Lake Resources accelerates towards Kachi definitive feasibility study reveal

Lake Resources (ASX: LKE) is confident it can achieve the significant milestone of producing a definitive feasibility study (DFS) for its Kachi lithium brine project in Argentina by year end.

The company told shareholders that a recent run of technical study and drilling successes have provided key data as it prepares to unwrap the definitive feasibility study details.

The company’s recent successful production testing at Kachi and ongoing drilling highlights are amongst the important results that continue to unveil Kachi’s commercial potential.

Testing provides key data

Lake reported earlier this month that it had successfully undertaken a range of tests which will help refine the company’ extraction and injection plans and the company’s aim to produce high purity battery grade lithium carbonate.

Notably, the extraction and injection tests demonstrated that Kachi has the right hydrogeologic conditions for brine extraction.

The company was also able to improve its understanding of Kachi’s upside with ongoing drilling success.

Extraction plans viable

Chief executive officer David Dickson said Lake had now demonstrated the viability of extraction and injection in its core resource area.

“We have drilled deeper for better grades and improved our drilling performance by 40% this year,” Mr Dickson said.

“Grades from recent extraction tests are 20% higher than exploration samples and we can expect further JORC updates prior to submitting the DFS.”

Mr Dickson said the study results have led to Lake deciding to locate the Kachi process plant closer to the resource extraction area.

He said a revised plant plot plan has now been drafted for this new location and the company is currently undertaking a review of the plan.

Mr Dickson, who recently visited Argentina, said the company has also revised its project design to include the capability for off-grid commissioning and the associated early production of lithium carbonate.

“We are pleased to now have the optionality for a power solution, and we are also considering aspects of grid connection and the needs of local communities.”

Deep drilling success

The confirmation of the definitive feasibility study timetable comes just one day after Lake revealed it had identified the potential to tap into deeper lithium brine resources at Kachi.

The company’s first hole to go beyond 400m below ground surface confirmed lithium-bearing brine continues in the salar between 400 m and 610 m below ground surface.

Data from that drillhole is now expected to impact future resource updates and the design of the hydrogeologic models being developed to simulate the extraction and injection wellfields as part of the project’s Phase 1 definitive feasibility study.

Significant resource upside

The initial deep drilling results have highlighted the potential to increase the extent of known brine in the vertical dimension at Kachi by as much as 30%.

Lake has previously used shallow drilling programs to continually build on its Kachi Project mineral resource estimates since the maiden estimate of 4.4 million tonnes of contained battery grade lithium carbonate equivalent (LCE) in inferred and indicated categories was unveiled in November 2018.

Those numbers were significantly upgraded in January 2023 with a measured and indicated resource of 2.2 million tonnes of LCE and approximately 3.1 million tonnes of LCE of inferred mineral resources.

The total resource was again increased in June of 2023 when the announced a mineral resource estimate of more than 2.9 million tonnes LCE in the measured and indicated categories and approximately 5.3 million tonnes of LCE in the inferred category for a total resource estimate of more than 8.1 million tonnes of LCE – all based on shallow drilling results.

Promising grades revealed

The company recently revealed that the lithium grade of the measured resource identified between zero and 400m below ground surface across the salar is 210 milligrams per litre lithium.

The indicated resource located immediately southeast was assessed to be able to produce 174 milligrams per litre lithium, while the surrounding inferred resource identified at a depth of between zero and 400m below ground surface has a concentration of 199 milligrams per litre lithium.

Lake is assessing whether these grade levels are continuous at the deeper levels.

On the project financing side, Mr Dickson said Lake is providing regular updates to export credit agencies in the United Kingdom and Canada and with offtake partners while working with strategic advisors on capital management.