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Key points
- Lake is almost doubling the production base case for its Kachi Lithium Project to 50,000 tonnes per annum
- The previous production base case was 25,500 tonnes per annum
- Increasing demand was a driver of the decision
The Lake Resources N.L. (ASX: LKE) share price has been a positive performer on Wednesday despite the market weakness.
In morning trade, the lithium developer's shares are up 5% to $1.00.
Why is the Lake Resources share price rising today?
Investors have been bidding the Lake Resources share price higher this morning following the release of an update on its Kachi Lithium Project in Argentina.
According to the release, following recent activities , the company confirms that the production base case for Kachi will be increased to 50,000 tonnes per annum lithium carbonate equivalent (LCE) in the Definitive Feasibility Study (DFS) and the final investment decision (FID). This is almost double its previous base case of 25,500 tonnes.
Management advised that there were four reasons for the increase. One of these was the increasing demand by prospective offtake partners for a secure supply chain of environmentally friendly high purity lithium carbonate.
In addition, the company notes indicative support to fund the project by Export Credit Agencies and the international bank panel. The UK and Canada Export Credit Agencies have already indicated a willingness to provide debt finance for around 70% of the project's capital requirements.
Another driver of the decision was the supportive investment policies of the Argentine Government, which has announced a process to lower export taxes as part of the Strategic Plan for Mining Development.
Finally, the confidence of technology partner Lilac Solutions that its modular direct lithium extraction technology is scalable and cost effective also supported the decision.
Lake Resources' Managing Director, Steve Promnitz, commented: "Given the increasing demand and the significant lithium supply gap, Lake is focused on delivering high purity lithium carbonate at scale with meaningful ESG benefits. Lake has received indicative financial support for an increase in the size of the Kachi project from the Export Credit Agencies (ECA's) of the UK and Canada and the numerous international ECA-supported banks. Also, Lake's technology partner, Lilac Solutions, is focused on advancing the Kachi Project at this larger scale."
