Lake Resources (ASX:LKE) Managing Director, Steve Promnitz provides an update on its lithium brine project in Argentina following Catamarca State support and guidance being granted for the project.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me from junior lithium developer is Lake Resources (ASX:LKE) Managing Director, Steve Promnitz. Steve, welcome back.
Steve Promnitz: Jess it’s great to be back, thank you.
Jessica Amir: First up Steve. Can you give us an update on your news regarding State support for your Kachi lithium brine project?
Steve Promnitz: What we’ve recently executed is a Letter of Intent with an entity of the Argentine Provincial Government, the Catamarca Province. They have their own mining and energy entity and we’ve signed a Letter of Intent to work with them. And the reason for doing that is that we’re seeking their support and they’re providing their support, to facilitate the project. Both through permitting, fast tracking, accelerating its development. And then ensuring that we deliver first-world practises on environmental standards, and community consultation.
A good thing about it is that we’re going to be drilling soon on this project and that means that the next phase that we go into, we’re going to be seeing exactly how that’s facilitated. How we move that through and get the project underway. Now it’s quite good that we were selected out of the few projects that are there, albeit at an early stage, to receive that sort of support locally.
Jessica Amir: What’s the project timeline for that?
Steve Promnitz: On the back of that letter been signed, we’ll have a public hearing and then move into the drilling phase. With our first round of drill holes, which will be executed between now and Christmas, then we’ll get results out of that. That’ll lead to a scoping study, that’ll lead to resource statement. And then probably in the New Year, we’ll be leading into another round of drilling, baseline studies for environmental community. And also possibly even initial evaporation ponds for a prefeasibility study.
Separate to that we’ve also got a project near Orocobre Limited (ASX:ORE) in the Jujuy Province and we’re looking forward to getting access and drilling to that. And that timing will become clearer in the coming months. And then beyond that, we also have a hard rock project. It’s a new area, 150 kilometre long belt and just by the way of scale, some of the hard rock lithium producers in WA, that would extend from their project all the way down to Port Hedland, rather than a few postage stamps. So there’s some substantial upside, we just have to define a key project.
Jessica Amir: Last question Steve. One of the leaders in the analysis of supply and demand of battery mineral storage, presented in Australia for their global road show, and your were invited to present alongside with them. Tell us some of the key takeaways for their message?
Steve Promnitz: The great thing is that Benchmark Mineral Intelligence are one of the leaders in this whole analysis of supply and demand, across the space. And it’s interesting to see what’s happening. Only recently we saw Volkswagen (OTCMKTS:VLKAY) came out at the Frankfurt motor show and they said, we’re going to spend 70 billion euros moving across to electric vehicles. A number of other providers like Volvo (OTCMKTS:VOLVY) have been doing it. But it’s actually interesting that Europeans have been a little bit behind the Chinese, the Koreans and the Japanese in this take-up. That was a bit of a wakeup for the whole sector, because everybody went right all these electric vehicles, where are their batteries going to come from?
At the moment the proven technology is lithium ion batteries. Now there are other technologies, but at the moment there’s 16 giga factories or mega factories being built around the world. Predominantly in east China, just like what Tesla (NASDAQ:TSLA) has. And the takeaway out of all of that is that these lithium ion batteries are going to be produced out of these mega factories. And the key component for that is lithium, and where is it going to come from.
If we look at total global consumption of lithium last year, that would just go into Tesla in the year 2020. And that’s just about 15 per cent of global demand. So we’re not too certain where everything else is going to come from. That means that players like ourselves and a few others actually have the opportunity. There’s a squeeze on supply, there’s increasing demand and there’s a real opportunity there.
I mean just think of this for a moment. We look forward five or more years time, most of us won’t own cars. We’ll have a car that’ll turn up at the front door with our little smartphone of an Uber type app. It’ll turn up, we’ll tell it where it’s going to go. It will move to the place, it’ll get paid off our credit card and then it’ll move on to the next place. Completely automated without even a driver. And that’s going to be driven by lithium ion batteries and we’re going to be in the front row to provide some of that provision, in the next few years.
Jessica Amir: Steve Promnitz, thank you so much for the update.
Steve Promnitz: It’s a pleasure.