Lake Resources (ASX: LKE) has appointed Citi and JP Morgan as joint coordinators for the debt financing package, which is required to develop its flagship Kachi lithium brine project in Argentina’s Catamarca Province.
The leading investment banks were selected following a tender, which attracted “strong interest” from international banks along with indicative support of the export credit agencies.
Lake noted Citi and JP Morgan were deemed the “strongest combination” to coordinate the financing package to advance the Kachi project, which will produce about 50,000 tonnes per annum of lithium carbonate equivalent.
A prefeasibility study was published last year that gave the project an estimated capital outlay of US$544 million.
The Export Credit Agency of the United Kingdom (UKEF) has already given indicative support to fund 70% of the total capital requirement to develop Kachi.
Canada’s export credit agency Export Development of Canada has also said it would participate alongside UKEF.
Working together Citi and JP Morgan are expected to advance the project to final credit approval, including coordinating workstreams between lenders and third party analysis on major project milestones.
A definitive feasibility study is underway at Kachi, and this will govern the amount of debt financing required.
Lake managing director Steve Promnitz said the company was “pleased to partner with Citi and JP Morgan”.
Kachi lithium project
Lake is developing Kachi with a focus on the highest ESG (environment, social, governance) credentials.
The company is using Lilac Solutions’ “truly disruptive” lithium extraction technology, which is based on its proprietary ion-exchange process.
“We’ve taken ion exchange, a non-mining technology solution that is ubiquitous in the water treatment industry, and with cutting edge innovations have created a unique technology for lithium extraction, which we strongly believe will reduce operating costs and boost lithium recovery for production of lithium chemicals from the Kachi brines,” Lilac chief executive officer Dave Snydacker explained.
Compared to conventional brine processing technologies, Lilac’s method is lower cost, with higher lithium recoveries, and a much smaller environmental footprint that includes returning all water to is source.
In return for the technology, Lilac has a 25% interest in Kachi. Lilac is also contributing US$50 million to developing the project, which is its pro-rata share.
“Together, we are contributing to a clean energy future that aligns with investors, debt providers and off-takers’ requirements that new lithium projects adhere to strict ESG standards,” Mr Promnitz said.