified by a tier 1 battery maker to validate product specifications.

Overpromise and underdeliver

Back in February 2021, Lake expected the demo plant to be delivered onsite and produce samples of offtake all in the same year.

A November 2021 presentation then pushed the timeline back, with the plant to come onsite in the first quarter of 2022.

A more recent presentation in April said the demo plant had finally been dispatched and expected to produce first samples in the second quarter of 2022.

At least its finally made it.

The Lilac dispute

Lake said it will continue to update the market on both the Kachi project and the ongoing dispute with Lilac.

In summary, Lilac is expected to earn up to a 25% stake in the Kachi project, based on the achievement of certain milestones by an agreed date.

The milestones include:

  • Completing at least 1,000 hours of operations of the Lilac Pilot Unit onsite

  • Producing a lithium carbonate feed totaling at least 2,500 kg of lithium carbonate equivalents

Lake said the milestones must be achieved by 30 September 2022 while Lilac believed it had until 30 November 2022.

With the demo plant only just arriving and expected to begin producing Kachi brines in the first week of October, Lilac will miss the milestone deadline under Lake's date of 30 September.

1,000 hours of operations (assuming the plant runs for 24 hours a day) is equal to 42 days. Even if the milestones were running along Lilac's timeline, it would be a stretch to complete the 1,000 hours and then convert the lithium concentrate to lithium carbonates.

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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