Kachi lithium brine project, Argentina – update

8th March 2024 By: Sheila Barradas - Creamer Media Research Coordinator & Senior Deputy Editor

Kachi lithium brine project, Argentina – update

Photo by: Lake Resources

Name of the Project
Kachi lithium brine project.

Catamarca, Argentina.

Project Owner/s
Lithium developer Lake Resources.
Project Description

The Phase 1 definitive feasibility study on Kachi has demonstrated that it is a tier-one project. During this phase, production of 25 000 t/y over a 25-year life-of-mine will be targeted. 

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project boasts a pretax net present value, at an 8% discount rate, of $3.85-billion and an internal rate of return of 25.35%, with a payback of 4.25 years.

Capital Expenditure
Estimated initial capital expenditure for Phase 1 is $1.38-billion.

Planned Start/End Date
Kachi is targeting first lithium in 2027, with the ramp-up to full capacity by the end of 2028.

Latest Developments
Lake Resources has announced further cost reductions to extend its financial flexibility and better position the company to complete a strategic partner selection process for its Kachi project.

The company previously announced a 40% reduction in expenditure for the March quarter, but is now implementing further savings. These include reducing its workforce by 50% across its noncore operational and administrative staff, and additional streamlining of other general and administrative expenditures.

As a result of these actions, Lake expects a 30% reduction in expenditure in the June quarter, compared with the March quarter.

Goldman Sachs is acting as financial adviser to find a strategic partner for Kachi. Lake has reached out to a wide array of potential partners, including car and battery manufacturers, lithium producers, oil and gas companies, sovereign wealth funds and private equity.

The company expects the process to conclude in the second half of the 2024 calendar year, with a final investment decision to follow about nine to 12 months thereafter.

A definitive feasibility study (DFS) for Phase 1 of the Kachi brine project has shown strong and competitive economics. The DFS estimates a post-tax net present value of $2.3-billion and an internal rate of return of 21%. The Phase 1 development is estimated to require an initial capital expenditure of $1.38-billion.

Kachi's total resource is estimated at 10.6-million tonnes of lithium carbonate equivalent and the project has a projected mine life of 25 years. Phase 1 is expected to deliver 25 000 t/y of lithium.

Key Contracts, Suppliers and Consultants
Lilac Solutions (lithium extraction testwork); Hatch (engineering and design services); and Citi and JP Morgan (finance coordinators of the project).

Contact Details for Project Information
Lake Wells, tel +61 2 9299 9690 or email hello@lakeresources.com.au.