Lake Resources lithium production plans further supported by financial interest from Export Development Canada
Lake Resources (ASX: LKE) Kachi lithium brine project in Argentina received additional approval after Canada’s official export credit agency provided a letter of interest (LoI) to work with UK Export Finance to provide financing for the development of the asset.
Export Development Canada has expressed interest in working with UK Export Finance to provide approximately 70% of the total funding required to turn Kachi into a lithium chemicals production operation.
The Letter of Intent from Export Development Canada does not increase the previous level of funding. UK’s official export agency UK Export Finance expressed interest in providing last month.
However, Lake noted that the participation of the Canadian export agency will increase the flexibility of supply and provide better access to low-cost direct loans.
Lake Managing Director Steve Promnitz said Export Development Canada’s letter of intent, alongside UK Export Finance’s previous one, reduces the project’s risks for investors and international banks who continue to “voice keen interest ”in being part of Kachi’s development.
“Certainly, Lake has an important job to convert these Expressions of Interest (EoIs) into committed funding agreements.”
“However, these EoIs are a road map and if Lake does what it says it will do in the final feasibility study and the environmental and social impact assessment, the project will be funded,” added Mr. Promnitz.
Advancing the Kachi lithium brine project
A definitive feasibility study on the development of Kachi as well as an environmental and social impact assessment are underway and should be completed by mid-2022.
With $ 26 million in cash and cash equivalents, Lake is well funded for the final investment decision on financing the construction of Kachi, which is expected after the final feasibility study and environmental assessment have been completed. .
The company aims to develop a lithium carbonate operation of 25,500 tonnes per year with first production expected in 2024.
Lake plans to expand this production to 51,000 tpa with a study on this planned around the same time as the final feasibility study.
Unlike current lithium brine operations, Lake proposes to use Lilac Solutions’ direct mining technology, which has a much smaller environmental footprint.
Last week, Lake and Lilac cemented Kachi’s partnership with Lilac to receive a 25% stake in the project in exchange for its technology, engineering teams and on-site demonstration plant.
Lilac will also invest approximately US $ 50 million in the development of the project once it secures a 25% stake.