How Lake Resources Boosted Kachi Lithium Grades While Slashing Costs

A Step Change in Lithium Extraction

Lake Resources N.L. (ASX – LKE) has announced a significant update to the lithium ore reserve at its flagship Kachi Project in Argentina’s lithium-rich Puna region. Leveraging advances in Lilac Solutions’ Generation 4 direct lithium extraction (DLE) technology, the company has optimized its mine plan to produce 25,000 tonnes per annum (tpa) of battery-grade lithium carbonate over a 25-year life of mine (LOM).

This optimization has allowed Lake Resources to concentrate production in higher-grade lithium zones, increasing the average lithium concentration in the brine feed to 268 mg/L; substantially above the previous design basis. The improved lithium recovery rates have enabled a reduction in the number of production wells from 16 to 11 and injection wells from 21 to 14, resulting in a leaner, more efficient operation.

Economic and Environmental Benefits

The updated wellfield development plan incorporates advanced oilfield drilling and completion technologies, which have shortened execution timelines and lowered costs. Lake Resources estimates capital expenditure (CAPEX) savings of approximately $49.3 million and annual operating expenditure (OPEX) savings of around $6.7 million compared to the 2023 Definitive Feasibility Study (DFS) baseline.

Environmental considerations are integral to the project design. The optimized wellfield layout minimizes the environmental footprint by reducing the number of wells and maintaining aquifer pressures through a carefully designed injection strategy. Modeling predicts less than 0.25 meters of water level change in ecologically sensitive areas over the life of the mine, with dilution of lithium grades limited to approximately 3%; an improvement over previous estimates.

Robust Resource and Reserve Base

The updated Ore Reserve is constrained by the plant’s processing capacity rather than resource availability, with a Proved and Probable Ore Reserve totaling 626,760 tonnes of lithium carbonate equivalent (LCE). Notably, 98% of production is sourced from Measured Resources, providing a high degree of confidence in the reserve estimate. The first seven years of production are fully supported by Proved Reserves, with the remaining years conservatively classified as Probable pending further data and model refinement.

Hydrogeological modeling, developed in collaboration with expert consultants, underpins the reserve estimate and simulates brine extraction and reinjection dynamics. The model has been calibrated against extensive historical data, including pumping tests and lithium concentration measurements, ensuring reliable predictions of production rates and environmental impacts.

Strategic Positioning Amid Growing Lithium Demand

Lake Resources’ Kachi Project is strategically positioned within the Lithium Triangle, a globally significant lithium-producing region. The company’s use of Lilac’s ion exchange DLE technology addresses two critical market demands – the need for high-purity battery materials and sustainable, low-carbon lithium production. Economic modeling based on a lithium carbonate price of $20,500 per tonne forecasts a positive net present value (NPV), supported by low operating costs estimated at approximately USD 5,895 per tonne of LCE.

Permitting progress is advancing, with the Environmental Impact Declaration expected in the second half of 2025. The company is also engaging with local communities and regulators to ensure robust environmental, social, and governance (ESG) standards are met, reinforcing its commitment to responsible development.

Looking Ahead

With a refined mine plan, enhanced lithium grades, and significant cost savings, Lake Resources is poised to advance the Kachi Project toward production. The integration of cutting-edge extraction technology and comprehensive environmental management positions the project competitively in the evolving lithium market.