Lake Resources Quarterly Report Ending 31 March 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.
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• 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).

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