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Lake clears up Lilac dispute

Monday, November 21st, 2022

Lithium developer Lake Resources has reached an agreement with its development partner Lilac Solutions to set aside differences in the development of the Kachi pilot plant, in Argentina.

A dispute emerged in September over the timeline for the development of the pilot plant, with Lake and Lilac butting heads over the timing of a milestone which would earn Lilac a 25% interest in the project.

Lake told shareholders on Monday that the two companies had now concluded dispute resolution in the form of a contract amendment, which allows the teams to reset the relationship and jointly focus on delivery.

In resolving the dispute, Lake and Lilac have agreed to an amended timeline which both are confident can be achieved; as before, Lake will have certain buy-back rights if Lilac does not meet agreed testing criteria in a timely manner.

“We are fortunate to be working with Lilac as our partner, who is equally interested in doing things differently so we can efficiently deliver the large volumes of high-quality lithium chemicals needed by battery makers,” said Lake CEO and MD David Dickson.

“Importantly, this lithium can be produced cleanly and in a way that respects and involves local communities and protects the environment. Lilac has worked extensively with Kachi brine since 2020, generating the data needed for engineering studies. These next steps, along with the strong alignment of our companies, are quite encouraging,” he added.

The Demonstration Plant has now produced more than 15% of the total Demonstration Plant forecast output in the short period since the plant came online this quarter. Some 20 000 l of lithium chloride have been produced to date and ongoing production is proceeding, consistent with the demonstration plant’s planned operational schedule.

A previously completed updated prefeasibility study estimated that the Kachi project could produce 25 500 t/y of lithium carbonate over a mine life of 25 years, with capital costs estimated at $540-million.

A definitive feasibility study, currently under way, will consider a production case of 50 000 t/y, given the increased demand from potential offtakers.

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