Lithium brine explorer Lake Resources (ASX: LKE) has delivered what it claims is a “compelling” pre-feasibility study for its Kachi project in Catamarca, Argentina.
The study estimates capital expenditure of US$544 million (A$830 million) to build a 25-year operation that would generate 25,000 tonnes per annum of battery grade lithium carbonate equivalent.
This is estimated to bring in about US$155 million (A$245 million) in earnings before interest tax depreciation and amortisation in the first full year of mining.
The study has put Kachi’s post tax net present value at US$748 million (A$1.18 billion) with a 22% post tax internal rate of return.
“This is a major milestone for Lake that allows us to ramp up project development initiatives,” Lake managing director Steve Promnitz said.
“The pre-feasibility study highlights the cost competitive nature and scale of the flagship Kachi project using direct extraction, but has the benefit of producing high purity product capable of attracting premium pricing while being a leader in sustainable lithium desired by tier one electric vehicle makers.”
“The pre-feasibility study, together with samples from the pilot plant, will help advance with discussions with off-takers and financiers,” Mr Promnitz added.
Kachi lithium brine project
Underpinning the planned operation is an indicated resource of 1 million tonnes of contained lithium carbonate equivalent at 290 milligrams per litre – which equates to 22% of the project’s total 4.4Mt lithium carbonate equivalent resource.
Lake wholly owns the project which spans 70,000 hectares of mining leases in South America’s Lithium Triangle.
Unlike conventional lithium brine producers, Lake is looking to processing the Kachi brine via Lilac Solutions’ direct extraction method, which was included in the study and positions the project at the lower end of the cost curve.
Lilac’s process offers a sustainable solution with brine returned to the aquifers once the lithium has been extracted and eliminates the need for large traditional evaporation ponds.
Additionally, the technology can achieve up to 90% lithium recoveries compared to traditional operations which typically achieve recoveries below 50%.
Lake plans to deliver product samples from the pilot plant to potential offtake parties, with discussions continuing.
The company will also work on updating the resource to extend the project’s life with financing negotiations also ongoing.
Lake’s shares were steady at $0.038 in early morning trade.