Relevant Excerpts from Lake Update Webinars, page-321

The next topic covers David's outlook on Lithium demand
Sourced from Update Webinar #3 on 31/10/23
Commentary made by David Dickson - CEO/Managing Director

David’s outlook on Lithium demand
DD: "I think I've said this a couple of times since we did the big Operational Update, I’ve focused more attention to kind of the bigger things that really impacts Lake Resources and I spend a lot of time looking at the macro environment and obviously today we’re in a situation where lithium prices have been under a lot of pressure and all of it really driven by what's happening in China. Now, as we look at our business, we are more focused on what Lithium pricing is looking like in 2027 onwards. When I look at it and look at the work done by companies like Fast Markets and Benchmark, a lot of focus seems to be on the demand side and demand is going to be driven by EV penetration and geopolitics. So, what I mean by that is EV penetration growth is going to be in places such as Europe and Japan, Korea and particularly in the US.

So, a lot of focus on the demand side, but the bit I think is really unclear really is on the supply side. I think the issue from a market perspective is, there's a lot of assumptions being made on supply coming on to the market. I would question not only the quantum of that supply but certainly the timing of that supply as I look at a number of projects. As a result, there’s this wide range of prediction on long term lithium pricing which I think creates a wide range of economics when you look at even us trying to put our DFS together. You look at long term pricing and you look at the variance in predictions in the marketplace - it is significant. I think that really comes down to more of a reflection of people still being unsure of what's going to happen on the supply side and that's both from technical and operational, but also what's going to happen geopolitically.

Today China still has 78% of the market share of Lithium. I don't see that's going to be long term and it’s really driven by geopolitics. So, I still think there's a huge amount of uncertainty that sits around on the supply side. My general view is I think there's an overestimate on the supply which I think is going to put pressure on lithium pricing to the upside…..but not tomorrow. This is a 2027/2028 timeframe onwards.