here is the swot analysis
SWOT ANALYSIS
Strengths
Large resources with upside at Kachi: Kachi represents one of the larger South American brine resources by volume and contained lithium, and also has significant upside that could be released through only limited drilling.
Results of Lilac Solutions test work: The possibility to treat the brines through ion exchange processing is a key technical strength, and would mitigate the relatively low grade of the Resource.
Proven brine mining destination: Argentina is aproven brine mining destination where the industry wants to be, and is host toa number of world class deposits, with well developed mining legislation.
Transport access: All projects have ready access to transport infrastructure, and are close to current operations.
Experienced people with skin in the game: Company personnel have significant experience in the resources game, as well as share holdings.
Weaknesses
One of many:
Lake is one of many hopefuls in the lithium space, with thesecompanies vying for what we would see is a relatively limited pool of fundingand potentially offtake agreements – this will become more critical whencompanies approach development and will need development finance, with theplayers then needing to differentiate themselves to attract funding. A keymitigating/differentiating factor with Lake is the potential for a robustoperation at Kachi should the ion exchange processing prove viable.
Grade at Kachi: The lithium grade at Kachi is low compared to existing operations, and thus would be a relatively high cost operation should the ion exchange processing not prove viable. Mitigating this are the results of ion exchange processing to date, with bench scale processing producing a high quality, low impurity product.
Marginal holdings at Cauchari-Olaroz: Given the interpreted geology and size of the holdings (particularly at Cauchari), these may prove to be marginal to develop an operation over. However the resultsof the recently completed hole at Cauchari are very positive,showing the possibility that the basins are bounded by steeply dipping faults. If this is true, there is the scope for significantly larger volumes of potentially brine mineralised sediments that past interpretations have presented, which could go a significant way to mitigating this. Also, the Company’s Olaroz holdings have an area similar to that hosting Ganfeng’s/Lithium America’s 23.0 Mt LCE Resource at Cauchari - this is the largest published lithium brine Resource globally.
Opportunities
Kachi development: This will hinge on a number of factors, including theupcoming results of the PFS and ion exchange pilot processing, however resultsto date are largely positive.
Assetsales: Should appreciable Resources be defined or strong drilling results bereturned, there may be the potential to sell the Cauchari and/or Olaroztenements to the neighbouring developers. Dependent upon results, the Company’sview is that Cauchari would be the most likely property to be put up for sale,with the potential to look towards a stand alone development of Olaroz shouldthe results of the drilling be positive.
Lithium fundamentals: Despite recent falls in price, these currently look reasonably strong for the foreseeable future, which should facilitate progress and investor interest.
Threats/Risks
Resources, hydrology and processing: The keytechnical threat is that the projects do not stack up technically, withpossible factors including physical dimensions and hence size of Resources(Olaroz and Cauchari), chemistry, hydrology and processing (Kachi). Asmentioned above these factors however are mitigated by the results of work todate.
Markets and funding: These are perennial threats forjunior resources companies, and include the effects of the stock and metalsmarkets on the ability to fund juniors. Our view is that Lake will need toraise cash within six months, with our estimate indicating a spend in the orderof A$4 million over the same period. In addition we have seen general falls invalue of lithium stocks since the beginning of 2019.
Politics and sovereign risk:
Although President Macri has introduced much needed reform,including the relaxation of capital controls and floating the Argentinian Pesoto attract foreign investment, the economy continues to perform poorly, andthere is a risk that the 2019 election could see a change back to a morepopulist or socialist government, that may work on undoing some of thesemeasures. Argentina has a history of political and social instability (andcorruption), and as well the separate provinces perform badly in the FraserInstitute surveys. Mitigating this is that the country is a proven brineproducer, with recent entrants including Orocobre showing that projects can bedeveloped - this is the first brine start-up in the past 15 to 20 years.
(20min delay)