Lithium

Production target at Kachi up two-fold: Lake Resources

Wed 19 Jan 22, 12:48pm (AEST)
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Key Points

  • Lake Resources has received indicative financial support
  • Lithium prices have been on a upward trajectory
  • Further drilling is expected to significantly expand Kachi

Clean lithium developer, Lake Resources (LKE) was up 4.2% in early morning trade after announcing plans to double its production target at the flagship Kachi Lithium Brine Project in Argentina to 50,000 tonnes annually of lithium carbonate equivalent (LCE).

The company plans to use the new production target as the base case for its Definitive Feasibility Study (DFS) and final investment decision for the Kachi Brine Project.

Kachi is located in Argentina’s Catamarca Province at the southern end of the Lithium Triangle, a world-renowned province responsible for 40% of global lithium production.

Further drilling is expected to significantly expand Kachi which is currently understood to host a resource of 4.4Mt of LCE.

Supportive bankers/host countries

Underscoring today’s announcement is increased demand by prospective offtake partners and an anticipated increase in resources from previous drilling results, announced 15 December 2021, and 7 July 2021.

Also underpinning today’s announcement is growing demand for an environmentally friendly high purity lithium carbonate supply chain, supportive financiers, and favourable investment policies from host-country with lower export tax rates.

As an equally attractive overlay, Lithium prices have been on a upward trajectory due to growing demand from EV automakers globally.

Focus on scale

Lake Resources Managing Director Steve Promnitz noted that the company is focused on delivering high purity lithium carbonate at scale with meaningful ESG benefits.

“Lake has received indicative financial support for an increase in the size of the Kachi project from the Export Credit Agencies (ECA’s) of the UK and Canada and the numerous international ECA-supported banks,” said Promnitz.

“Also, Lake’s technology partner, Lilac Solutions, is focused on advancing the Kachi Project at this larger scale.”

Consensus on Lake Resources is Strong Buy.

Based on Morningstar’s fair value of $1.23 (10/08/21), the stock appears undervalued.

LKE graph

 

Lake Resources share price movement over six months

 

 

Written By

Mark Story

Editor

Mark is an investigative financial journalist and editor who started his career working for Marathon Oil in London. He has a degree in politics/economics and a diploma in journalism. Mark has worked on 70-plus newspapers and financial publications across Australia, NZ, the US, and Asia including: The Australian Financial Review, Money Magazine, Australian Property Investor and Finance Asia. Mark is passionate about improving the financial literacy of all Australians through the highest quality content. Email Mark at [email protected].

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