Lake Resources partners with Lilac Solutions to develop Argentine lithium project

Australian lithium developer Lake Resources (US-OTC: LLKKF; ASX: LKW) is forming a partnership with California-based Lilac Solutions for technology and funding to develop its flagship Kachi lithium brine project in Argentina.

The partnership comes after extensive test-work, and will see Lilac Solutions provide its proprietary technology, engineering teams and an on-site demonstration plant to help advance the project. Under the agreement, Lilac will also share in future development costs, which are currently estimated at about US$50 million. In return, Lilac can earn up to a 25% stake in the Kachi project, based on performance-based milestones.

The Lilac production process involves direct extraction, as opposed to evaporation ponds that use brine heating, and is supported by several tech investors, including the Bill Gates-led Breakthrough Energy Ventures. The Lilac direct extraction process offers lithium recovery rates 80-90% higher than other technologies to produce battery quality lithium carbonate of 99.97% purity and does so at a lower cost while also protecting the environment, including water resources, with its reduced footprint, the company says.

Lake Resources’ Managing Director, Steve Promnitz, says that as end users of high purity battery materials require more environmentally friendly production methods, Lilac’s innovative and efficient direct extraction method sets a new industry standard, something he calls “truly disruptive.”

“It has taken a non-mining tech solution, which cuts operating costs and boosts lithium recovery from our brines,” Promnitz said in a press release. “The process is modular, producing high purity lithium and can be ramped up quickly through pilot to commercial stages — this equity stake ensures a rapid commercialization of the Lilac technology at the Kachi site.”

The Kachi project is located in Argentina’s Catamarca province, in the southern part of the lithium triangle. Wholly-owned by Lake Resources’ subsidiary, Kachi Lithium, the 74,000-hectare project is about 22 km west of the town of El Penon.

Kachi’s JORC-compliant indicated mineral resource stands at 188,000 tonnes lithium at a weighted mean concentration of 289 milligrams per litre for 1.0 million tonnes of lithium carbonate equivalent. The inferred resource is 638,000 tonnes of lithium with a weighted mean concentration of 209 milligrams per litre for 3.4 million tonnes lithium carbonate equivalent. The company is targeting 25,500 tonnes of lithium carbonate production a year, over a minimum mine life of 25 years.

A prefeasibility study released in March forecast capex for Kachi would run to about US$544 million, and annual earnings before interest, taxes, depreciation and amortization (EBITDA) would come in at about US$260 million.

The company is working towards completing a definitive feasibility study and environmental and social impact assessment for Kachi in the second quarter of 2022.

If construction goes ahead, the company estimates the operation could be in production as soon as 2024.