Lake Resources: Quarterly Activities and Cashflow Report

HIGHLIGHTS:

• First lithium chloride samples successfully produced from Lilac pilot plant using Kachi brines, with high lithium concentrations similar to previously demonstrated at laboratory bench scale

• 20,000 litres of brines from Kachi continues to be processed at Lilac’s pilot plant module in California

• Compelling and robust Pre-Feasibility Study (PFS) results for Kachi Lithium Brine Project in Argentina, show project capable of producing sustainable high-purity lithium carbonate to attract premium pricing.

• Long life, low cost operation with 25,500tpa LCE using Lilac Solutions’ innovative sustainable direct extraction method at competitive operating and capital costs.

• High purity battery grade lithium carbonate samples (99.9%) demonstrated from Kachi Project.

• Discussions advanced with international financiers for funding advancement of Kachi Project.

Lake Resources NL (ASX:LKE, OTC:LLKKF) is a lithium developer utilising clean, direct extraction technology for the development of sustainable, high purity lithium products from its flagship Kachi Project (4.4mt LCE resource), as well as three other lithium brine projects in Argentina. The projects are in a prime location within the Lithium Triangle, where 40% of the world’s lithium is produced at the lowest cost. Lake owns over 200,000 hectares (0.5 million acres) of leases, including one hard rock project, alongside all 5 major lithium producers.

This efficient, disruptive direct lithium extraction method (DLE) from our technology partner, Lilac Solutions will enable Lake Resources to be an efficient, responsibly-sourced, environmentally friendly and cost competitive supplier of high-purity lithium carbonate. High purity sustainable lithium is in demand by Tier 1 electric vehicle makers and battery makers. Lilac Solutions technology gained the investment support of major investors in February 2020. Pilot plant modules are operating at the Lilac facility in California USA using brines from Lake’s Kachi Lithium Brine Project and produce lithium chloride for conversion into lithium carbonate for potential offtake partners.

High purity battery quality lithium carbonate (99.9% purity) with very low impurities has been produced from lithium brines from Lake’s Kachi project (refer ASX announcement 9 January 2020). The growth of higher density batteries to drive the latest electric vehicles has significantly increased demand for a high purity product with low impurities, and the Lilac DLE process delivers this consistently which will command a premium price. Larger volume samples will be delivered in Q3 2020 to a number of downstream participants for customer qualification purposes.

The environmental footprint of Lilac’s DLE is far smaller than conventional brine evaporation processes or hard rock mining. By using an adaptation of a known,benign water treatment process to produce lithium, Lake avoids any mining and returns virtually all water (brine) to its source without changing its chemistry, apart from lithium removal. This is a better outcome for local communities and for the environment.

The Kachi Lithium Brine Project covers 70,000 ha over a salt lake south of Livent’s lithium operation in
Argentina with a large indicated and inferred resource of 4.4 Mt LCE (Indicated 1.0Mt, Inferred 3.4Mt) (refer ASX announcement 27 November 2018). A robust and compelling pre-feasibility study (PFS) by a tier 1 engineering firm was delivered over the Kachi Project (refer ASX announcement 28 April 2020).. A long-life, low cost potential operation was demonstrated with annual production target of 25,500 tpa of battery quality lithium carbonate by direct extraction. The PFS showed the technology is cost competitive with other lithium brine projects but also showed the advantage of producing a premium product generating high operating (EBITDA) margins using conservative price forecasts.

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