Lake Resources NL - LLKKF stock

Introduction to the Company

Lake Resources N.L. (OTC: LLKKF, ASX: LKE) is an Australia-based clean lithium company that explores and develops lithium projects in Argentina. The company employs clean, direct technology in the development of the resource. Its projects include Kachi, Cauchari, Catamarca, Pegmatite, Olaroz, and Paso. The firm's three projects stretch 2,200 square kilometers within the Lithium Triangle, producing 40% of the world's lithium at the lowest costs. It owns 100% interest in the Kachi lithium brine project. The flagship project contains 39 mining leases covering approximately 74,000 hectares of land in Catamarca province. The firm was founded in 1997 and is headquartered in Sydney, Australia. Its common shares are publicly listed on the Australian Securities Exchange (ASX) under the LKE code, on the Frankfurt Stock Exchange (FRA) under the LK1 symbol, and on the OTC QB market under the LLKKF ticker.

Business Operations

Lake Resources is committed to generating and improving shareholder value by developing clean, high-purity, and responsibly sourced lithium from its portfolio of projects stationed in the Lithium Triangle of Argentina. The company, along with Lilac Solutions, its partner, uses clean technology and a direct extraction procedure to harvest lithium from its assets. The direct approach has historically been used since the 1940s. The process' adaptation of ion exchange technology significantly reduces lithium processing costs and timeline. The conventional evaporation approach consumes between nine months and two years to produce below 50% of lithium recoveries. On the other hand, Lilac's method rapidly produces high-purity lithium brine in under three hours with minimal environmental impact. Testing on the Lilac's extract in January 2020 indicated the presence of very high-purity lithium carbonate, with 99.9% purity, 0.04% above the industry standard battery-grade purity. The direct extraction approach interests numerous E.V. makers (OEMs) and battery manufacturers as it provides a scalable supply chain for battery raw materials. Lake plans to establish an on-site plant at its Kachi project to capitalize on the opportunity.

Projects

Kachi Project. The project comprises 705 square kilometers of leases and lease applications over a brine-bearing basin 15km wide, 20km long, and 400-800m deep centered. A pre-feasibility study conducted on the asset in 2020 showed it had great potential to become a long-term, low-cost venture, advancing an estimated 25,500 tonnes of annual battery-grade lithium carbonate.

Cauchari Project. The 100% owned asset occupies approximately 480 square kilometers in Jujuy Province, Argentina. Results from drilled samples of the asset in August 2019 indicated the presence of significant high-grade lithium, with higher grades averaging 493 mg/L lithium over 343m and the highest reaching 540 mg/L lithium.

Olaroz Project. It is located in Jujuy province near Lithium America’s Cauchari Project, which has the world's largest defined lithium brine deposits. It has the potential of becoming a standalone project with new proposed drilling activities underway.

Paso Project. The project spans about 290 square kilometers and awaits drilling and chemistry sampling to determine its lithium brine-bearing potential.

Catamarca Project. It is 100% owned by Lake and covers 720 square kilometers. An LRS drilling program in the second quarter of 2017 resulted in high grades from relatively narrow widths, with intercepts of 7m at 2.17% Li2O, 6m at 2.40% Li2O, 5.2m at 1.62% Li2O, and 3m at 2.98% Li2O. The company has planned further drilling on the asset.

Recent Company and Industry Updates

Lake released its quarterly cash flow report for the quarter that ended December 31, 2022, on January 27, 2023. Operational highlights of the quarter include:

• Maintained healthy funding with a $A133 million cash balance and zero debt as of December 31, 2022
• Added several sector-leading capital markets, industry, and governance experts to the board to strengthen its strategic, financial, operational, and ESG dockets
• Signed Offtake and Strategic Investment Conditional Framework Agreements with WMC Energy and SK On for a maximum of 50,000 tpa lithium carbonate from its Kachi Project
• The company reported a 100% increase in mineral resource presence (2.2 million tonnes of lithium carbonate and 3.1 million tonnes of infrared elements) to the ASX on its Kachi asset after thorough drilling on the property.
• Lilac Solutions retrieved 40,000 liters of lithium chloride after 1000 hours on the Demonstration Plant, achieving all pre-agreed milestones.

The firm’s executive communicated that the company was exiting the evaluation and exploration phase and moving into the next development phase.

On July 28, 2022, Simply Wall Street released an article about Lake Resources, focusing on when investors can anticipate growth and profitability in the company. According to the two industry analysts, the firm is expected to incur its final loss in 2023 and record an estimated AU$ 1.6 m profit in 2024. A backward approach by the analysts forecasted an average of 99% year-on-year growth for the company.

Management

Lake’s management team boasts robust international experience in accounting, finance, human resources, law, and community engagement.

Peter Neilsen, Chief Financial Officer

• A C.A with over 20 years of in asset management, financial management, and leadership
• Has served in an array of senior positions, including company secretary, CFO, financial manager, and more for several listed and unlisted energy and natural resources sector companies, e.g., Barrick, Xstrata, and Round Oak
• Has led the company to a $100M operational expense reduction via practical cost analysis, performance adjustments, and contract negotiations
• Made acquisitions of up to $80M and achieved revenues above $5Billion.

Sean Miller, Corporate Development Officer

• An experienced commercial executive in mining companies with skills in contracts and procurement, project execution,
• Appointed in august 2022 to steer development in the company’s four lithium brine projects, project optimization, and supply chains
• He was previously the head of commercial operations for The Carmichael Rail Project in Queensland, Manager of Contracts & Procurement for Glencore’s North Queensland Metals, and Director of Commercial Development at the Kamoto Copper Company Copper and Cobalt mine in Katanga province, DRC.

Other executive officers include John Freeman, Chief Legal Officer & General Counsel; Mark Anning, Head Of Legal, Australia, and Company Secretary; Gentry Brann, Chief People, and Administration Officer; Amalia Sáenz, Vice President of Argentina Corporate Affairs; Karen Greene, Senior Vice President – Investor Relations and Communications, and Scott Munro, Senior Vice President – Technology, Strategy, and Risk.

Corporate Governance and Sustainability

The company's governance structure aims to ensure accountability, minimize risk, enhance investor confidence, and promote ethical conduct. Lake's employees are charged with reducing risk in the workplace and reporting any environmental concerns to the management. The company is committed to incorporating sustainable development measures to reduce its ecological footprint and contribute to the global clean energy dream. Lake focuses on establishing healthy relationships with all stakeholders to efficiently manage the economic, environmental, and social impacts of its operations.

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OTC Symbol: LLKKF | OTC Tier: OTCQB