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Lake Resources looks to replicate rivals' success at Argentine lithium project

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Lake Resources looks to replicate rivals' success at Argentine lithium project

Lake Resources NL said recent drilling results at its Cauchari lithium brine project in Argentina highlighted its potential to replicate the success of similar projects in the same basin.

The company announced May 28 that sampling in the upper section of a drillhole at about 186 meters deep showed conductive brines with lithium values up to 480 milligrams per liter.

These results echo similar lithium brine horizons in the upper sections of drillholes reported from Lithium Americas Corp. and Ganfeng Lithium Co. Ltd.'s Cauchari-Olaroz project and from Advantage Lithium Corp. and Orocobre Ltd.'s Salar de Cauchari property. Both are in the preproduction phase.

Salar de Cauchari's CAU15D drillhole returned 450 milligrams per liter lithium from about 204 meters deep just 350 meters from Lake's Cauchari project. The Cauchari-Olaroz project's PE-09 drillhole 500 meters from Lake's drilling area returned 741 milligrams per liter lithium.

Lake was also encouraged by the diamond drill rig traveling below 255 meters deep as it passed a challenging section of high fluid pressures and sands at about 230 meters, which had previously caused drilling problems.

The hole is targeting a sand horizon estimated to be between 350 and 450 meters that has recorded higher lithium values and fluid flows in the adjoining projects.

SNL Image

Diamond drill rig at Lake Resources' Cauchari lithium project in Argentina.

Source: Lake Resources

Managing Director Steve Promnitz said in a May 28 statement that the result is a "watershed moment" for the company, confirming proof of concept for Cauchari and highlighting its potential to replicate the success of the two nearby projects.

The company is also continuing discussions with potential funding partners in Asia and North America for project development for Cauchari and its other Argentine project, Kachi.

Promnitz said in an interview that Lake was close to securing a development partner for Kachi late in 2018 before lithium sentiment softened, but he believes that the company is now close to closing a deal.

Lake announced May 7 that design and engineering for a pilot plant started for Kachi using Silicon Valley-backed Lilac Solutions Inc.'s direct extraction technology, which is cheaper and more environmentally friendly than the traditional evaporation pond method of getting lithium from brines.

Lilac produced a phase-one engineering study in December 2018 that showed "globally competitive" production costs of about US$2,600/t. This puts it in the lowest-cost quartile for lithium carbonate production using a commercial-sized production plant.

A pilot plant is expected to be commissioned late this year. Promnitz said this new technology is making his company more attractive to Silicon Valley investors.

Lake is following the project development and business model used by Orocobre, which Promnitz said was the first Australian lithium company to achieve success amid considerable obstacles after the lithium boom first hit the ASX a decade ago.

He said Orocobre had a quality project and was able to line up "one of the best battery makers" in Panasonic Corp. in 2010, from which stemmed commodities trader Toyota Tsusho Corp.'s involvement in 2012 to help develop its Olaroz project.

Kachi has an indicated and inferred resource of 4.4 million tonnes of lithium carbonate equivalent within a much larger exploration target covering about 69,000 hectares over an almost entirely lithium-bearing salt lake in Catamarca province.