Is ASX 200 share Lake Resources selling any lithium yet?

Lake Resources N.L. (ASX: LKE) is one of the S&P/ASX 200 Index (ASX: XJO)’s newest lithium shares, having joined the iconic index in June.

The company operates its flagship Kachi Project, located in Argentina’s lithium triangle. Interestingly, no mining is ever expected to be done at Kachi.

Instead, the company is working to extract lithium from brine at the project using direct extraction technology from its partner Lilac Solutions.

But is Lake Resources selling any lithium yet? And if not, when will it begin? Let’s take a look.

Right now, shares in Lake Resources are trading for $1.07.

Is ASX 200 share Lake Resources selling lithium?

Unfortunately for investors seeking out producing ASX 200 lithium shares, Lake Resources doesn’t quite fit the bill. However, hope is on the horizon.

Kachi’s lithium processing demonstration plant began processing brine earlier this month. More excitingly, it’s already delivered product at spec and is achieving 80% lithium recoveries.

Lithium chloride from the demonstration plant is expected to be converted to lithium carbonate and qualified by a tier one battery maker in the near future. Previous pilot plant activities have produced lithium with 99.97% purity.

The next step will see the demonstration plant move into a steady state before being validated by a third party. That will allow for the completion of its definitive feasibility study.

The project is targeting 50,000 tonnes of production per annum in the future.

That’s already been snapped up under conditional agreements with WMC Energy and SK On, covering respective terms of 10 years and five years.   

Lake Resources is set to make a final investment decision on the project next year. Of course, that means the maiden sale of Kachi lithium is probably still some time away.

There is one factor, however, that might ease the market’s minds. The ASX 200 lithium share holds no debt. That’s despite it burning through cash without any notable income.

Lake Resources had $158.9 million of cash at the end of September. It recorded a $9 million outflow from operating activities for the September quarter.

Additionally, the Kachi Project’s pre-feasibility study found it could be a high margin project, with an earnings before interest, tax, depreciation, and amortisation (EBITDA) margin of 62% and operating costs of US$4,178 per tonne.

The post Is ASX 200 share Lake Resources selling any lithium yet? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Can ASX lithium shares really keep dining out at these price levels?
• Here are the top 10 ASX 200 shares today
• Why is the Lake Resources share price leaping 5% today?
• Why is the Core Lithium share price having such a top run on Friday?
• Why Block, Lake Resources, Pendal, and Xero shares are dropping today

Motley Fool contributor Brooke Cooper 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.

from The Motley Fool Australia https://ift.tt/hjlmBIg