- Lake Resources (LKE) is butting heads with its earn-in partner, Lilac Solutions, over certain milestones for the Kachi project in Argentina
- The companies signed an agreement last year which would see Lilac earn up to a 25 per cent stake in the Kachi project by completing set work at the project
- However, the pair now disagree on when Lilac’s milestones need to be achieved, with Lake saying the deadline is September 30 and Lilac saying it has until November 30
- In response, Lake Resources has exercised its rights to have the dispute resolved either by mutual agreement or by arbitration
- Shares in Lake Resources are down 13.39 per cent to $1.10 at 11:34 am AEST
Lake Resources (LKE) has reported a dispute with its earn-in partner, Lilac Solutions, over the Kachi lithium project in Argentina.
Lilac is busy earning a 25 per cent stake in the Kachi project, based on achieving specific operational milestones. The companies signed a pilot project agreement in September 2021 for Lilac to provide technology, engineering teams and an onsite demo plant to the Kachi project in exchange for the stake.
Lake said while work had been continuing at Kachi, the partner companies have reportedly disagreed on when these milestones need to be achieved. Lake considers the milestones must be satisfied by September 30, and Lilac believes it has until November 30 to complete its obligations.
Lake said it would now work to resolve the dispute by either mutual agreement or by arbitration.
Lilac was selected as an earn-in partner due to its low-cost production process which offered higher lithium recovery rates than other technologies to produce battery-quality lithium carbonate of 99.97 per cent purity. At the same time, its process is considerate of the environment and water sources.
The specific milestones Lilac had to meet as part of the earn-in deal included the completion of 1000 hours of operations of the Lilac Pilot Unit and the production of a lithium carbonate feed totalling at least 2500 kilograms of lithium carbonate equivalents from onsite operations.
If the milestones aren’t achieved by the required date, Lake reportedly has certain buyback rights under the agreement, which it may exercise at its option.
Shares in Lake Resources were down 13.39 per cent to $1.10 at 11:34 am AEST.