Lake Resources further strengthens financial position with sale of non-core assets

In This Article:

SYDNEY, Nov. 13, 2024 /PRNewswire/ -- Lake Resources N.L. (ASX:LKE; OTC:LLKKF) (Lake or the Company) is pleased to announce that a wholly-owned subsidiary of Lake has entered into an asset sale agreement with Austroid Corporation for the sale of three of its non-core lithium brine assets in Argentina for $9 million USD (approximately $13.6 million AUD) (Transaction).

The non-core assets included in the Transaction are lithium brine tenements and related assets located in Jujuy Province, Argentina; namely Paso de Jama, Olaroz, and Cauchari.

The Transaction will provide Lake with additional, non-dilutive liquidity and the funds will be used to support the Company's financial runway to continue its focus on progressing its flagship asset, the Kachi Project (Kachi or the Project).

"Given that Kachi is a premier tier-one asset with a total resource estimate exceeding 10.6 million tonnes of lithium carbonate equivalent (see ASX Announcement on 22 November 2023) and strong economics, the Company has decided to focus all of its resources on the Project," Lake CEO David Dickson said.

"We have more than enough brine at Kachi for a 25-year project with potential for expansion."

Mr Dickson said that Lake conducted a competitive process to maximize value and the USD $9 million was an excellent result for shareholders. The sale reflects Lake's commitment to maintaining a focused and efficient portfolio.

The Transaction also further positions Lake to advance Kachi and benefit from an evolving lithium market landscape – especially in light of recent industry developments.

"Lake remains focused on securing high value strategic partnerships and offtake agreements to bolster Kachi's development," Mr Dickson said.

On the Financial Runway:

Mr Dickson said that Lake had no debt or other major capital commitments and had aggressively right sized the business for the current lithium commodity price environment. With cash on hand as at 30 September 2024 (approximately $17.5 million AUD, see ASX Announcement on 30 October 2024) and the expected proceeds from the Transaction, the Company's pro-forma cash position is approximately $31.1 million AUD. With additional capital raising capacity available to the Company, Lake is well positioned with strong financial liquidity into 2026.

Approval by the shareholders of the additional placement capacity under ASX Listing Rule 7.1A as requested by the Company at the upcoming Annual General Meeting would also further enhance the Company's liquidity position.