PERTH (miningweekly.com) – Canada’s Export Credit Agency (EDC) has issued lithium developer Lake Resources with a letter of interest to work alongside the UK Export Finance to potentially fund up to 70% of the finance required for the Kachi lithium brine project, in Argentina.
“Having Canada’s direct sovereign lending alongside the UK’s sovereign considerably de-risks the project for the investors and the international banks who continue to express strong interest to be part of Kachi’s development,” said Lake MD Steve Promnitz on Tuesday.
“Admittedly, Lake has significant work to convert these expressions of interest into committed funding arrangements, However, these expressions of interest are a road map and if Lake does what it says it’s going to do in the definitive feasibility study and environmental and social impact assessment, the project will be funded.
EDC has indicated its ability to provide direct lending to the project up to $100-million, subject to sourcing requirements.
EDC’s letter of intent does not increase the level of potential project finance available from export credit agencies for the project, but does increase sourcing flexibility, greater access to low-cost direct lending, and confidence around shared financing for the project, Lake said on Tuesday.
A definitive feasibility study on the Kachi project is due in the second quarter of next year.
A previously completed updated prefeasibility study estimated that the project could produce 25 500 t/y of lithium carbonate over a mine life of 25 years, with capital costs estimated at $540-million.