Lake Resources (LKE) H2 2024 earnings summary

Executive summary

• Kachi Project Phase One DFS confirmed a post-tax NPV of US$2.3B, IRR of 21%, and annual average EBITDA of US$635M, with a 25-year mine life targeting 25ktpa battery-grade lithium carbonate production.

• Measured and Indicated Resources at Kachi increased from 2.9Mt to 7.3Mt LCE, with total resources exceeding 10.6Mt LCE as of November 2023.

• Lake implemented significant cost reductions, including a 70% global headcount cut and ongoing sale of non-core assets, to preserve capital amid challenging lithium market conditions.

• Strategic partnering process for Kachi is ongoing, with Goldman Sachs engaged as financial adviser; timeline for final investment decision may be delayed due to market conditions.

• Environmental Impact Assessment for Kachi Phase One submitted; LOI signed with YPF Luz for power supply; Lilac Solutions' DLE technology improvements expected to reduce capex by up to 10%.

Financial highlights

• Net loss after tax for FY24 was $54.0M, compared to $47.3M in FY23.

• Cash and cash equivalents at 30 June 2024 were $22.9M, down from $89.2M a year earlier; no debt.

• Operating and investing cash outflows totaled $57.8M for the year.

• Share-based payments expense was $6.9M, down from $13.0M in FY23.

• Share capital increased to $243.4M following equity raisings and SPP.

Outlook and guidance

• Focus remains on advancing Kachi to FID and securing a strategic partner; timeline for FID may extend into 2025 due to lithium market weakness.

• Ongoing cost control and sale of non-core assets to extend financial runway.

• Kachi Phase One targeting 25ktpa production, with potential for expansion subject to further study.

• Anticipated EIA approval for Kachi in 1H 2025; FEED for power delivery expected by end of 2024.