Lake Resources lithium production plans are backed by financial interest from Export Development Canada

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Export Development Canada and UK Export Finance have expressed interest in working together to fund 70% of Lake Resources’ development costs to bring the Kachi lithium brine project online.

Lake Resources’ (ASX:LKE) Kachi lithium brine project in Argentina has received even greater approval after Canada’s official export credit agency provided a letter of interest (LoI) to work alongside UK Export Finance to provide funding for the development of the asset.

Export Development Canada has expressed interest in working alongside UK Export Finance to provide approximately 70% of the total financing required to develop Kachi into a lithium chemical production operation.

Export Development Canada’s Letter of Intent does not increase the previous level of funding that the 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 supply flexibility and provide better access to low-cost direct loans.

Lake’s managing director, Steve Promnitz, said the letter of intent with Export Development Canada, alongside the previous one with UK Export Finance, reduced the risks of the project for investors and international banks who continue to “express a keen interest” in being part of the development of Kachi.

“Certainly, Lake has an important job of converting these Expressions of Interest (EoI) into committed funding agreements.”

“However, these EoIs are a roadmap and if Lake does what it says it will do in the Definitive Feasibility Study and Environmental and Social Impact Assessment, the project will be funded,” said added Mr. Promnitz.

Advancing the Kachi Lithium Brine Project

A definitive feasibility study on the Kachi development as well as an environmental and social impact assessment is underway and is expected to be completed by mid-2022.

With $26 million in cash and cash equivalents, Lake is well funded for the final investment decision on Kachi construction funding which is expected after the completion of the Definitive Feasibility Study and Environmental Assessment.

The company aims to develop a 25,500 tpa lithium carbonate operation with first production expected in 2024.

Lake estimates the extension of this production to 51,000 tpy with a study on this subject planned at approximately the same time as the definitive feasibility study.

Unlike current lithium brine operations, Lake proposes to use Lilac Solutions direct extraction technology, which has a much smaller environmental footprint.

Last week, Lake and Lilac cemented the partnership for Kachi 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 its 25% stake.

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