Lake Resources NL Quarterly Activities Report
The surge in popularity of electric vehicles cannot be halted. Sales of cars powered by batteries could see a significant growth of 40 percent worldwide, and the need for lithium is predicted to double to 1.5 million tonnes by 2027. This optimistic forecast can be attributed to the impressive features of lithium-ion batteries, which are capable of charging at a quicker rate and storing a greater amount of power in a lighter and more compact package.
Even though Australia, Chile, and China have traditionally been the leading lithium producers globally for a significant period, Argentina has now taken the lead with 21 percent of the world's lithium reserves. Argentina's lithium mining industry comprises of two mines presently in operation, along with 13 mines scheduled for development and numerous others being considered.
Lake Resources is a lithium company that is dedicated to creating pure, eco-friendly lithium at a reasonable price. They have four lithium brine projects in Argentina, which are located in an area that is owned entirely by Lake Resources and is one of the biggest in the Lithium Triangle. The Lithium Triangle is responsible for supplying 40 percent of the global lithium demand.
Lake Resources has a total of five lithium projects in the central region of the Lithium Triangle. However, the main focus is on developing its own Kachi lithium project, which is located roughly 100 kilometers south of the FMC Lithium's Hombre Muerto lithium brine production facility.
Lake Resources recently released an update on the estimates for its resources in 2023. Through further drilling, the company has enhanced and gained more confidence in the resource located in the central area of the salt flat. The measured and indicated resources of lithium carbonate equivalent (LCE) have been estimated to be around 2.2 million tonnes, covering an expansive area of 81 square kilometers, with a depth of 400 meters. Additionally, there are inferred resources of 3.1 million tonnes of LCE, which extend over an area of 117 square kilometers. Even further potential exists, as the resource is not yet fully explored and could extend up to 700 meters in depth and laterally. Ongoing drilling activities aim to provide a more precise understanding of the resource's boundaries.
In February 2020, Lake Resources published a preliminary study (PFS) for its Kachi lithium project, revealing a goal of producing around 25,500 tonnes of high-quality lithium carbonate for batteries each year. This would be achieved by utilizing Lilac Solutions' innovative method of direct lithium extraction (DLE) technology.
The research was conducted using Kachi's provided estimate of 1.01 million tonnes of lithium carbonate equivalent (MtLCE) at a concentration of 290 mg/L. The analysis predicts that the cost of operation will be around US$4,178 for each metric tonne, resulting in a total capital expenditure of roughly US$544 million.
Lake Resources and Lilac Solutions have joined forces to construct a pilot facility for direct extraction at the Kachi project. Lilac Solutions has created an exclusive method involving ion exchange technology to extract lithium from brine sources. This groundbreaking technique enables the extraction process to be conducted swiftly and cost-effectively while ensuring a high recovery rate. Moreover, it offers various environmental advantages, most notably water conservation. By implementing its distinct approach, Kachi strives to produce the purest lithium globally.
In March 2022, the engineering team at Lilac Solutions sent the modular demonstration plant to the Kachi Project in Argentina. After its arrival, Lilac took charge of operating the demonstration plant for a few months. During this time, they successfully produced 2.5 tonnes of lithium carbonate in the form of lithium chloride (eluate).
Up until December 31, 2022, Lilac has effectively run the sample facility for 1,000 continuous hours and generated 40,000 liters of lithium chloride eluate. This accomplishment fulfills all important evaluation targets as set out in Lake Resources' agreement with Lilac. The lithium chloride eluate created by Lilac will be transformed into lithium carbonate and undergo separate examinations to verify its purity.
The Kachi Project is progressing smoothly and is ready to transition from the testing phase to large-scale production thanks to the joint efforts of Lake Resources and Lilac Solutions. They have successfully produced 2,500 kilograms of lithium carbonate equivalents (LCE), a significant achievement. As a result, Lilac Solutions has decided to increase its ownership stake in the Kachi Project from 10 percent to 20 percent. The 2,500 kilograms of LCEs were extracted at Kachi with an impressive 80 percent lithium recovery rate. Additionally, the plant operated with a remarkable 90 percent uptime. What's more, the extraction process at Kachi requires only 1,000 times less land compared to traditional evaporation ponds and uses 10 times less water than conventional aluminum-based absorbents.
Lake Resources has chosen Saltworks, a self-regulating analysis lab located in Canada, to manufacture bigger portions of lithium carbonate. Lake Resources has contingent preliminary contracts with SK On and WMC Energy for the purchase of the product. The conditions state that each partner will receive 25,000 tons per annum, in addition to a 10 percent ownership interest in Lake Resources.
The Cauchari and Olaroz lithium brine ventures are situated side by side and are enclosed by notable participants like Lithium Americas (TSXV:LAC), SQM (NYSE:SQM), Ganfeng Lithium, and Advantage Lithium (TSXV:AAL). Testing at Cauchari has previously demonstrated results as high as 540 mg/L lithium within the initiative. Lake Resources aspires to confirm that both ventures can be seen as expansions of the neighboring initiatives.
Lithium Brine Potential At Kachi
Lake Resources possesses full ownership of the Kachi lithium brine project, which includes 36 mining leases spanning across a vast area of 69,000 hectares in the Catamarca province of Argentina. Situated approximately 100 kilometers southwards from the Livent Hombre Muerto lithium brine production site, the Kachi property boasts a massive salt lake spanning 20 kilometers in width and 15 kilometers in length.
In November 2018, Lake Resources unveiled its initial estimation of resources for the Kachi project. The report specified that there were approximately 4.4 million tonnes of lithium carbonate equivalent available. Within this estimate, 1 million tonnes were classified as indicated resources, meaning they were more certain, while the remaining 3.4 million tonnes were considered inferred resources, indicating a lower level of certainty. Fast forward to 2023, and Lake Resources released an updated and more confident assessment of the resources in the central region of the salar. This area now boasts 2.2 million tonnes of lithium carbonate equivalent, which have been measured and indicated. This higher confidence level extends to a depth of 400 meters and covers an area of 81 square kilometers. Just beyond this measured and indicated region, there are an additional 3.1 million tonnes of lithium carbonate equivalent inferred resources spread out over 117 square kilometers.
Extraction Plant Demo
Lake Resources has formed a collaboration with Lilac Solutions to enhance the progress of the Kachi project. Lilac Solutions has created a unique and exclusive method of using ion-exchange technology to extract lithium from brine resources.
The technology has the ability to attain high returns at low expenses and boasts quick processing speeds in comparison to the utilization of evaporation ponds. Moreover, it offers various ecological advantages by eradicating the necessity for evaporation ponds and reducing the overall impact of the operation. Additionally, the technology permits the remaining brine to be reintroduced into the aquifer.
Lilac has effectively run the pilot facility for a continuous duration of 1,000 hours and generated a hefty amount of 40,000 liters of lithium chloride eluate. Consequently, this eluate was sent to Saltworks for its conversion into lithium carbonate. Afterwards, an impartial examination will be conducted to evaluate the purity level of the obtained lithium carbonate.
Lake Resources published a Preliminary Feasibility Study (PFS) in May 2020 regarding the Kachi property. The aim is to produce 25,500 tonnes of high-quality lithium carbonate equivalent (LCE) for batteries. To achieve this, Lake will utilize Lilac's direct extraction technology, with an estimated operational expense of US$4,178 per tonne. The PFS was conducted based on an indicated resource of 1.01 million tonnes of LCE, with a lithium content measuring 290 mg/L. Presently, Lake Resources is in the process of conducting a comprehensive feasibility study for the Kachi property.
Lilac's ion exchange has been extensively tested at the demo facility, confirming its effectiveness. This enables the company to provide sustainable solutions that are not only quicker to market but also ensure higher recovery rates. In the coming weeks, Lilac anticipates sharing the outcomes of the tests performed on the 40,000 liters of lithium chloride that were sent to Saltworks for transformation into lithium carbonate. These results will shed light on the purity levels achieved during further testing.
Moreover, the organization anticipates delivering a progress report on the Kachi Project during the second quarter. The finalized feasibility study is projected to be completed around the middle of 2023, with the Environmental Impact Assessment being finalized and submitted by the end of the fourth quarter in 2023.
Cauchari-Olaroz-Paso Lithium Ventures
The Cauchari, Olaroz, and Paso lithium brine projects, which are fully owned, are situated next to each other in the Jujuy province of Argentina. These projects are surrounded by major players such as Orocobre's Olaroz lithium brine operations and projects being developed by Lithium Americas (ICX:LAC), SQM (NYSE:SQM), Ganfeng Lithium, and Advantage Lithium.
Lake Resources started drilling on the Cauchari project in April 2019. During the drilling process, the company discovered lithium-rich brines that had high conductivity levels. These brines contained up to 480 mg/L of lithium and were found at depths of around 186 meters at Cauchari. The findings were positively comparable to those obtained from neighboring regions that are currently being developed for production purposes.
Lake Resources is the sole owner of the Paso lithium brine project, which covers an area of 290 square kilometers in the Jujuy Province of Argentina. This province is located next to the Chilean border and is situated west of Orocobre's Olaroz lithium brine operations. The first sampling program conducted by Lake Resources showed promising results with high levels of lithium.
Currently, Lake is wholeheartedly dedicated to advancing its Kachi project. However, drilling activities will recommence at both the Olaroz and Paso projects. The purpose of these drill wells is to expedite progress across all projects in the region by assessing the presence of brines, establishing aquifers, and conducting pump tests to gather data for preliminary feasibility studies. After rotary wells are completed, diamond holes will be drilled. Brine samples will be collected and subjected to direct lithium extraction methods, following the same approach used for testing lithium brines in the Kachi project.
David Dickson: CEO & Managing Director
David Dickson is an experienced professional in the field of process technology, engineering, construction, and engineering, procurement and construction (EPC) cost management in the energy sector. He has a wealth of knowledge and expertise, with over 30 years of experience in successfully delivering large-scale resource projects worth billions of dollars. Currently, he serves as a senior advisor to Quantum Energy Partners, a renowned private equity firm that specializes in providing capital for responsibly sourced energy, energy transition, and decarbonization sectors. In addition, he holds the position of executive strategic advisor at The Chatterjee Group, an investment firm. Prior to his current roles, Dickson served as the CEO of McDermott International, a leading global engineering and construction company. During his seven-year tenure, he assembled a strong leadership team that guided the company into profitable new markets. He also oversaw McDermott's merger with CB&I, resulting in significant growth and expansion, including a workforce of over 30,000 employees across 54 international markets.
Before McDermott, Dickson served as the president of Technip USA, where he was responsible for managing and directing marketing and operations across North, Central, and South America. Additionally, he was chosen to join the board of the US National Safety Council and became a valued member of the World Hydrogen Council.
Stuart Crow: Non-exec Chair
Stuart Crow has extensive international expertise in the financial sector, including corporate finance, investor engagement, global markets, remuneration packages, and stock trading. He is highly enthusiastic about aiding both up-and-coming and established companies in attracting investments and securing capital. Crow has amassed valuable know-how through his own entrepreneurial ventures.
Dr. Trzebski: Non-Executive Director
Dr. Robert Trzebski currently serves as the chief operating officer of Austmine and possesses a geology degree, a master's degree in project management, a PhD in geophysics, and over three decades of professional experience in project management and mining services. He has extensive operational and commercial experience in Argentina and Chile, acting as a non-executive director of Austral Gold since 2007, which is listed on the ASX and TSXV. Additionally, he serves as the chairman of the audit and risk committee at Austral Gold. Through his role at Austmine, Trzebski has been able to establish significant connections across the operational and technological aspects of the global resources industry. He is also a member of the Australian Institute of Mining and Metallurgy and is proficient in Spanish, German, and English languages.
Amalia Sáenz: VP Of Argentinian Corporate Affairs
In July 2021, Amalia Sáenz was given the role of a non-executive director. She is an accomplished lawyer specializing in energy and natural resources. Sáenz resides in Buenos Aires and works closely with Lake Resources and their team in Argentina. Her main responsibilities include engaging with local stakeholders and preparing for the advancement of clean lithium production in Argentina. Sáenz holds a partnership position at Zang, Bergel & Viñes, a prestigious law firm in Buenos Aires, where she oversees the energy and natural resources division. She is an esteemed member of the Association of International Petroleum Negotiators and possesses vast expertise in energy and resources law, encompassing areas such as mergers and acquisitions, financing, joint ventures, and operating agreements specifically in Argentina. Additionally, Sáenz has gained valuable international experience in exploration and production development by working in Central Asia and the United Kingdom, which exposed her to different cultures and international boundaries.
Karen Greene - Investor Relations & Communications EVP
Karen Greene is a highly skilled professional in the field of investor relations, boasting a wealth of expertise accumulated over a remarkable span of 25 years. She has played integral roles in the success of numerous prominent American companies throughout her career.
She has held high-level positions in investor relations, such as senior vice-president responsible for global client experience and corporate communications. She was also a member of the senior leadership team at Q4 Inc in Toronto. Additionally, she has served as a managing director for investor relations at Hamilton Lane Corp and Actua Corporation in the United States, where she was also responsible for communications.
Greene holds a Master of Business Administration degree from Boston University and Temple University, with outstanding academic performance recognized on the Dean's List. Additionally, he earned a Bachelor's degree in Political Science, achieving Dean's List honors at both the University of Rochester and the Universite de Sorbonne in Paris, France.
Scott Munro - Technology, Strategy & Risk SVP
Scott Munro possesses extensive knowledge and expertise in forming alliances, corporate strategic mapping, and advancing technology. He holds a track record of establishing and expanding business divisions at a rapid pace to achieve significant industrial advancements. Munro has effectively managed the implementation of major industrial ventures in global markets, encompassing a wide range of roles such as general management, strategic mapping, partnership establishment, and overseeing technological advancements. Previously, he served as the corporate development officer at McDermott International, where he was accountable for devising strategies after leading the company's Americas, Europe, and Africa (AEA) Business Unit and facilitating its re-entry into these regions.
Peter Neilsen: CFO Extraordinaire
Peter Neilsen is a certified accountant who has accumulated over two decades of experience in various aspects of financial management, asset management, and leadership. Throughout his career, he has held numerous prestigious positions such as CFO, company secretary, finance manager, and other high-ranking executive roles for both listed and unlisted companies operating in the energy and natural resources industry. Some of the notable companies he has worked with include Barrick, Xstrata, and Round Oak. Neilsen has a proven track record of successfully reducing operating costs by up to AU$100M through meticulous cost analysis, implementing performance enhancements, and negotiating contracts. He has also been involved in significant acquisitions worth up to $80M and has overseen revenues exceeding AU$5 billion.
John Freeman: CLO And General Counsel
John Freeman is a very successful legal executive who has worked in top positions in international companies for more than three decades. He has held various important roles such as chief legal officer, executive vice-president, and corporate secretary for McDermott International. He has also worked as a general counsel and executive vice-president for Technip S.A., and as the global ethics and compliance director for Baker Hughes, where he held several legal and compliance-related positions. Additionally, Freeman has worked as a prosecuting attorney for the US Office of Special Counsel and as a special assistant US attorney for the District of Columbia.
Gentry Brann: Top HR Executive
Gentry Brann brings with her more than 25 years of experience leading HR and communications functions. She has recently joined Lake after working at McDermott, where she was in charge of the company's strategic focus on inclusion and diversity, as well as overseeing human resources, communications and marketing, real estate and facilities, and global travel. Before joining McDermott, Brann was a senior vice-president of communications and brand management at CB&I in 2018. Prior to that, she held the role of vice-president of investor relations and corporate communications for Shaw before CB&I's acquisition of the company. Brann obtained her MBA from Duke University's Fuqua School of Business and a bachelor's degree from Louisiana State University. She has also successfully completed the Advanced Leadership Program at Rice University's Jones School of Business.
Mark Anning: Legal Head & Company Secretary In Australia
Mark Anning has worked as a partner at private law firms and as a senior executive for multiple publicly traded companies. He has 30 years of experience in the legal and corporate fields, focusing on corporate law, resolving disputes, managing risk, and corporate governance. Anning is a certified secretary and has a Bachelor's degree in Commerce and Law, as well as a diploma in applied corporate governance. He is a member of the Governance Institute of Australia and is qualified to practice law in all Commonwealth Courts, as well as the Supreme Courts of Queensland and Victoria.
Sean Miller: Corporate Development Exec
Sean Miller is highly experienced and skilled in effectively managing projects, overseeing supply chains, handling contracts and procurement, and optimizing projects. He has successfully delivered multibillion dollar projects both domestically in Australia and in international markets. His expertise extends to various areas including general management, strategic planning, supply chain management, finance, legal matters, information technology, sustainable development, and human resources. This includes working on projects from the ground up as well as existing sites. Prior to his current position, he held roles such as head of commercial operations for The Carmichael Rail Project in Queensland, commercial development director at the Kamoto Copper Company Copper and Cobalt mine in the Katanga province of the Democratic Republic of Congo, manager of contracts and procurement for Glencore's North Queensland Metals, and superintendent of metal handling at Rio Tinto's Boyne Smelters Ltd.
Howard Atkins: Non-Exec Director
Howard Atkins brings extensive expertise in financial management, capital markets, transactions, currency exchange, and working with public companies to his role on the Lake Resources Board. With over three decades of experience in financial leadership, including two decades as a CFO for prominent organizations such as Wells Fargo, New York Life Insurance Company, and Midlantic Bank Corporation, Atkins is well-versed in navigating complex financial landscapes. Prior to his current position, Atkins held senior positions at Chase Manhattan Bank where he led the Foreign Exchange and Markets Businesses for Europe, the Middle East, and Africa, as well as overseeing the worldwide interest rate derivatives trading business. Additionally, he has served on the boards of Occidental Petroleum and Ingram Micro, further demonstrating his extensive industry knowledge and leadership abilities.
Dr. Cheemin Bo-Linn - Non-Exec Director
Dr. Cheemin Bo-Linn is a highly successful CEO, who has previously held executive positions at Fortune 100 companies. She has also served on the boards of various private and public companies in both America and Europe for more than 25 years, bringing with her a wealth of knowledge and experience in governance. When it comes to leading boards at public companies, Dr. Bo-Linn has been appointed as the lead independent director and has chaired all major committees, including audit, compensation, and nomination/governance. In addition, she has also chaired the sustainability/ESG and technology and cybersecurity committees. Currently, she is actively involved in the board of Flux Power, a prominent company that develops and manufactures advanced, eco-friendly lithium-ion energy storage solutions for industrial mobility fleets.
Ana Gomez Chapman: Non-E.D
Ana Gomez Chapman is a seasoned professional in the financial services industry, with a wealth of experience in investment management, capital markets, and business leadership. Over the course of her impressive career, she has worked in various countries spanning the United States, Europe, Latin America, and Asia Pacific. Chapman's expertise has been recognized through her involvement in the boards of reputable companies. For instance, she played a crucial role as a board member at MP Materials, a sustainable rare earth production and refining company based in the United States. Under her guidance, the company successfully underwent a significant operational turnaround, resulting in its listing on the New York Stock Exchange. Additionally, Chapman has contributed her insights as a member of the advisory board for Backstop Solutions Group, an investment software company. With her extensive knowledge of capital markets, Chapman has held influential positions in prominent institutional investment firms. Currently, she serves as a managing director at Hamilton Lane, where she brings her expertise to the table. Prior to that, she held key roles such as senior relationship manager and alternatives lead at Allianz Global Investors, president of JHL Capital Group LLC, and vice-president at Goldman Sachs, where she focused on Latin American, Asian, and US equities. In summary, Ana Gomez Chapman's extensive background in financial services, coupled with her global experience, makes her a highly accomplished professional in the industry. Her contributions to the success of various companies and her expertise in capital markets continue to be invaluable.