Why is the Lake Resources share price tumbling again?

The Lake Resources N.L. (ASX: LKE) share price has continued its slide on Friday.

In afternoon trade, the lithium developer’s shares are down almost 3% to 90 cents.

This means the Lake Resources share price is now down approximately 30% since this time last week.

Why is the Lake Resources share price falling?

Investors have been selling down the Lake Resources share price today amid another market selloff.

The selling has been strongest in higher risk assets such as lithium shares. This has seen the likes of Liontown Resources Limited (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS) fall 5% and 3%, respectively, today.

What about the rest of its declines?

Also weighing particularly heavily on the Lake Resources share price this week has been news that a dispute has arisen between the company and its partner Lilac Solutions.

The company revealed that the dispute relates to the date by which certain milestones need to be achieved for Lilac to earn a 25% stake in the Kachi Lithium Project. Lake believes that these milestones must be achieved by 30 September, whereas Lilac believes it has until 30 November to do so.

To resolve the dispute, Lake has exercised its rights to have the dispute resolved either by agreement of both Lake and Lilac or by arbitration.

This is particularly worrying for investors as Lake’s Kachi project is highly dependent on Lilac’s unproven DLE technology. In fact, it recently commented on Lilac’s technology. It said:

Lake believes DLE will become the primary method of lithium extraction because it is the only practical way to ramp up lithium supply sustainably and in a way that conforms to increasing ESG scrutiny on lithium projects.

However, in the lithium industry not all DLE processes are the same. This is why Lake has taken the time to identify the process that is not only most efficient but also delivers a product that represents the most socially and environmentally sustainable approach to lithium extraction through ion exchange DLE and brine managed reinjection.

Investors will no doubt be hoping that this dispute doesn’t impact the partnership. But time will tell if it does.

The post Why is the Lake Resources share price tumbling again? appeared first on The Motley Fool Australia.

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More reading

• Why Lake, Pushpay, South32, and Tyro shares are dropping
• Lake Resources share price continues to dive, down 24% in a week
• How are ASX lithium shares faring amid Wednesday’s carnage?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Lake Resources, Lovisa, Megaport, and St Barbara shares are dropping

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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