Lake Resources
Overview
The electric vehicle boom is unstoppable. Battery-powered cars could reach a 40 percent increase in global sales and the demand for lithium is expected to double to 1.5 million tonnes by 2027. The bullish outlook could be traced back to lithium-ion battery’s ability to charge faster and store higher power capacity in a lighter package.
Although Australia, Chile and China have long been the world’s top lithium producers for years, Argentina has now emerged at the forefront accounting for 21 percent of the world’s reserves. The country’s lithium mining pipeline consists of two that are currently operational, 13 planned and dozens under consideration.
Lake Resources (ASX: LKE,OTCQB:LLKKF) is a lithium development company focused on producing high-purity, sustainable lithium at a low cost from its five wholly owned lithium brine projects in Argentina. The projects lie within one of the most sizable, wholly owned land packages amongst the largest players within the Lithium Triangle — home to 40 percent of the world's lithium supply.
Lake Resources has five lithium projects in the heart of the Lithium Triangle but is primarily advancing its wholly owned Kachi lithium project, approximately 100 kilometers south of the FMC Lithium (NYSE: LTHM) Hombre Muerto lithium brine production site. The property hosts a 2018 mineral resource estimate of 4.4 million tonnes of contained lithium carbonate equivalent. The report outlines an indicated resource of one million tonnes of lithium carbonate equivalent, and an inferred resource of 3.4 million tonnes lithium carbonate equivalent.
In March 2021, Lake Resources released a pre-feasibility study (PFS) for its Kachi lithium project, which indicated an annual production target of approximately 25,500 tonnes of battery-grade lithium carbonate using Lilac Solutions' direct lithium extraction (DLE) technology. The study was based on Kachi's indicated resource of 1.01 million tonnes lithium carbon equivalent (LCE) at 290 mg/L lithium. The study projects an operating cost of US$4,178 per tonne, totalling approximately US$544 million in total capital expenses.
Lake Resources has partnered with Lilac Solutions to build a direct extraction pilot plant at the Kachi project. Lilac Solutions has developed a proprietary ion-exchange technology for the extraction of lithium from brine resources. It’s capable of achieving high recoveries, at minimal cost, with rapid processing times, all while providing numerous environmental benefits — particularly water preservation. The proposed plant involves strategic partnerships with Ford Motor and Hanwa. Katchi aims to provide the world’s cleanest lithium using its unique procedure.
The modular demonstration plant, designed and built by the engineering team at Lilac Solutions, was dispatched to the Kachi Project in Argentina in March 2022, after which Lilac began operating the demonstration plant for several months to produce lithium chloride (eluate) representing 2.5 tonnes of lithium carbonate.
As of December 31, 2022, Lilac has successfully operated the demonstration plant for 1,000 consecutive hours and produced 40,000 litres of lithium chloride eluate, meeting all key testing milestones outlined in Lake Resources' agreement with Lilac. The lithium chloride eluate produced by Lilac will be converted to lithium carbonate, after which it will be independently tested for purity.
Lake Resources has appointed Hazen Research, an independent assay laboratory based in Colorado, USA,, to produce larger samples of its battery-quality lithium carbonate. Through its partnership with Hazen, Lake Resources intends to offer its product to potential off-takers and other interested parties. In addition to its partnerships with Hazen and Lilac, Lake Resources has appointed Canadian firm Novonix Battery Technology Solutions, a Nova Scotia-based independent testing and development laboratory, to create lithium battery test cells using Lake's lithium carbonate.
The Cauchari and Olaroz lithium brine projects are adjacent to one another and are surrounded by major players such as Lithium Americas (TSXV:LAC), SQM (NYSE:SQM), Ganfeng Lithium, and Advantage Lithium (TSXV:AAL). Drilling at Cauchari has so far returned values up to 540 mg/L lithium on the project. Lake Resources hopes to prove that both projects are extensions of the neighbouring projects.Company Highlights
- Lake Resources has five wholly owned clean lithium brine projects in stable mining jurisdictions in Argentina.
- Projects are near major lithium brine properties operated by Livent (NYSE:LTHM), Lithium Americas, SQM, Ganfeng Lithium and Advantage Lithium.
- Lake Resources is developing a multi-asset Tier One producer, with lithium at 99.7 percent purity that aims to provide cleaner lithium for an electric world.
- Kachi property has a mineral resource estimate of 4.4 million tonnes of contained lithium carbonate equivalent (LCE).
- Prefeasibility study of the Kachi projects foresees 25,500 tonnes of battery-grade lithium carbonate at US$4,178 per tonne for a total cost of US$544 million.
- Partnership in place with Lilac Solutions for direct brine extraction pilot plant.
- Working with Hazen Research to produce large samples of its battery-quality lithium carbonate.
- Development laboratory Novonix Battery Technology Solutions appointed to produce lithium-ion battery test cells using Lake Resources' lithium carbonate.
- Cauchari and Olaroz are structured as strategic extensions of neighbouring resources.
- Drilling at Cauchari proved the brine value holds similar chemical grades to other Cauchari-Olaroz lithium properties.
- The only junior with proven lithium brines in the Cauchari area.
Key Projects
Kachi Lithium Brine Project
Lake Resources' wholly owned Kachi lithium brine project encompasses 36 mining leases that cover 69,000 hectares in Catamarca province, Argentina. The property is approximately 100 kilometers south of the Livent (NYSE:LTHM) Hombre Muerto lithium brine production site. The Kachi property also covers a 20-kilometer by 15-kilometer salt lake.
In November 2018, Lake Resources released its maiden resource for the Kachi project. The report outlined a resource estimate of 4.4 million tonnes of contained lithium carbonate equivalent. The report included an indicated resource of 1 million tonnes of lithium carbonate equivalent and an inferred resource of 3.4 million tonnes lithium carbonate equivalent.Direct extraction pilot plant
Lake Resources partnered with Lilac Solutions to further the development of the Kachi project. Lilac Solutions has developed a proprietary ion-exchange technology for the extraction of lithium from brine resources.
The technology can achieve high recoveries with minimal costs and has rapid processing times when compared to using evaporation ponds. It also provides numerous environmental benefits as it eliminates the need for evaporation ponds and decreases the footprint of the operation. The technology also allows for the remaining brine to be re-injected into the aquifer.
Lilac and Lake Resources has commenced a pilot plant at Kachi to demonstrate the viability of the technology. Lake Resources expects to be able to increase its lithium grade to 25,000 mg/L lithium and produce a clean lithium hydroxide or lithium carbonate product for the battery market.
Lilac has since successfully operated the demonstration plant for 1,000 consecutive hours and produced 40,000 litres of lithium chloride eluate, which was then shipped to Saltworks to be converted to lithium carbonate. The lithium carbonate will then be independently tested for purity.
Prefeasibility Study
In May 2020 Lake Resources released a PFS on the Kachi property with a target of producing 25,500 tonnes of battery-grade lithium carbonate equivalent (LCE), using Lilac's direct extraction technology at an operating cost of US$4,178 per tonne. The study was based on an indicated resource of 1.01 million tonnes LCE at 290 mg/L lithium. Lake is currently working towards a definitive feasibility study on the Kachi property.
Upcoming Opportunities
The company is also in discussions with various downstream partners in the battery industry to secure future offtake agreements and additional funding for the project's development. In 2022, the company announced partnership opportunities with Ford Motor and Hanwa, a Japan-based trader. The non-binding memorandums of understanding for offtake proposal of the clean lithium provides meaningful financial opportunities for the company. Lilac’s ion exchange is proven through extensive testing at the pilot plant, allowing faster-to-market, high-recovery solutions that are environmentally sustainable.
Cauchari-Olaroz-Paso Lithium Brine Projects
The wholly owned Cauchari, Olaroz and Paso lithium brine projects are adjacent to one another and surrounded by significant players in Jujuy province in Argentina. The projects are adjacent to the Orocobre's Olaroz lithium brine operations and projects under development by Lithium Americas (ICX:LAC), SQM (NYSE:SQM), Ganfeng Lithium and Advantage Lithium.
Exploration
Lake Resources began drilling on the Cauchari project in April 2019. The company encountered conductive lithium brines with values up to 480 mg/L of lithium at depths of approximately 186 meters at Cauchari. The results compared favourably with the results from nearby pre-production areas that are currently under development.
The 290-square-kilometer Paso lithium brine project is a wholly owned project in the Jujuy Province in Argentina. The province is adjacent to the border of Chile and is immediately west of Orocobre's Olaroz lithium brine operations. Lake Resources' initial sampling program returned elevated results.
Drilling has also been advancing at both the Olaroz and Paso projects. Assay results are expected to become available during the third quarter of 2022. The drill wells are designed as part of an accelerated program across all projects in the area to quantify brines identified, develop aquifers, and conduct pump tests with data for initial feasibility studies. Rotary wells will be followed by diamond holes. Brines will be sampled and tested with direct lithium extraction methods, similar to previous work conducted on Kachi project lithium brines.
Catamarca
The 72,000-hectare Catamarca pegmatite project is located in Ancasti, Catamarca Province, and is 50 kilometers east of the city Catamarca. The project is accessible year-round. The area has hosted historical, small-scale production for lithium-bearing spodumene pegmatites over a 150-kilometer area. Latin Resources (ASX:LRS) holds mining leases adjacent to the property and has received results of 4.9 percent lithium oxide and 7.1 percent lithium oxide from old mine workings.Management Team
David Dickson - CEO and Managing Director
With more than 30 years' experience in process technology, engineering, construction, and engineering, procurement and construction (EPC) cost management across the energy sector, David Dickson has a proven track record in successfully delivering multibillion dollar resource projects. He is currently a senior advisor to private equity firm Quantum Energy Partners, a global provider of private capital to the responsibly sourced energy and energy transition and decarbonization sectors, and an executive strategic advisor at investment firm The Chatterjee Group. He is the former CEO of global engineering and construction firm McDermott International, where, through his seven-year tenure he built a strong leadership team that steered the company into profitable new markets, oversaw McDermott's merger with CB&I, and ultimately grew the business to more than 30,000 employees across 54 international markets.
Prior to McDermott, Dickson was previously president of Technip USA, overseeing marketing and operations in North, Central and South America. He was also appointed to the board of the US National Safety Council and a member of the World Hydrogen Council.
Stuart Crow - Non-Executive Chairman
Stuart Crow has global experience in financial services, corporate finance, investor relations, international markets, salary packaging, and stockbroking. He is passionate about assisting emerging and listed companies in attracting investors and capital. Crow has gained significant experience by owning and operating his own businesses.
Dr. Nick Lindsay - Executive Technical Director
Dr. Nick Lindsay has over 25 years of experience in Argentina, Chile and Peru, performing in technical and commercial roles in the resources sector with major and mid-tier companies, as well as start-ups. He has a bachelor of Science in geology with honours, and a master business administration. With a PhD in metallurgy and materials engineering, Lindsay is an expert in the field. A fluent Spanish speaker, he has successfully taken companies in South America, such as Laguna Resources, which he led as managing director, from inception to listing, through to development and subsequent acquisition. Lindsay is currently CEO of Manuka Resources, an unlisted company, and was previously the president of Chilean operations for Kingsgate Consolidated. He is a member of the AusIMM and the AIG.
Dr. Robert Trzebski - Non-Executive Director
Dr. Robert Trzebski is currently chief operating officer of Austmine and holds a degree in geology, a master’s degree in project management, a PhD in geophysics, and has more than 30 years of professional experience in project management and mining services. He holds considerable operating and commercial experience in Argentina and Chile, as a non-executive director of Austral Gold since 2007, listed on the ASX and TSXV. He is chairman of the audit and risk committee at Austral Gold. His role with Austmine has allowed him to develop considerable contacts across the operating and technology space of the global resources industry. Trzebski is also a fellow of the Australian Institute of Mining and Metallurgy and is also fluent in Spanish, German and English.
Amalia Sáenz - Non-Executive Director
Amalia Sáenz was appointed a non-executive director in July 2021. An experienced energy and natural resources lawyer based in Buenos Aires, Sáenz is assisting Lake Resources and its local team in Argentina to engage with local stakeholders and prepare for the development of clean lithium in Argentina. She is a partner at the law firm, Zang, Bergel & Viñes in Buenos Aires, where she leads the firm’s energy and natural resources practice. A leading member of the Association of International Petroleum Negotiators, Sáenz has extensive experience in energy and resources, including mergers and acquisitions, financing, joint ventures and operating agreements in Argentina. She has also worked in Central Asia and the United Kingdom, gaining experience in exploration and production development across international borders and cultures.
Scott Munro - Senior Vice President - Technology, Strategy and Risk
Scott Munro has significant experience and skills in strategic partnerships, corporate strategic planning, and technology development. He has experience in creating new business units and growing them rapidly to deliver large-scale industrial developments. Munro has overseen the successful delivery of large-scale industrial projects in international markets and has broad experience including general management, strategic planning, partnership development and overseeing technology development. His prior roles included corporate development officer at McDermott International with responsibility for Strategy Development following a period as business unit leader for the company's Americas, Europe, and Africa (AEA) Business Unit and overseeing its re-entry into these geographical areas.
Peter Neilsen - Chief Financial Officer
Peter Neilsen is a chartered accountant with more than 20 years’ experience in all facets of financial management, asset management, and leadership. He has served in a range of positions including as CFO, company secretary, finance manager, and other senior executive positions for a number of listed and unlisted companies in the energy and natural resources sector. Among the companies Neilson has worked with are Barrick, Xstrata and Round Oak. He has been involved in reducing operating expenses up to AU$100M through cost analysis, performance improvements and contract negotiations, acquisitions of up to $80M and managed revenues in excess of AU$5 billion.
John Freeman - Chief Legal Officer and General Counsel
John Freeman is a highly accomplished legal executive with over 30 years of experience in leading global companies. His extensive experience leadership experience includes serving as chief legal officer, executive vice-president and corporate secretary for McDermott International; general counsel and executive vice-president for Technip S.A.; global ethics and compliance director for Baker Hughes, in addition to other legal and compliance positions within that organization. Freeman has also served as prosecuting attorney for the US Office of Special Counsel and special assistant US attorney for the District of Columbia.
Mark Anning - Head of Legal, Australia, and Company Secretary
Mark Anning has practiced at partner level in private practice, and in-house at CEO and chair direct-report levels for several ASX and NASDAQ listed companies. With 30 years of legal and corporate practice experience, Anning has specialised in corporate and commercial law, dispute resolution, risk management and corporate governance. Anning is a chartered secretary and holds a Bachelor of Commerce and LLB (Hons) from the University of Queensland and a graduate diploma in applied corporate governance. He is a fellow of the Governance Institute of Australia and is admitted to practice in all Commonwealth Courts and the Supreme Courts of Queensland and Victoria.
Sean Miller - Corporate Development Officer
Sean Miller has significant experience and skills in project execution, supply chains, contracts and procurement, and project optimisation. He has overseen the successful delivery of multibillion dollar projects in Australia and in international markets. He has broad experience including general management, strategic planning, supply chain, finance, legal, information technology, sustainable development and human resources in both greenfield projects and brownfield sites. His prior roles include being head of commercial operations for The Carmichael Rail Project in Queensland; commercial development director at the Kamoto Copper Company Copper and Cobalt mine in Katanga province of the Democratic Republic of Congo; manager - contracts & procurement for Glencore's North Queensland Metals; and superintendent metal handling at Rio Tinto's Boyne Smelters Ltd.
Howard Atkins - Member of the Board
Howard Atkins brings deep financial management, capital markets, transaction, foreign exchange, and public company experience to the Lake Resources Board. He has over 30 years of financial leadership experience, including 20 years serving as a CFO for organisations including Wells Fargo, New York Life Insurance Company, and Midlantic Bank Corporation. Atkins previously held senior roles at Chase Manhattan Bank, including as head of Foreign Exchange and Markets Businesses for Europe, the Middle East and Africa, and head of the bank's worldwide interest rate derivatives trading business. He has served on the boards of Occidental Petroleum and Ingram Micro.
Dr. Cheemin Bo-Linn - Member of the Board
Dr. Cheemin Bo-Linn is an accomplished CEO, former Fortune 100 operations executive, and board director with over 25 years of governance expertise at private organizations and public companies across the Americas and Europe. Her board leadership experience at public companies includes her appointment as lead independent director, chair of every major committee (audit, compensation, nomination/governance), chair of sustainability/ESG, and chair of the technology and cybersecurity committees. Her related current board service includes Flux Power, a leading developer and manufacturer of advanced sustainable lithium-ion energy storage solutions for industrial mobility fleets.
Ana Gomez Chapman - Member of the Board
Ana Gomez Chapman is a financial services executive and board director with over 25 years of investment management, capital markets and business leadership experience. She has worked and lived across the US, Europe, Latin America and Asia Pacific. Chapman previously served on the board of directors of MP Materials, a US-based sustainable rare earth production and refining company where she steered the company through an operational turn-around that led to a New York Stock Exchange listing. She has also served on the advisory board of investment software company Backstop Solutions Group. She is a capital markets expert who has held senior roles at institutional investment firms including Hamilton Lane, where she currently serves as a managing director. She previously was senior relationship manager and alternatives lead at Allianz Global Investors, president of JHL Capital Group LLC, and vice-president at Goldman Sachs in their Latin American, Asian and US equities businesses.
