Sydney, August 11, 2021 AEST (ABN Newswire) – Clean lithium developer Lake Resources NL (ASX: LKE) (FR: LK1) (OTCMKTS: LLKKF) has taken a big step forward in securing financial support for its flagship Kachi Lithium project, after receiving an official Expression of Interest (EOI) from the official Export Credit Agency (ECA) UK), UK Export Finance (UKEF), to cover approximately 70% of the total financing needs of the Kachi project, subject to standard project financing terms.
In addition to demonstrating official support for the Lake Clean Lithium Project, financing the project would offer a significantly lower cost of capital than traditional financing structures, with the principal being repaid over a period of 8.5 years after construction. . The funding also reflects the significant ESG benefits of the Kachi project for key stakeholders including the local community and the global clean energy campaign towards net zero emissions. The lower interest rate and longer repayment terms associated with ECA funding minimize the financial risks with this level of funding and will lead to the development of the project in Catamarca Province, Argentina. plant producing 50,000 tpa of high purity lithium carbonate equivalent. This comes against a backdrop of accelerating demand from major battery and electric vehicle manufacturers for sustainably produced battery-grade lithium, with growing projections of a growing structural supply deficit.
UKEF is the UK’s official export credit agency, which over the past five years has provided £ 14 billion (AU $ 26.4 billion) in support to UK exports and to international trade.
UKEF has provided a very strong expression of interest which is in line with the OECD arrangements for officially supported export credits. The support of the UKEF is not conditional on the participation of other ECAs. UKEF has stipulated minimum content requirements in the UK, but welcomes the participation of other ECAs, with which discussions are underway. UKEF’s EOI includes the possibility of a portion of direct loans at OECD CIRR rates linked to UK content.
The EOI is not a binding commitment and is subject to a series of standard project funding conditions and due diligence including, among others, appropriate structured direct debit contracts, successful completion of the feasibility study final (DFS) of Kachi, an Environmental and Social Impact Assessment (ESIA) to the Equator Principles.
The EOI provides an indication of the country limits available to Argentina, an indication of the attractiveness of the project, and it covers, in principle, the level of financial support and their flexibility and desired conditions. Official UK government support follows Lake’s March 2021 appointment of SD Capital Advisory Ltd.
and GKB Ventures Ltd. to organize the financing of the project, with an emphasis on ECAs (see the ASX press release of March 3, 2021). These financial advisors have actively engaged with Lake, Hatch’s technical advisors and environmental and social impact assessment consultant Knight Piesold.
The financial advisers underlined the technical and commercial attractiveness of the Kachi project and its contribution to the UN Sustainable Development Goals. A positive funding environment follows an increased focus by electric vehicle manufacturers on supply chain sustainability, as required by UK and EU regulations, and a demand for high quality products. quality and battery quality to support this approach.
In a joint statement, Gabriel Buck, of GKB Ventures Ltd. and David Buckle of SD Capital Advisory Ltd. respectively stated: “The quality of this project with its strong SDG credentials and its foreign currency income have been decisive factors in obtaining this exceptional level of support.”
The DFS and ESIA are well advanced, with a target for completion by the end of the first quarter of 2022. Lake is well funded until the Final Investment Decision (FID) on construction funding for Kachi , expected in mid-2022, with A $ 26 million in cash and cash equivalents at the end of the June 2021 quarter.
Lake CEO Steve Promnitz commented, “This offer is a watershed moment for Lake – having a top-tier ECA ready to indicate financial support for Kachi provides a huge vote of confidence in our clean energy project. The support reflects not only Kachi’s strong financial data but also its significant ESG benefits such as a low environmental footprint, meeting a number of defined sustainability goals.
“We recognize that we have important work to convert this expression of interest into a committed funding agreement. We are delighted that a number of international banks have already approached us who have expressed interest in being part of Kachi’s development and their interest depends on having a strong ECA like UKEF ”.
“Basically this EOI says that if Lake does what he says he’s going to do in DFS and ESIA, the project will be funded. Combined with the support of potential international buyers, investors will see more and more progress towards successful production and expansion of Kachi, perfectly synchronized to meet the needs of a decarbonizing world. ”
About Lake Resources NL
Lake Resources NL (ASX: LKE) (OTCMKTS: LLKKF) is a clean lithium developer using clean direct mining technology for the development of sustainable, high purity lithium from its flagship Kachi project, as well as three other lithium brine projects in Argentina. The projects occupy a prime location in the Lithium Triangle, where 40% of the world’s lithium is produced at the lowest cost.
This method will allow Lake Resources to be an efficient, responsible, environmentally friendly and competitive supplier of high purity lithium, easily scalable and in demand by manufacturers of electric vehicles and Tier 1 batteries.
Lake Resources NL