ASX-listed Lake Resources on Wednesday announced a sale agreement with Austroid to sell three of its lithium brine assets in Argentina for $9-million.

The assets, including tenements at Paso de Jama, Olaroz and Cauchari, are considered noncore to Lake's strategic focus as the company shifts its attention to advancing its flagship Kachi project.

The sale will provide Lake with nondilutive liquidity, which the company said it would use to support its financial position and further develop the Kachi project, a major lithium brine resource located in the Catamarca province.

“Given that Kachi is a premier tier-one asset with a total resource estimate exceeding 10.6-million tonnes of lithium carbonate equivalent and strong economics, the company has decided to focus all of its resources on the project,” said Lake CEO David Dickson.

“We have more than enough brine at Kachi for a 25-year project with potential for expansion,” he added.

The sale follows a competitive process aimed at maximising value for shareholders. Dickson said the $9-million deal was a strong outcome for Lake and would allow the company to streamline its portfolio.

Dickson also said that Lake had positioned itself with a robust financial runway. As of September 30, 2024, the company reported cash reserves of A$17.5-million. After the asset sale, Lake’s proforma cash position would be A$31.1-million. The company also had the ability to raise additional capital, positioning it well for continued growth through 2026.

“Our financial position is strong with no debt and no major capital commitments, and we have right-sized the business to reflect the current lithium market conditions,” Dickson stated.

SECTOR OUTLOOK
Meanwhile, Lake said the lithium sector had seen growing investor interest from global markets, including the US, Europe, China and the Middle East. This surge in interest was partly driven by improved investing conditions in Argentina, following the introduction of the Promotional Regime for Large Investment.

Dickson pointed to Rio Tinto’s recent acquisition of Arcadium as a sign of the sector’s strong prospects and the strategic value of Argentine lithium assets.

“The increasing interest in lithium plays from global investors underscores the strategic value of Argentinian lithium assets,” said Dickson. “Rio Tinto's acquisition of Arcadium reflects this sentiment.”

The Kachi project, one of the largest direct lithium extraction (DLE) brine resources in Argentina, is positioned as a key asset in the rapidly growing lithium market. Lake's focus on DLE technology, which promises higher lithium recovery rates with improved environmental benefits, positions Kachi as a critical part of the company's future.

“Our testing demonstrates significantly higher lithium recovery rates with markedly improved environmental benefits through lower water and land usage and reduced waste compared to alternative lithium extraction methods,” said Dickson.