- Lake Resources (LKE) has reported a 110 per cent increase in the net present value of its Kachi Brine Lithium Project in Argentina to US$1.6 billion (A$2.1 billion)
- The company updated the pre-feasibility study using a revised price forecast of US$15,500 (A$20,000) per tonne of battery-grade lithium carbonate
- Based on the updated price forecast, the Kachi project also has a 35 per cent internal rate of return and an annual EBITDA of US$26 million (A$350 million)
- The clean lithium developer is assessing a potential increase in production at the project as demand from battery makers continues to climb
- Shares last traded at 35 cents
Lake Resources (LKE) has reported a 110 per cent increase in the net present value of its Kachi Brine Lithium Project in Argentina to US$1.6 billion (A$2.1 billion).
As the price of lithium climbs with a rise in demand from the battery sector, the company updated the pre-feasibility study (PFS) delivered in April 2020, using a revised price forecast derived from discussions with potential offtake partners and projections from Benchmark Mineral Intelligence.
The original PFS used a flat forecast from CIF Asia of US$11,000 (A$14,200) per tonne of lithium carbonate for 25 years, compared to the revised estimate of US$15,500 (A$20,000) per tonne of battery-grade lithium carbonate which formed the basis of the updated PFS.
The refreshed PFS increased the Kachi Project post-tax net present value from US$748 million (A$965.6 million) to US$1.58 billion (A$2.1 billion).
The post-tax internal rate of return was also increased to 35 per cent along with an annual EBITDA of US$260 million (A$350 million).
“Updated lithium prices demonstrate just how financially robust the Kachi project is, which could potentially be enhanced with a production expansion. Significant new production is required to meet the forecast growth in demand from EVs and energy storage over the next 10 years,” said Managing Director Steve Promnitz.
At present, the PFS details a production target of 25,000 tonnes per annum of lithium carbonate.
“The Kachi project remains highly scalable and the company is working towards an expansion which would make it globally significant in terms of high purity lithium carbonate production, and well-positioned to supply the expected deficit in battery grade product over the next few years,” said Steve.
“This is an important differentiator of Lake as it continues to engage with major participants in the battery materials supply chain and electric vehicle makers. These participants are seeking high purity product, that can be scaled up to meet demand and has a measurable ESG benefit,” he concluded.
Shares last traded at 35 cents.