Olaroz resource upgraded 2.5x to 16.2 million tonnes LCE Confirmation of strong project economics for Olaroz stage 2 HIGHLIGHTS • The 2022 Interim Upgraded Resource substantially expands Allkem’s resource in the Olaroz basin from 6.4 million tonnes (Mt) lithium carbonate equivalent (LCE) to 16.2 Mt LCE, with 5.1 Mt of Measured resource and 4.6 Mt of Indicated resource, with the remainder in Inferred resource status • Total Allkem resources at the Olaroz and immediately adjacent Cauchari basins are now 22.5 Mt LCE in all resource categories, making it one of the largest lithium resources in the world • The lithium grade of the Olaroz salar Measured resource (0-200 m) is 648 mg/l, with the underlying Indicated resource (200-350 m in the north, 200-450 m central and south) at 657 mg/L. The further underlying Inferred resource grade is 663 mg/l • The 2022 Interim Upgraded Resource is restricted to solely beneath the Olaroz salar surface. The resource estimate is limited at depth by the gravity geophysical survey basement topography, which drilling now suggests underestimates the basin depth • Exploration carried out by Allkem and Advantage Lithium (100% Allkem) demonstrates brine at economic concentrations continues over extensive areas south beneath the Archibarca delta towards Allkem’ s Cauchari Resource and north towards the Rosaria delta, with the resource open in both directions • As well as supporting the 25,000 tonnes per annum expansion in capacity of the Olaroz Lithium Facility to a total 42,500 tonnes per annum capacity, the 2022 Interim Upgraded Resource will together with Allkem’s Cauchari resources, underpin further expansion of the Olaroz Lithium Facility to meet soaring global demand • Economic analysis of the Stage 2 expansion (not including Stage 1, AKE 66.5%) demonstrates a pre-tax NPV10% real of US$2,674 million and pre-tax IRR of 192% on a 100% basis. Post tax analysis delivers an NPV10 of US$1,704 million and an IRR of 137% on a 100% basis
AKE Price at posting:
$13.31 Sentiment: Buy Disclosure: Held
