Lake Resources Limited (ASX:LKE) Managing Director Steve Promnitz talks about today's definitive lithium results from the company's Cauchari Lithium Brine Project in Argentina, explaining how these results differ from prior announcements.
Jessica Amir: Thanks for your company. I'm Jessica Amir for the Finance News Network, and with me today from Lake Resources (ASX:LKE) is managing director Steve Promnitz. Steve, as always, great to see you again.
Steve Promnitz: Thank you.
Jessica Amir: So first up, you've just announced higher grades across wider zones, at one of your flagship projects, the Cauchari Lithium Brine Project in Argentina. Just tell us what this means, and how this differs from prior announcements.
Steve Promnitz: We've just announced a wide interval, more than 340 meters averaging over 500 milligrams per litre. Now, to put that in context, that is now the same sort of intervals, the same sort of numbers, as the biggest defined resource on the planet, right next door to us at Lithium Americas, Ganfeng. So that's a great result. It's a discovery hole.
What's different about today's numbers are that they're definitive results. So previously we had preliminary results. That was good. You've got to report them as they come down. When you finish a hole, you come back out, do detailed sampling. The results have been so good. That's why we're extending the hole now deeper.
The third thing that's important is not only is it similar to the project next door, but Ganfeng, number two, lithium producer in China recently stumped up with nearly US$400 million to buy half of that project. We're a market cap of $30 million. Go figure.
Jessica Amir: So Steve, you've previously spoken to us about Cauchari. So why do you think the market hasn't really responded better to date?
Steve Promnitz: Well today's numbers are definitive sample results. When you finish a hole, you go back up the hole, and you sample it all the way. And because those numbers have been so good, that's why we've gone deeper.
What we reported before were preliminary numbers. Now you could have put out the results as they come available, but I think maybe the market was looking for something better. They saw those initial numbers, saw maybe this isn't that great. Now we've come out with great numbers which are above 500 milligrams per litre, the same as the project next door over a wide interval. And I think this, we can stand behind. If we were going to into a resource, these are the sort of numbers that we'd use.
Jessica Amir: So you previously mentioned that you're going to Olaroz, which is a joining a lithium producer. So why aren't you continuing to focus on Cauchari then?
Steve Promnitz: So at Cauchari we will go and drill some more holes in the future. It's just that the drilling we've done to date with that wide intercept, with those grades being so similar to the project next door, shows that we're in the same basin. So what these things look like, is essentially a swimming pool, and they're full of sand and clay, and then you've got this salty water in it. And that salty water has got some lithium in it. So if I'm drilling on the side of the pool or if I'm out in the middle of the pool, it's the same stuff. Those results today show the same thing.
Now we can go and drill some more holes. We might get to slightly high or slightly lower numbers, but we already know we're there. What we'd like to do is go and repeat the success at the next project at Olaroz.
Olaroz is already in production thanks to Orocobre's (ASX:ORE) great work over the last few years. We want to go there and repeat that success and then come towards the end of the year. We'll have Olaroz being a great project if the results come in. Cauchari looks like an exciting discovery. We've got Cauchari moving through pre-feasibility study pilot plant, it's a company maker. We'll be the only junior with three outstanding projects in the heart of lithium triangle where everybody wants to be.
Jessica Amir: So Steve, what's next in terms of announcements, news flow?
Steve Promnitz: At Cauchari, we're drilling deeper. When we finished that hole somewhere around 600 meters, then we'll do that detailed sampling back up to where we finished it 460. And we'll see what sort of numbers we get out of that. So we'll see more results coming out of that hole.
Somewhere in the next couple of weeks, give, or take a week, we'll then move to Olaroz. We'll get the drilling underway there and then we'll have a lot of news. That area, we applied for more than three and a half years ago. This will be the first time of drilling, so that'll be pretty exciting too.
Jessica Amir: And just lastly, zooming out, looking at the battery minerals sector, what are we seeing?
Steve Promnitz: Well since I was last here, we're seeing more deals at the automaker level, not just Volkswagen but Toyota. BMW's stepping up to the plate, more electric vehicles. We're seeing more Gigafactories being built. These are the lithium-ion battery makers. And best of all, we're seeing more M&A space.
Just this week we saw AJM do a huge deal with Shanshan, one of the big battery cathode makers out of China, so it's happening. Even Macquarie has now gone bullish on a sector that they've been bearish on for ages.
So we're well positioned. The sector is really picking up. I don't think the market has quite picked up the momentum because they've seen this before. They can go, "Maybe it's all over," but it's taking off now. Because we're inside, we can see that activity, and we're going to be well positioned. Coming to the end of the year, we're going to be the only junior with three major projects in the heart of the lithium triangle.
Jessica Amir: Well, exciting times ahead. Steve Promnitz, thank you so much for coming in.
Steve Promnitz: Thank you. It's always a pleasure.