Clean lithium developer Lake Resources (ASX: LKE) is taking steps towards locking in finance for its flagship Kachi lithium brine project in Argentina, having appointed joint financial advisors this week.
The company today announced it has engaged SD Capital Advisory Limited and GKB Ventures Limited as joint financial advisors to structure and arrange project finance for the development.
The advisors have been tasked to focus on export credit agencies (ECAs), which offer trade loans and other services to facilitate domestic companies’ international exports.
“Export credit offers a low cost and secure form of debt funding which will maximise value for shareholders and minimise risks to the company,” Lake managing director Steve Promnitz said.
Lake’s announcement has described the appointment as a significant development milestone for the company and the Kachi project.
Project finance experience
London-based independent financial boutique SD Capital Advisory specialises in strategic business advisory, financial modelling and credit analysis, with a focus on securing project finance for corporates and mining/resources companies in developed and frontier markets.
GKB Ventures is an independent consultancy that helps clients to secure cross-border transactions and access international finance via ECAs.
According to Lake, GKB has a track record of delivering knowledge and access to government-supported schemes, including ECA financing. The firm is currently appointed on over US$4 billion (A$5.1 billion) of structured ECA financings and has successfully closed numerous projects in the last five years.
“We are attracted by the characteristics of the Kachi project and Lake’s innovative use of disruptive direct extraction technology from California-based Lilac Solutions, resulting in a low environmental impact and impressive ESG (environmental, social and governance) outcomes,” SD Capital Advisory chairman David Buckle and GKB Ventures managing director Gabriel Buck said in a joint statement.
“Ultimately, this leads to the production of a high purity lithium carbonate matching the sustainable goals of global auto manufacturers by offering responsibly sourced battery-grade supply,” they added.
“Impressive ESG characteristics are indeed front and centre for financiers today, including export credit agencies.”
Kachi DFS commenced
Lake kicked off a definitive feasibility study at its flagship Kachi project in January, with results anticipated in the first quarter of 2022.
The company has already delivered lithium carbonate samples at 99.97% purity and a pre-feasibility study announced last April demonstrated the potential for a large, long-life, low-cost operation.
Lake’s project endeavours to use Lilac Solutions’ innovative direct extraction technique, a sustainable solution which involves returning 99% of the brine back to its source after the lithium has been removed.
Lake is currently funded through to the construction financing phase – anticipated to be mid-2022 – with production of 25,000 tonnes per annum of lithium carbonate scheduled for the first half of 2024.
Today’s news follows Tuesday’s announcement that battery tester Novonix (ASX: NVX) found Lake’s 99.97% pure lithium carbonate yielded “improved capacity retention” and “better electrochemical behaviour” in coin cells compared to other commercially available lithium product.