Kachi Lithium Project Cuts Capex 16%, Hits US$1.5B NPV with New DFS Addendum

Enhanced Resource and Technology Drive Project Upside

Lake Resources N.L. has unveiled its Kachi Phase One Definitive Feasibility Study (DFS) Addendum, marking a significant milestone in the development of its flagship lithium brine project in Argentina’s Lithium Triangle. The update reflects a notable increase in lithium brine grades, now set at a design basis of 249 mg/L, up from 205 mg/L in the original DFS, with indications that grades could reach as high as 268 mg/L. This improvement underpins enhanced extraction efficiency and project economics.

Central to these gains is the adoption of Lilac Solutions’ Gen 4 Direct Lithium Extraction (DLE) technology, which boosts lithium recovery rates from approximately 80% to 90%. The technology also reduces the number of ion exchange modules required by half, slashing capital and operating costs related to extraction and processing.

Cost Efficiencies and Streamlined Execution

The DFS Addendum reveals a capital expenditure (Capex) estimate of US$1.157 billion, representing a 16% reduction compared to the original DFS figures after adjusting for inflation. This is driven by multiple engineering optimizations including a 22% reduction in well count, a smaller plant footprint, and improved reagent and power consumption efficiencies. Operating expenses (Opex) have also been trimmed to US$5,895 per tonne of lithium carbonate equivalent, placing Kachi among the lowest-cost lithium brine projects globally.

Execution risk has been mitigated through a shift to a single-phase plant construction approach, enabled by confirmed grid power availability aligned with commissioning activities. The power supply Front End Engineering Design (FEED) has been completed in partnership with YPF-Luz, ensuring a technically viable and cost-effective power solution. Environmental permitting is progressing well, with the Environmental Impact Assessment (EIA) approval expected by the end of 2025.

Robust Financial Outlook Amid Market Dynamics

Financially, the project boasts a pre-tax net present value (NPV) of US$1.5 billion and an internal rate of return (IRR) of 22.5%, based on a conservative lithium price forecast averaging around US$20,500 per tonne of battery-grade lithium carbonate over the life of mine. Post-tax NPV stands at US$1.01 billion with an IRR of 19.7%, and a payback period of 4.5 years. These metrics reflect a disciplined approach, including the adoption of a 10% discount rate to better align with current market expectations.

Lake Resources is also positioned to benefit from Argentina’s new Incentive Regime for Large Investments (RIGI), which offers regulatory stability, tax advantages, and customs benefits for qualifying projects. This regime is expected to enhance the project’s financial resilience and attractiveness to investors.

Strategic Positioning and Next Steps

With a total measured and indicated resource of 11.1 million tonnes of lithium carbonate equivalent, Kachi stands as one of the largest independent lithium developments in the Lithium Triangle. Lake Resources continues to advance strategic partnerships and maintain a strong liquidity position, holding approximately A$12.37 million in cash as of June 2025 and no debt.

Looking ahead, the company aims to secure final EIA approval, complete its strategic review, and progress toward a final investment decision (FID). The combination of improved resource quality, cutting-edge extraction technology, and streamlined project execution positions Kachi as a compelling opportunity in the evolving global lithium market.