Lake Resources NL (ASX:LKE) announced today new definitive results from detailed packer sampling from its 100% owned Cauchari Lithium Brine Project that compare favourably to the world-class neighbouring project moving to production next year, reaffirming the Company’s confidence in Cauchari’s potential in the heart of the Lithium Triangle.
Lake Resources NL (ASX:LKE) announced today new definitive results from detailed packer sampling from its 100% owned Cauchari Lithium Brine Project that compare favourably to the world-class neighbouring project moving to production next year, reaffirming the Company’s confidence in Cauchari’s potential in the heart of the Lithium Triangle. Please see the table below showing the range of lithium grades and intervals.
The higher results of 340m averaging* 505 mg/L lithium, and up to 540 mg/L lithium, with a Li/Mg ratio of 2.9, compare favourably to similar results obtained from the adjoining major project advancing towards production. The Ganfeng/Lithium Americas (NYSE:LAC) Cauchari project has a Measured and Indicated Resource of 17.9Mt LCE at 581 mg/L lithium (Apr 2019 NI 43-101) (1 ). The nearest drillhole of the Advantage Lithium (AAL)/ Orocobre joint venture averaged 198m at 450 mg/L lithium, within a Measured and Indicated Resource of 4.8Mt LCE at 476 mg/L lithium (Apr 2019 NI 43-101) (2 ). These neighbouring results are not LKE’s results and no inference is made as to the potential of Lake’s project. The grades are shown to provide a relevant comparison as Lake’s view is that these are similar lithium brines in the same basin.
Major Chinese producer Ganfeng Lithium has invested a combined US$397 million, including debt support, to acquire a 50% stake in its Cauchari project, demonstrating the value of such projects in the Lithium Triangle, home to half the world’s lithium output at the lowest cost.
Lake’s definitive results from detailed sampling at Cauchari, in comparison to earlier preliminary results, vindicate the decision to extend drilling to approximately 600m depth, currently at 540m, following a brief pause at 460 metres depth.
Lake’s Managing Director Steve Promnitz said: “Lake is drilling next door to the largest defined lithium brine resource on the planet and our assay results mirror the grades of this project. These latest results have only further strengthened our recognition of the Cauchari project as a major discovery adding value for shareholders, given the prices paid for investment in nearby projects. In addition, this is now a wider pay zone of lithium brines than at the adjoining project. To use an analogy, we are in the same swimming pool, filled with sand, clay and lithium brines, and we still have more to come.”
“While Cauchari is a potential company-maker for Lake, we are determined to fully exploit the value of our project pipeline. Following Cauchari, we are planning a new drilling program at our 100% owned Olaroz Lithium Brine Project, to test the same basin that also hosts current production. This has potential to be another standalone project to add to our exciting discovery at Cauchari and confirmed deposit at Kachi.
“Analysts continue to upgrade their forecasts for the lithium market, with Benchmark Mineral Intelligence and Wood Mackenzie both pointing to a major supply deficit by the early-to-mid 2020s and Macquarie analysts turning bullish as a result of automakers’ expansion plans for electric vehicles.
Table 1: Summary lithium results and intervals from the drillhole at Cauchari .
(*) Arithmetic average of values across interval without consideration of total interval. Final total interval values may change. (*1): Cauchari-Olaroz Mineral Resource Statement of Lithium Americas/Ganfeng joint venture in a NI 43-101 Technical Report filed 1 April 2019 on the TSX-V, prepared by Ernest Burga (P.Eng), David Burga (P.Geo), Wayne Genck (P.Eng) and Daniel Weber (P.G., RM-SME) each of whom is a qualified person for the purposes of NI 43-101, available publicly on SEDAR.
(*2): Cauchari Mineral Resource Statement of Advantage Lithium/Orocobre joint venture in a NI 43-101 Technical Report filed 19 April 2019 on the TSX-V and ASX, prepared by Fritz Reidel (CPG), who is a qualified person for the purposes of NI 43-101, available publicly on SEDAR.
Figure 1: Updated section of drillhole at Cauchari with the 340+m brine zone, results and geological comments.
Figure 2,3: Location of LKE’s drill operations at Cauchari in relation to Advantage Lithium/Orocobre & Gangfeng/Lithium Americas leases. (Note: The marked boundaries are indicative only. Please refer to the detailed map).
Figure 4: Cauchari Lithium Project, with adjoining Ganfeng / Lithium Americas combined resource and Orocobre / Advantage Lithium combined resource with (Orocobre announcements 7/11/2017, 4/12/2017, 18/01/2018, 15/03/19; Advantage Lithium announcement 5/3/2018, 10/01/2019, 7/03/19, 24/04/19). (Third Party Resource details summarised in LKE’s ASX announcement dated 6 Sept 2018)
Competent Person’s Statement – Kachi Lithium Brine Project
The information contained in this ASX release relating to Exploration Results has been compiled by Mr Andrew Fulton. Mr Fulton is a Hydrogeologist and a Member of the Australian Institute of Geoscientists and the Association of Hydrogeologists. Mr Fulton has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a competent person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Andrew Fulton is an employee of Groundwater Exploration Services Pty Ltd and an independent consultant to Lake Resources NL. Mr Fulton consents to the inclusion in this announcement of this information in the form and context in which it appears.
About Lake Resources NL (ASX:LKE)
Lake Resources NL (ASX:LKE, Lake) is a lithium exploration and development company focused on developing its three lithium brine projects and hard rock project in Argentina, all owned 100%. The leases are in a prime location among the lithium sector’s largest players within the Lithium Triangle, where half of the world’s lithium is produced. Lake holds one of the largest lithium tenement packages in Argentina (~200,000Ha) secured in 2016 prior to a significant ‘rush’ by major companies. The large holdings provide the potential to provide consistent security of supply, scalable as required, which is demanded by battery makers and electric vehicle manufacturers.
The Kachi project covers 69,000 ha over a salt lake south of FMC’s lithium operation and near Albemarle’s Antofalla project in Catamarca Province. Drilling at Kachi has confirmed a large lithium brine bearing basin over 20km long, 15km wide and 400m to 800m deep. Drilling over Kachi (currently 16 drill holes, 3100m) has produced a maiden indicated and inferred resource of 4.4 Mt LCE (Indicated 1.0Mt and Inferred 3.4Mt) (refer ASX announcement 27 November 2018).
A direct extraction technique is being tested in partnership with Lilac Solutions, which has shown 80-90% recoveries and lithium brine concentrations in excess of 25000 mg/L lithium. Phase 1 Engineering Study results have shown operating costs forecast at US$2600/t LCE in the lowest cost quartile (refer ASX announcement 10 December 2018). This process is will be trialed on site with a pilot plant in tandem with conventional methods as part of the PFS underway. Discussions are advanced with a number of downstream entities, mainly battery makers, to jointly develop the project.
The Olaroz-Cauchari and Paso brine projects are located adjacent to major world class brine projects either in production or being developed in the highly prospective Jujuy Province. The Olaroz-Cauchari project is located in the same basin as Orocobre’s Olaroz lithium production and adjoins Ganfeng Lithium/Lithium Americas Cauchari project, with high grade lithium (600 mg/L) with high flow rates drilled immediately across the lease boundary.
The Cauchari project has shown high grades and high flow rates from a series of horizons over 288 metres, with up to 538 mg/L lithium, similar to lithium brine horizons announced from adjoining pre-production areas under development. Results provide confirmation of the continuity of lithium bearing horizons from adjoining world-class major projects (refer ASX announcements 28 May, 12 June 2019). The Olaroz project is planned to be drilled for the first time in LKE’s 100% owned Olaroz leases as soon as drilling is completed at Cauchari.
Significant corporate transactions continue in adjacent leases with development of Ganfeng Lithium/Lithium Americas Cauchari project with Ganfeng announcing a US$237 million for 37% of the Cauchari project previously held by SQM, followed by a further US$160 million to increase Ganfeng’s equity position to 50% on 1 April 2019, together with a resource that had doubled to be the largest on the planet. Ganfeng then announced a 10 year lithium supply agreement with Volkswagen on 5 April 2019. Nearby projects of Lithium X were acquired via a takeover offer of C$265 million completed March 2018. The northern half of Galaxy’s Sal de Vida resource was purchased for US$280 million by POSCO in June-Dec 2018. LSC Lithium was acquired in Jan-Mar 2019 for C$111 million by a mid-tier oil & gas company with a resource size half of Kachi. These transactions imply an acquisition cost of US$55-110 million per 1 million tonnes of lithium carbonate equivalent (LCE) in resources.
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