How Does the Kachi Project Contribute to Lake Resources' Overall Business Strategy?
Kachi Phase One DFS: Lake Resources Unveils Exceptional Results
Lake Resources N. L. (Lake) has announced its Phase One Definitive Feasibility Study (DFS) results for the Kachi Lithium Project, marking a significant milestone in the company's journey. The presentation, intended for investors, highlights the potential of the Kachi Project, located in the Goldfields region, east of Kalgoorlie.
Key Financial Highlights of Kachi Phase One DFS
The post-tax Net Present Value (NPV) of the project is estimated at $2. 3 billion, with an Internal Rate of Return (IRR) of 21%. The project forecasts an annual average EBITDA of $635 million, indicating robust profitability.
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Capital Expenditure and Operational Costs
The capital expenditure (Capex) for the project is projected to be $1. 38 billion, with operating expenses (Opex) estimated at $6. 05 per kg of Lithium Carbonate Equivalent (LCE).
Significant Lithium Resource
The Kachi Project boasts a total resource estimated at more than 10. 6 million tonnes of LCE, positioning it as a globally significant resource. The project includes a 25-year mine life supported by the maiden Ore Reserve statement.
Process Plant and Demonstration Campaigns
Between October 2022 and November 2023, demonstration plant campaigns processed 5. 2 million liters of brine, producing over 200,000 liters of lithium chloride eluate. The plant achieved over 1,300 kg of >99. 5% purity lithium carbonate, showcasing the efficiency of the process design.
Updated Resource Estimates
The JORC update in November 2023 indicated a substantial increase in Measured and Indicated Resources. This update underscores the project's potential for further resource expansion.
Ore Reserve Statement
The Ore Reserve statement details the Proved and Probable reserves, providing a solid foundation for the project's 25-year life span.
Market Demand and Price Projections
The lithium market is anticipated to face deficits in the near term, with demand for battery-grade lithium expected to remain strong. Price forecasts by Wood Mackenzie suggest a long-term robust market for lithium carbonate.
Strategic Developments and Next Steps
Lake Resources has engaged Goldman Sachs as a Financial Adviser for the strategic delivery of the Kachi Project. This move is aimed at securing binding offtake agreements and strategic investments.
The company plans to submit the Environmental and Social Impact Assessment (EIA) in early 2024, emphasizing strong community and government engagement.
The Kachi Phase One DFS showcases Lake Resources' commitment to developing a significant lithium resource with strong financial prospects. The company's strategic planning, coupled with its emphasis on community and environmental considerations, positions the Kachi Project as a potentially transformative venture in the lithium market. As Lake Resources moves towards production, the Kachi Project stands as a testament to the company's innovative approach and promising future in the lithium industry.
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