Lake Resources has received a formal expression of interest from UK Export Finance to fund 70 per cent of the Kachi lithium project in Argentina.
The funding will lead to lower costs than traditional financing structures, with the capital to be repaid over an 8.5-year period after the project is constructed.
UK Export Finance is the United Kingdom’s official export credit agency.
According to the expression of interest, the funding could expand plant production to 50,000 tonnes per annum of high-purity lithium carbonate.
Lake Resources stated this would meet growing lithium demand from battery and electric vehicle makers.
The expression of interest is subject to standard project finance terms and due diligence including offtake contracts and the completion of Kachi’s definitive feasibility study (DFS).
Lake Resources managing director Steve Promnitz said the offer marks a significant milestone for the progression of Kachi.
“This offer is a watershed moment for Lake – to have a leading ECA (export credit agency) willing to indicate financial support for Kachi provides an enormous vote of confidence in our clean energy project.
“We acknowledge that we have significant work to convert this EOI into a committed funding arrangement.
“Essentially this EOI is stating that if Lake does what it says it’s going to do in the ESIA (environmental and social impact assessment), the project will be funded.
“Combined with backing from potential international off-takers, investors will increasingly see progress towards successful production and expansion of Kachi, perfectly timed to meet the needs of a decarbonising world.”
The Kachi project is located in Argentina’s Lithium Triangle and is expected to provide high-purity battery materials.
It is located on a 70,000-hectare lease holding with a maiden resource of 4.4 million tonnes.
Lake Resources’ market capitalisation is $617.7 million with its share price up by 10.43 per cent to $0.64 per share on the ASX at the time of writing.