Lake Resources CEO Stephen Promnitz: Drilling Could Double or Triple the Kachi Resource

Lake Resources (ASX:LKE) CEO Stephen Promnitz and Director Nick Lindsay joined the Investing News Network at the 2020 Prospectors & Developers Association of Canada conference to discuss the company’s flagship lithium project located in Argentina. 

As Lake Resources continues to explore the property, CEO Stephen Promnitz believes there is potential to continue to expand the resource at Kachi. “We did a series of drill holes on a virgin project and defined a new resource. Our lease pretty much controls the entire basin. There’s enough in what we call the initial and indicated category now to run an operation for 20 to 25 years. But we know that if we just did the same amount of drilling another 15 to 20 holes, we could easily double or triple the size of the resource,” he said.

“The good thing is it’s just water. The sort of water you’ll get in one hole will be pretty much the same as what you see two or three kilometers away in another hole. It’s not that hard to multiply. The idea is to get to a certain size and decide how to develop this both economically and practically.”

Instead of using brine ponds or traditional hard rock lithium mining, Lake Resources is working to deploy a lithium extraction process called ion exchange that has the capability of separating the lithium from the brine. “Ion exchange uses little beads and these beads are made up of an organic chemical that is highly reactive. The chemical has a proton, hydrogen, and in this solution, lithium is favored over the protons so the lithium attaches. It releases a proton and the beads are filtered out. They are then washed with a strong acid to recover the lithium into an acidic solution and the beads are recycled,” said Director Nick Lindsay. “There are no chemicals used in the actual ion exchange process. It’s a physical attach and detaching process. It’s highly-selective for lithium. All the impurities are left in the brine because we’re not adding any reagents.”

Lake Resources has recently partnered with Lilac Solutions in order to continue to develop the ion exchange process. The company has received the attention and funding of Breakthrough Energy Ventures, an investment firm led by Bill Gates. According to Promnitz, investors and companies in the industry can be hesitant to back new technologies, however, the backing of Gates and the Lilac Pilot Plant are helping to break down the barriers in order to demonstrate the technology is effective. “When you’re doing something new, you’ve got to demonstrate that it works. That’s why we have a pilot plant operating at the moment in California,” said Promnitz. “If you get the richest man on the planet to say it’s a good idea, then suddenly people see it too.”

In addition to its partnership with Lilac Solutions, Lake Resources is working with Hatch to develop a pre-feasibility study on the Kachi project, which Promnitz believes will allow the company to move forward efficiently. “The great part about working with them is that they put that substance behind the study. As you go into the full feasibility study, you don’t have to go and reinvent the wheel. Essentially, you’re optimizing what you already have,” he said.

In order to attract investors, Promnitz believes Lake Resources will need to continue to prove both the efficacy of the ion exchange process and its efficacy at scale. “We need to show that this technology doesn’t just work in pilot scale, but works at a full scale,” he said. Once the company has proven the ion exchange technology at scale, Lake Resources intends to move forward with funding and the full development of the project. “We’re putting together financing for the next two or three years as we complete our full feasibility study, environmental study and community discussions to get it fully permitted,” said Promnitz.

According to Lindsay, the pilot plant stage is expected to involve the production of a number of different lithium products to test the market. “We’ll be producing different products like lithium carbonate and lithium sulfate, which is the precursor to lithium hydroxide. We’ll be sending them out to different customers to see what the response is and that will guide our decision,” he said. “The technology is flexible enough to for us to do that, we’re not committed to anything at the moment. As a base case, we’re looking at lithium carbonate because it’s the one that’s best understood and we have the best numbers for it.”

Moving forward, Lake Resources intends to work towards production at Kachi themselves rather than vending the project out to a major. “We’re trying to find a more efficient way of producing lithium that has a smaller environmental footprint.,” said Promnitz.

For a more comprehensive update from Lake Resources CEO Stephen Promnitz and Director Nick Lindsay watch the full video above. 

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