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Lake Resources Quarterly Report Ending 31 March 2020

Lake Resources provides a review of activities over the last quarter, to March 31, 2020.

HIGHLIGHTS

  • Compelling and robust Pre-Feasibility Study (PFS) results for Kachi Lithium Brine Project in Argentina, show project capable of producing sustainable highpurity lithium carbonate to attract premium pricing.
  • Long life, low cost operation with 25,500tpa LCE using Lilac Solutions’ innovative sustainable direct extraction method at competitive operating and capital costs.
  • Post-tax NPV8 of US$748 million (A$1,180m) and IRR of 22% with high margin EBITDA of US$155 million (A$245m) in first full year of production
  • High purity battery grade lithium carbonate samples (99.9%) demonstrated from Kachi Project brines with more samples for off-takers in coming months.
  • 20,000 litres of brines from Kachi to Lilac’s pilot plant module in California, with additional 20,000 litres in transit to meet demand from potential off-takers.
  • Technology partner, Lilac Solutions, announced US$20m backing from Breakthrough Fund and MIT’s The Engine fund.
  • Discussions continue for debt funding of US$10m to US$25 million for DFS, permitting and lithium preproduction for the Kachi Project.
  • Capital raising completed with a A$3.4m private placement and a Share Purchase Plan. The A$1.96m convertible securities facility was paid out.
  • Limited impact from restrictions imposed due to COVID-19; operations continuing with increased personal protection and heightened security based on government guidelines.

Lake Resources NL (ASX:LKE) is an exploration and development company, developing its flagship 4.4mt LCE resource Kachi Lithium Brine Project in Argentina, to produce sustainable high purity lithium carbonate using an efficient, disruptive and low cost direct extraction technology from our partner, Lilac Solutions, in California. The pilot plant module is operating in California to produce sample for potential offtake partners using brines from the Kachi Project, and after completion, a full pilot plant will be constructed and transported for operation later in the year on site at Lake’s Kachi Lithium Brine Project

Battery grade lithium carbonate (99.9% purity) with very low impurities was produced from the pilot plant and announced in January 2020 from lithium bearing brines sourced from the Kachi Project. Very low impurity products are demanded by the latest technologies used by lithium battery/cathode makers. Larger volume samples are expected to be delivered in Q2 2020 to a number of downstream participants for customer qualification purposes although this was delayed slightly due to COVID-19 operational adjustments.

Lilac Solutions technology gained the investment support of the Bill Gates-led fund, Breakthrough Energy, leading an investment round of US$20 million in February 2020. Breakthrough Energy Ventures looks to invest in startups that are capable of cutting emissions. The fund’s investors include high profile investors who have successfully backed disruptive technologies. MIT’s The Engine fund is another key investor in Lilac.

A robust and compelling pre-feasibility study (PFS) was delivered over the Kachi Lithium Brine Project, which hosts a major resource. A long-life, low cost operation was demonstrated with annual production target of 25,500 tpa of battery grade lithium carbonate by direct extraction using Lilac Solutions technology. The PFS showed the technology is cost competitive with other lithium brine projects but also showed the advantage of producing a premium product generating high operating (EBITDA) margins using conservative price forecasts. The results indicate the need for a definitive feasibility study looking at further opportunities to lower opex and capex costs potentially with a staged start at 10,000tpa.

The Flagship Kachi Project is one of three brine projects Lake owns 100% in the heart of the Lithium Triangle in Argentina, a world-class region alongside all 5 major lithium producers, which produces 40% of global production at the lowest cost. Lake owns over 200,000 hectares (0.5 million acres) of leases including one hard rock project.

Lake’s Cauchari Project in Jujuy Province was drilled for the first time in 2019 and confirmed similar grades and lithium brines extend into Lake’s properties from the adjoining Ganfeng/ Lithium Americas Cauchari project which is rapidly progressing to production in late 2020 at 40,000tpa LCE. The pilot plant, once having completed activities at Kachi, could be then used for the Cauchari project, or at Lake’s mining titles at the Olaroz project, adjoining Orocobre’s production (ASX:ORE).

Click here to read the full report.

Click here to connect with Lake Resources NL (ASX:LKE) for an Investor Presentation

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Lake Resources CEO Stephen Promnitz: Scaling Lithium Supply with $150 Million Series B Funding

Lake Resources Managing Director Stephen Promnitz

Lake Resources (ASX:LKE,OTCQB:LLKKF) Managing Director Stephen Promnitz says Lake Resources has secured robust financing to scale up lithium production in preparation for the electric vehicle revolution.

Lake Resources has recently established a technology and funding partnership with Lilac Solutions, and the latter has announced $150 Million Series B to scale lithium supply for the electric vehicle era.

Lake Resources: Scaling Lithium Supply with $150 Million Series B Funding www.youtube.com

"Lilac Solutions are actually going to work with us and progressively earn into our flagship Kachi project, and then provide $50 million towards the development of that project. So come the end of October, we should have somewhere around $70 to $80 million in the bank, plus this $50 million commitment from Lilac going forward. And then if we have some additional $75 million options in June next year. Essentially, we can now see a pathway to the entire project being financed," Promnitz said.

Lake Resources and Lilac Solutions signed a partnership agreement wherein Lilac is able to achieve an equity stake in the Kachi project with project funding obligations while providing its leading technology to advance the project.

"There's a real deal here, and now value opportunity. But on top of that, we've de-risked it from the debt side and from the equity side. This project is going to happen, and not only that, we're going to be scaling it up to 50,000 tonnes per annum soon after we get into production. That will make us one of the top five producers in the lithium space."

Watch the full interview of Lake Resources Managing Director Stephen Promnitz above.

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Ioneer Ltd is pleased to announce that the Company has reached an agreement to establish a joint venture with Sibanye Stillwater Limited to develop the flagship Rhyolite Ridge Lithium-Boron Project located in Nevada, USA . Under the terms of the agreement, Sibanye-Stillwater will contribute US$490 million for a 50% interest in the Joint Venture, with ioneer to maintain a 50% interest and retain operatorship. ioneer …

Ioneer Ltd (“ioneer” or the “Company”) (ASX: INR) is pleased to announce that the Company has reached an agreement to establish a joint venture (the ” Joint Venture “) with Sibanye Stillwater Limited ( “Sibanye-Stillwater” ) to develop the flagship Rhyolite Ridge Lithium-Boron Project located in Nevada, USA (the “Project” ). Under the terms of the agreement, Sibanye-Stillwater will contribute US$490 million for a 50% interest in the Joint Venture, with ioneer to maintain a 50% interest and retain operatorship. ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North Basin 1 upon the election of Sibanye-Stillwater to contribute up to an additional US$50 million subject to certain terms and conditions.

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Galaxy Resources Limited advises that the following announcement has been made to the Australian Securities Exchange which appears on the Company’s platform : Merger of Galaxy and Orocobre Implemented The announcement can be viewed at: SOURCE Galaxy Resources Limited View original content

Galaxy Resources Limited (ASX: GXY) ( Company ) advises that the following announcement has been made to the Australian Securities Exchange which appears on the Company’s platform (ASX):

  • Merger of Galaxy and Orocobre Implemented

The announcement can be viewed at:

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carbon emissions

Following international pressure, the Australian government has promised to reach net zero emissions by 2050.

In a last-minute commitment after months of debate, the Australian government has promised to reach net zero emissions by 2050, expecting to meet the goal largely through technology development.

The move comes following international pressure as Australia had previously refused to join countries in pledging to meet the target ahead of the United Nations' COP26 climate conference in Glasgow.

However, the plan unveiled on Tuesday (October 26), which includes a government investment of AU$20 billion, does not strengthen the target set for 2030, with Prime Minister Scott Morrison saying Australia is on track to beat its Paris Agreement goal, cutting emissions by 30 to 35 percent by that decade.


"We will do this the Australian way," Morrison said ahead of a press conference, announcing investments in new energy technologies like hydrogen and low-cost solar.

An Australian hydrogen industry could be worth more than AU$50 billion in 2050, according to the government. Meanwhile, expanding production and processing of metals like lithium, nickel, copper and uranium could together be worth around AU$85 billion in exports in 2050.

That said, Australia will continue to be heavily dependent on fossil fuels as the plan will not shut down coal or gas production. The country is a major coal player, with the third largest reserves in the world, but its reliance on coal-fired power makes it one of the world's largest carbon emitters per capita.

"We want our heavy industries, like mining, to stay open, remain competitive and adapt, so they remain viable for as long as global demand allows," Morrison said. "We will not support any mandate — domestic or international — to force closure of our resources or agricultural industries."

Australia's desire to achieve net zero emissions by 2050 is a step in the right direction, Prakash Sharma, Wood Mackenzie's Asia Pacific head of markets and transitions, said.

"Our analysis shows that Australia can reach net zero emissions by 2050," he said. The country's major trading partners — China, Japan and South Korea — are already in transition towards that goal.

According to Wood Mackenzie, nearly 83 percent of Australia's power generation will come from solar and wind by 2050, as compared to about 20 percent last year. Natural gas, bio energy, geothermal and small modular reactors will supply the remaining 17 percent in power output. Coal into power is expected to be phased out by 2035.

"Although the pathway requires complete transformation of its traditional energy and export sectors, there are significant opportunities to capitalise on and protect future revenues," Sharma said.

"This will require Australia to become a significant player in low-carbon hydrogen trade as well as being able to offer carbon storage and offset services."

Meanwhile, the Australian Conservation Foundation has welcomed the prime minister's commitment to reach net zero by 2050, but said the mid-century goal is only meaningful with deep cuts to climate pollution this decade.

"Unless the government sets the wheels in motion to cut our emissions in half by 2030, it is making climate change worse and turning its back on the opportunities," said Chief Executive Kelly O'Shanassy.

"Australia can become a global clean energy superpower in the next decade by replacing coal and gas with renewable energy," she added. "We have abundant clean energy, tools and talent, but we cannot delay any longer."

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

map showing Victoria, Australia

The state of Victoria completed an inquiry on cannabis earlier this year. Will it actually change anything for the drug?

In August, the government of Victoria, Australia, released the results of its inquiry into the use of cannabis, taking into account 1,475 written submissions, dozens of expert witnesses and two minority reports.

A few months on, Australia-focused cannabis investors are wondering whether the document's findings will have an impact on cannabis use in the state, or even in the country as a whole.

The short answer? Probably not. But there's more to the story than that.


Why did Victoria conduct a cannabis inquiry?

Back in May 2019, Victoria's Legislative Council Legal and Social Issues Committee agreed to complete an inquiry on cannabis in the state. Although it was initially due for completion in March 2020, the deadline was extended twice, first to March 2021 and then again to August 2021.

Chaired by Reason Party Member of Parliament Fiona Patten, whose party supports legalising cannabis, the committee broadly looked at two streams of cannabis policy reform. One, the legalisation of cannabis for adult personal use, and two, a legalised and regulated cannabis market.

The report puts forth 17 recommendations and 21 findings, but Patten said after its release that the Labor-heavy committee banded together to water down certain recommendations prior to the drafting of the report.

For example, according to reports from the Age, the first recommendation of legalising cannabis for adult personal use in Victoria became "Recommendation 1: That the Victorian Government investigates the impacts of legalising cannabis for adult personal use in Victoria."

Evidence from the inquiry suggests that legalising cannabis would keep young and vulnerable people out of the criminal justice system, with state parliament estimates suggesting Victoria would save AU$725 million over 10 years in police and justice costs.

Key highlights from Victoria's cannabis inquiry

Recommendations from the report broadly fall several categories: investigating a legalised and regulated market; health and safety; and education for minors.

Here's a wrap up of the main items the Victorian government was told to look at:

  • Investigate the impact of legalising cannabis for adult personal use in Victoria.
  • Consider referring an inquiry to Victorian Law Reform Commission to investigate state and Commonwealth laws inhibiting legislation and regulation of the cannabis market.
  • Provide ongoing funding to alcohol and drug sector organisations for drug diversion programs, and further funding to areas in regional and rural Victoria.
  • Implement a road safety campaign about the dangers of driving under the influence of cannabis.
  • Look at alternative testing methods for "drug driving," as current methods mean THC can be detected in a person's system long after being "affected by the drug," especially in the case of medicinal cannabis patients.
  • Advocate to the National Cabinet to remove unnecessary barriers for accessing medicinal cannabis.
  • Seek expert help on school drug education, avoid stigmatising users and promote help-seeking behaviour.

Minority reports included in Victoria's inquiry

Liberal Democrat David Limbrick, who participated in the inquiry, was "extremely disappointed" with the last-minute changes mentioned above and submitted a minority report in favour of legalisation.

It broadly supports the public policy Liberal Democrats have towards cannabis which is: "The Liberal Democrats support the legalisation of use, cultivation, processing, possession, transport and sale of cannabis, with protection of minors and penalties for driving while impaired."

A second minority report is also included — it comes from the Liberals and Nationals, both of which are firmly against legalising cannabis in order to protect public health and children. Signed by three members, it states that legalising cannabis only provides ready access and no deterrent to prevent cannabis use. They further wrote:

"The Liberals and Nationals support drug education programs warning of the harms of illicit substances, we support diversion programs that help get people off drugs, and we support other support services for those addicted to drugs. However, we do not support legalising cannabis."

Victoria Police Assistant Commissioner Glenn Weir told the inquiry in June that the use, cultivation and trafficking of marijuana causes "significant harm," and said he is firmly opposed to legalisation.

Will the inquiry impact cannabis legalisation in Australia?

Any hopes of legalisation were quickly dashed after the report's release by Victorian Premier Dan Andrews, whose focus is on job creation and economic recovery from the coronavirus pandemic.

Speaking to reporters after it came out, he said he has "no intention" of legalising cannabis.

"If you want to know why, then have a look at the sections in the mental health royal commission that talk about dual diagnosis, drug-induced psychosis," he told reporters outside parliament.

"Others have a different view, they're entitled to have a different view, but as the leader of the government I've just made the government's position very clear."

The lack of support by major state parties for the Victorian inquiry may speak to a wider delay nationally for supporting decriminalising and legalising cannabis. Combined with the narrow defeat of the cannabis legalisation referendum in New Zealand, it does not look like legalisation is likely anytime soon.

Don't forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Ronelle Richards, hold no direct investment interest in any company mentioned in this article.