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In the afternoon discussions, the Lake NL Resources (ASX: LKE) the stock price returned to its morning gains and slipped into the red.
As of this writing, shares of the lithium developer are down more than 1% at $1.13.
Why is the Lake Resources stock price falling?
Investors sold Lake Resources’ share price this afternoon after the release of another short attack from J Capital.
According to the release, the investment firm has obtained information from the UK that paints a very different picture of a announcement from August 2021 regarding potential funding from UK Export Finance (UKEF).
This announcement was titled “Strong Expression of Interest to fund the project at approximately 70% of the total Kachi project funding requirement”.
However, J Capital alleges UKEF was not a fan of the announcement.
What does J Capital say?
Below are some key paragraphs from J Capital’s update:
We have filed a Freedom of Information Act (FOIA) request with the UK government to verify Lake Resources’ (Lake) claim that it has ‘confirmed’ funding from UK Export Finance (UKEF). These documents appear to reveal that Lake made incorrect statements regarding the UKEF Expression of Interest (EOI). UKEF says Lake is only at the start of the application process.
Lake says the EOI from UKEF provided in August 2021 “significantly reduces project risk”. A cache of documents released by UKEF as part of the FOIA request shows a conflict between the information Lake is presenting to the market and UKEF’s view of the EOI supporting the project.
UKEF appeared to criticize Lake’s press release for calling the EOI a “strong” expression of interest and asked Lake not to say that the EOI is an endorsement of the ESG benefits of the Kachi project. The same cache of documents disputes a Reuters article quoting then chief executive Stephen Promnitz as saying UKEF “really liked the ESG benefits of Kachi”. In this regard, UKEF stated that “Lake should refrain from inferring a statement from UKEF”.
J Capital also points out that despite the above, Lake Resources has stated in its annual report that there is a 100% probability that its chairman, Stu Crow, will receive 5 million performing rights which is contingent on signing deals. funding for the project. He adds :
Unless there have been recent undisclosed developments Lake are aware that the UKEF funding is not ‘confirmed’ and yet despite this they have planned for Mr Crow to receive the rights to execution which are now acquired.
Lake Resources has not yet responded to the report.