Hi all, Thanks for granting me some time to be able to sit down...

Hi all,

Thanks for granting me some time to be able to sit down and put together my feedback on the recent AGM.

Before I comment on the AGM, I’d like to provide some context to me and my position:

• I first bought into Lake in earlier November 2017, and at that time the share price was 19c and rising
• I have held onto most of my shares through this two year period, buying further in recent months
• My average is still a fair way above current SP, being at 11c
• I don’t seek confrontations, and whilst I’m happy to ask questions seeking information, I’m not out to put the blow touch onto anyone unless I feel that they have been dishonest or fraudulent with managing the company and its (our) funds

I provide this as we all have different starting points, investment timeframes, appetite to risk, ability to ‘take a hit’ when the share price goes backwards, etc, and what might be extremely important to you as a fellow shareholder may be relatively unimportant to me, and vice versa.

2019 LAKE RESOURCES AGM

Attendees
The meeting was small, and those in attendance were:

• Steve Promnitz (MD)
• Stuart Crow (Chairman)
• Nicholas Lindsay (NED)
• Garry Gill (CFO)
• Sinead Teague (Sec)
• Accountant/Auditor
• Myself
• Two other shareholders
• A seemingly very knowledgeable man named Andrew who I understood to have been in the lithium market/industry for 10-15 years (I wish I got more details about him, but I’ve failed here)
• A gentleman who identified initially as ‘just an observer’ (more later)

The Resolutions
Most/all of you would be aware that all resolutions were passed. There has been some commentary on HC already regarding that, but I don’t have much to say. I queried the reason for Resolution 6 and if this was to pave the way for a future takeover, and this was addressed by both Steve and Sinead as being a measure to bring the Company’s Constitution in line with other companies and to protect small shareholders. To me the explanation seem valid and I had no concerns.

I was watching Nick Lindsay when the results of Resolution 2 (regarding his reappointment) were announced. He was probably already aware of his reappointment due to postal votes already indicating about 95% in favour, however, he didn’t engage with anyone in the room, only lifting his eyebrows to the announcement by the Chairman (Stu) who thanked him for his hard work over his recent tenure and welcomed him back onto the board.


AGM Presentation
I was hopeful of a presentation, and a message something along the lines of “steady as she goes”, or “behind the scene, we are kicking goals – great news ahead”. This wasn’t one of those AGMs. A few posters on HC have mentioned that Lake has been tardy with getting the presentation out to the ASX in time – unfortunately, there simply was no fresh AGM specific presentation. Instead, Steve talked to the presentation that was given in Noosa in July 2019. No specific address was given by Stu or others board members.

Kachi – Steve indicated that the various project milestones for Kachi (PFS and pilot plant) were underway and on track.

Olaroz - has taken a back seat as they are prioritising use of funds for activities that assist with securing more substantial funding (e.g. along the lines of the $25M mentioned in October announcements). I suspect this will not be within H2 2019.

Cauchari – Steve mentioned that the nearby majors/producers are sitting tight and so are hardly clambering to buy Lake’s Cauchari tenements. The further drilling earmarked for H2 2019 is also parked up. He indicated that, following the pilot plant producing sufficient product at Kachi, the plan would be to move the PP up to Cauchari and look to demonstrate ability to produce high quality produce from those brines.

Catamarca pegmatites – no mention of these at all during the meeting. Given the limited funds currently available, it is obvious that this is unlikely to progress for a while and even in July 2019 there was no proposed timeline that involved exploration/development of these tenements.


Positives
Steve sees that Lake is best positioned to focus on being able to target production of high quality lithium (emphasised this several times), recognising that there has been some low quality product (i.e. high impurities) of recent times from some producers. He discussed the lithium oversupply and future demand situation, and identified that the way for Lake to be relevant and become a producer is to:

• Be novel (think Lilac direct extraction and short production timeframe)
• Have high quality product – the Lilac system essentially ‘selects’ the lithium, leaving behind impurities that are otherwise still present within the concentrate within evaporation ponds
• Be ecologically responsible – as there will be greater emphasis on this for the EV supply chain (the reinjection of water back into the aquifer following passing the brine through the Lilac plant is the point being raised here)
• Consistent quality – able to be delivered by a large resource (Kachi) with relatively low impurities

He mentioned that the Kachi brine that has been run through the Lilac DX system produces a concentrate generally with Li between 30,000mg/L and 60,000mg/L, but also as high as 80,000mg/L. From what I understand, that is much higher than EV ponds (I think these are typically around 5,000 – 10,000mg/L).

Low cost target for this method reconfirmed.

Steve mentioned that there is currently a Service Agreement with Lilac, but that they are looking to strengthen the partnership, with joint holdings/investment. I believe that this is to ensure that Lilac focuses on Lake rather than working for any other late-comers, at least not until Lake are established on this front. Also looking at arrangements for geographical exclusivity (although it is fair to say that there are other DX methods out there).

I’m at least pleased to see that they are focusing what funds are available into progressing the PFS and pilot plant (this could also be viewed as a negative – i.e. how did we get to this point?).

Steve discussed that there were some key signs that indicated that the Lithium pricing was at or nearing bottom due to some producers having ceased production which indicated that they were no longer profitable below that level. Whilst that in itself would not mean that the price couldn’t go lower, turning off production would mean that there would be reduced supply which would lead to stabilisation or increase in pricing. Steve feels that the market will be relatively flat for a while and will improve late next year.


Negatives
It is fair to say that the general atmosphere in the meeting was rather sober. This was in contrast to the 2018 AGM that I also attended.

There was discussion regarding the Convertible Notes and Steve acknowledged the recent criticisms regarding this. He discussed that access to funding has become more difficult throughout the year due to lithium prices being relatively low, and whilst they avoided the particularly bad CN’s, because they haven’t yet secured more substantive funds, they have needed to continue the Amvest facility.

They want to be able to pay out the CN but the company currently isn’t in a position to do so. Steve indicated that they have been gauging the willingness of funding from sophisticated investors, and it seems that a further CR will be needed within a few months.

I sounds like there is still a bit of work to do to secure the funding being sought. I get the feeling that this won’t really happen until end of current financial year (or even later?).


Other Matters
Steve mentioned that things have been tough, and I sensed that he has been under some strain, in particular regarding the CN issue and how this was effectively capping the share price. He mentioned numerous HC postings regarding this, so he is obviously acutely aware of the dissatisfaction about this facility. After the meeting, I asked him how he was doing, to which he replied “when you go out amongst the wolves, you get some scars”.

At the end of the meeting I spoke briefly with the gentlemen who had earlier identified as ‘just an observer’. He mentioned that he had spent a lot of time working in Chile and other parts of South America. He also thought that there would be a big push for most mining equipment to be battery powered. Some points about him:

• Given that he had not identified as a shareholder when I met him at the start of the formal AGM, I asked what his interest in the company was. He indicated that he might become involved or assist the company.
• A short while later, Steve (MD) introduced this man to the aforementioned knowledgeable Andrew chap and I thought Steve mentioned he was previously with Austmine.
• At the end of the AGM and when the room was being cleared (i.e. ‘that’s all folks’, the Lake BOD and this gentleman went back into the room to hold a separate meeting.
• Later, when I looked up the Austmine website I came across this:

In case the clipping doesn't make its way through when I post this, you can look up Robert Trzebski.  Needless to say that I have no idea what the discussions were, but I’m hoping that this might be a beneficial arrangement to advance Lake’s prospects in that part of the world.



My apologies if this report doesn’t contain answers to questions that you might have. I think Steve is doing a good job (or as good as he is able in the current Lithium juniors space), but not so convinced about Stu. I remember at the previous AGM when Stu was up for re-election, a shareholder politely asked if Stu could say a few words about why he was suitably placed to be returned to the position as Chairman. Stu was a little surprised by the request, but also seemed a little annoyed that he needed to justify himself. Given that Stu’s long term incentive package is tied to having an investment partner sign an agreement for Kachi, and that Kachi is the main (sole) focus of the company at present, I’m surprised that Stu hasn’t take a more active role during the AGM to discuss progress on this front.

Well folks, that’s all I can think of at the moment. I’m sure some other little bits of info might pop into my mind later on.

Also, I've enjoyed reading the different analysis put together recently by @Jojo84 - some good points and things to think about.

Kind regards, Grasti