Lilac Brine -vs- Lilac Lithium Clays, page-7

Main differences between the process for clay vs brine using Lilac are as follows:
The clay deposits need to be mined (dug out) then leached with sulphuric acid to reach a comparable 'liquid' to pumped brine (salty water) that is then run through the Lilac ion exchange extraction process. From there the post Lilac eluate can be processed using conventional methods.
Clearly the additional reagents and processing steps of clay bearing deposits will struggle to be economical. Case in point Ioneer (INR) will stockpile the substantial quantities of clay removed to access their ore until such time as conversion is economically sound.
Purity of the pre Lilac 'liquid' matters as demonstrated by the lower recovery rates from the leached clay and the need for oil field or continental brine (depending on marketing language) to be pretreated as is the case of ASN.
Initial brine lithium concentration levels also matter in terms of reagent requirements, volumes to be processed etc. Again this is the case with ASN. Nearly double the ASN brine volume will be run through the Lilac process to recover a similar quantity of lithium concentration in the eluate - apart from the additional brine to be processed, the equivalent acid quantities required could be double. Reagent costs matter immensely.
Fortunately Lake has access to high quality sources of brine from Kachi, Cauchari, and what is almost certainly guaranteed to be very high quality at its Olaroz tenements given close proximity to Orocobre operations and as the concept was proven at Cauchari.
Lake PFS is due for completion shortly and pilot plant should be commissioned in less than 6 months.
Now I would be remiss not to say that I am extremely disappointed with the chosen finance agreements that LKE has recently entered into and I am annoyed with the way it has been presented to investors along with the unexplained delays in Olaroz drilling that could have been used to raise funds on the back of excellent drilling results.
I feel Steve Promnitz has dropped the ball here by signing a horrible financing package and I will add that Stu Crow needs to start playing the part of an asx company chairman and reconsider some of his Twitter posts before tweeting.
Now that is out of my system, the upside potential for LKE is massive and not simply a pipe dream.
All scoping studies and PFS reports by nature are overly optimistic in opex forecasting - particularly in the case of lithium juniors (Lake is no exception), however I do believe based on extensive research that LKE opex will fall in the lowest quartile for Li Chemicals and Capex will be comparatively low in comparison to traditional evap pond developments.
Given the quality of LKEs tenements - 4.5m metric tonnes of LCE resources at Kachi alone, a market cap below US$20m is absurd. Consider that the Kachi Resource is several times the size of Sydney Harbour and has an exploration target of 17mt LCE. To put this into perspective the rule of thumb is a brine project needs at least 1mt LCE resource for 10ktpa LCE 20 year production life.
And in my opinion being able to claim 100% ownership of a salar the size of Kachi is one hell of an attention grabber in discussions with potential end users.
LKE doesn't require a publicity stunt like a bag of Lithium Carbonate produced by third parties. The capabilities of SA salar sourced brine is commonly and readily accepted.
Its easy to blame the macro lithium environment however the poor choices in obtaining exploitative financing falls on the shoulders of Steve and Stu and the subsequent dilution and profit tactics of the lender are the ultimate reason for the woeful SP.
All positive news is countered by this behavior.
What is more disappointing is the attitude of the BOD to offset the dilution they have caused by rewarding themselves with shares to maintain their proportion of total SOI.
I would like to say I have a target in mind for the next 6 months of 20cps but I cannot because I don't trust management when it comes to dilution. I think fair value is around $120m given the size and quality of resources and advanced stage of development. Remember during Cauchari drilling just a couple of months ago - which happens to be the least valuable of the three main tenements - the market cap was well above $50m.
Therefore I do not believe I am upramping but readily admit bias towards LKE and believe they are the best placed and most advanced pure lithium play to focus on an evap pond free brine direct extraction method (I include ASN in this group even though it's soup has multiple commercial minerals).
In the future world of direct lithium extraction (DLE) brine purity and grade will be of upmost importance.
Now Lilac could be a game changer in another less discussed way.
Hard rock spodumene producers claim a comparative cost advantage of producing Lithium Hydroxide due to one fewer step involved in production - this is debatable given many of those conclusions assume Battery Grade Li2CO3 from brine is required to produce LiOH. This is not the case.
What will disrupt this dynamic is the ability for post Lilac Eluate to be converted directly to Lithium Hydroxide.
Im basic terms, wash the Lilac beads with Hydrochloric Acid and you have a Lithium Chloride eluate, however wash the beads in Sulphuric Acid to liberate the lithium from the beads and you get Lithium Sulphate that can readily be converted to LiOH without first converting to Li2CO3.
Then there is perhaps the greatest potential advantage of brine operations and Lilac's DLE.
While Lithium Hydroxide is all the rage due to its necessity in the production of high nickel NCM 811 Cathodes many experts consider the medium term industry shift will be the adoption of solid state lithium batteries as a high end replacement to lithium ion traditional cells in particular NCM811.
Solid state test plants have been up and running while Panasonic will unveil it's commercial SS lithium battery at the Tokyo Olympics next year.
While at the same time we have seen a shift in cathode production back to tech that favours Lithium Carbonate -LiFePo4 NCM523 & NCM622 (which can use either Li2CO3 or LiOH) due to costs and stability.
Back to solid state it is important to realize that lithium metal will be required and it's direct precursor is Lithium Chloride. While spodumene converters would need to convert to Li2CO3 then LiCl, then Li Metal, briners have a major advantage - provided they can achieve the required purity - given LiCl is achieved prior to Li2CO3 in brine operations.
Im the case of LKE this advantage is even more profound given the extreme purity post Lilac and after washing with HCl will produce amongst the highest quality possible for LiCl.