- Lake Resources’ (LKE) receives an expression of interest (EOI) from the UK Export Finance
- The UK-based export credit agency is interested in funding about 70 per cent of the total finance required for Lake’s Kachi Lithium Project in Argentina
- Lake Resources considers this as an “enormous vote of confidence” in its clean energy project as the demand for batteries and electric vehicles accelerates
- The EOI is subject to Lake completing a definitive feasibility study and an environmental and social impact assessment which is expected before the end of the 2022 March quarter
- Company shares are up 9.57 per cent to trade at 63 cents
Lake Resources’ (LKE) Kachi Lithium Project has generated some interest from the United Kingdom’s export credit agency (ECA).
The UK Export Finance (UKEF) submitted a formal expression of interest (EOI) to cover around 70 per cent of the Argentina-based project’s required funding.
In the last five years, the UKEF has provided £14 billion (A$26.3 million) of funding support for UK exports and international trade.
Lake Resources Managing Director, Steve Promnitz, said he was pleased to have received the interest.
“This offer is a watershed moment for Lake – to have a leading ECA willing to indicate financial support for Kachi provides an enormous vote of confidence in our clean energy project. The support reflects not only Kachi’s robust financials but also its considerable environmental, social and governance (ESG) benefits.”
The potential support provides a much lower cost of capital than traditional debt financing with the principal repaid over an 8.5-year period post-construction.
The EOI indicates the total funding could be increased to include 70 per cent of an expanded production plant to 50,000 tonnes per annum of high-purity lithium carbonate equivalent.
This aligns with the accelerating demand from leading battery and electric vehicle makers for sustainably produced and high-quality lithium.
The EOI is subject to some conditions such as structured offtake contracts, the completion of Kachi’s definitive feasibility study (DFS), and an environmental and social impact assessment (ESIA).
According to Lake, the DFS and ESIA are in the advanced stages and are expected to be completed by the end of the first quarter of 2022.
“Essentially, this EOI is stating that if Lake does what it says it’s going to do in the DFS and ESIA, the project will be funded. Combined with backing from potential international off-takers, investors will increasingly see progress towards successful production and expansion of Kachi, perfectly timed to meet the needs of a decarbonising world,” Mr Promnitz concluded.
Company shares were up 9.57 per cent to trade at 63 cents at 10:08 am AEST.