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Drilling Confirms Large Scale Lithium Brine Basin Kachi Lithium Project, Argentina
Drilling Confirms Large Scale Lithium Brine Basin Kachi Lithium Project, Argentina
Brisbane, May 22, 2018 AEST (ABN Newswire) - Argentine-focused lithium exploration and project development company Lake Resources NL (ASX:LKE) is pleased to report initial drill results and ongoing exploration activities at its 100%-owned Kachi Lithium Brine Project in Catamarca Province.

- Initial drilling confirms the Kachi Lithium Project is a maiden discovery of a very large deep lithium brine-bearing basin being a similar size to producing globally significant lithium projects.

- Lithium brines intersected in numerous horizons from surface to 400metres in drill holes spaced 11 kilometres apart at Lake's 100%-owned Kachi Lithium Brine Project in Catamarca Province, Argentina.

- Seven rotary and diamond drill holes completed in lithium brine-bearing sediments in the Kachi salt lake. Results reported for four of the seven new resource drill-holes, with variable depths up to 402 metres.

- Highlights include drill-hole PP2-DV-003, which averaged 308mg/l lithium after 27 hours of airlifting, with low impurities and low average Mg/Li ratio of 4.3.

- Results are pending from a number of samples from depths below 200 metres with promising conductivities.

- Six of the seven holes ended in sandy material, and remain open at depth. The extensive sands encountered have relatively high drainable porosity based on initial site observations, and are expected to have relatively high permeability, positive for future brine extraction requirements and resource estimation.

- Lake considers the Kachi project to be a covered salt lake over 25 x 15 kilometres hosting a very large lithium brine body in sandy sediments with high permeability and low impurities.

- A seismic survey and drilling data suggests the Kachi basin is over 400 metres deep with potential to host a very significant volume of brine. This vindicates the exploration approach, despite slow drilling and delays in results.

- Deeper horizons are being targeted to locate higher grades and assess flow rates and extend the potential. The implied size of the brine reservoir has made the Company contemplate further drilling rigs to accelerate the resource assessment.

The Company can now definitively demonstrate that lithium brine is present in numerous horizons from near surface to at least 400m depth in drill holes spaced 11km apart (see Figure 1 in link below). Drilling also confirms Kachi is a very large-scale covered salt lake over an area of around 25 x 15 kilometres (375 km2).

Lake has been conducting two concurrent phases of drilling operations:

1. Resource exploration drilling utilising a diamond drill rig to collect drill cores for porosity assessment and to obtain brine samples for resource estimation, and

2. Production well drilling using rotary drill rigs for additional resource estimation data and construction of wells for test pumping purposes. These will have the potential to pump lithium brine into trial evaporation ponds and test the latest extraction methods. A total of seven drill holes have been completed on three separate drill platform locations (see Figure 1 in link below).

Lake's Managing Director, Steve Promnitz, commented "The significant scale of the Kachi basin is evident. We believe that there is a covered salt lake with an estimated area over 25 x 15 kilometres, hosting a very large brine body in sandy sediments with good permeability and low impurities.

Drilling has intersected multiple brine aquifers. The higher lithium values with a low Mg/Li ratio in hole- 003 area positive discovery and indicate good potential for future positive results. Three drill rigs are on site in the expanded drill programme to accelerate exploration to produce a resource statement."

Resource Drilling - Kachi Lithium Brine Project

Lake Resources' 100%-owned Kachi Lithium Brine Project in Catamarca province, Argentina covers over 50,000 hectares of mining leases owned 100% by Lake's Argentine subsidiary, Morena del Valle Minerals SA. These are held over the centre of the known Kachi salt lake in the deepest part of the basin. Surface sampling has revealed positive lithium results in conductive brines, which are being quantified through the drilling program and geophysics.

The current status of resource diamond drilling works comprises the completion of four diamond drillholes, with the receipt of analytical results from brine samples from the first three drill-holes. Table 1 (see link below) provides drill hole location details and averaged lithium results. Three rotary wells have also been drilled to date with more underway.

Completed diamond drill holes were progressively drilled deeper as drilling knowledge has been gained. Within the lake, variable lithologies have been intersected which are dominated by sandy sediments. Samples have been collected for porosity measurements that will be undertaken by a laboratory in the USA with extensive experience in analysing salt lake sediments for their porosity characteristics, in particular the specific yield for drainable porosity. Once completed, the porosity data will be used together with the systematic brine analyses from the drilling samples to produce a resource estimate in accordance with the JORC reporting code.

Analytical results for lithium to date have been highest in drill-hole PP2-DV-003. Brine samples in this hole display encouraging conductivities and densities with a favourable Li/Mg ratio of 4.3.

The diamond drilling intersected thick intervals of intercalated sands, gravels, sandy clays and clay horizons. The predominant litho-type of lake sediments is sand-dominant, and poorly consolidated, with relatively low core recoveries in sandy material. Figure 2 (see link below) shows a range of grain sizes in material from drill site JV006 (in the south) within unconsolidated sediments found to 300m depth.

Initial indications from field hydraulic testing indicate high permeabilities for the sandy material, which will be further tested with the installation of large diameter production test bores.

The deepest drilling to date at 402m has been undertaken in the south of the project area in diamond drill hole PP2 at site JV006 (see Figure 1 in link below). Here approximately 300m of almost continuous, predominantly sandy sediments have been intersected as well as two ignimbrites. An ignimbritic breccia was encountered below 300m, underlain by a sedimentary conglomerate (see Figure 3 in link below) containing brines with encouraging densities and conductivities and iron staining which suggests secondary permeability features. The seismic geophysical program identified the ignimbritic breccia horizon which shows considerable extent in the basin.

Brine Chemistry

Brines with high conductivity and density (1.18 - 1.22 g/cm3) have been intersected in thick sandy and gravelly aquifers, with the best results to date 308 mg/L after 27 hours of airlifting from 200m depth in hole PB1-JV003. A number of samples are pending from greater depths to 400m, where the brine has promising elevated conductivities and densities. Pump testing will occur in the near future as the rotary rig completes replication of the diamond drilling in larger diameter holes, allowing the installation of test production wells. Regular updates will be provided in future as drilling progresses. To date the lithium brines analysed show positive chemistry with low combined impurities (boron, sulphate, calcium, magnesium, iron). Brines pending analysis from deeper levels (350 - 400m) in JV006 also show high density (1.2 g/cm3). Deeper horizons are being targeted to locate higher grades and extend the potential size of the brine mineralisation. The suggested size of the brine body has made the Company contemplate further drilling rigs to accelerate the resource statement.

Production Well Drilling

The Company has recently completed three rotary drill-holes. One of which will be used as an aquifer test well to better understand hydraulic properties. This first production well is located at site JV006 in the south, and diamond drill-holes at this site will act as monitoring wells. The production well is installed with 6-inch PVC casing and screens in the hole drilled at a 9.5-inch diameter. A rotary drill hole was also drilled at JV003 in the west, to a depth of 242m (PP2-DV-003). Brine in the hole was air lifted which returned a lithium grade of 308 mg/L lithium following a period of 27 hours, , with an average Mg/Li ratio of 4.3. These grades are significantly higher than recorded from shallower levels at the same location, and the airlift sample at 30 minutes is interpreted to include contributions from shallower levels.

Geophysical Survey

A geophysical seismic survey is being undertaken using passive seismic techniques, with the aim of developing an understanding of basin geometry and thickness of the sediments hosting brine. This method distinguishes lithologies with highly contrasting seismic velocities such as unconsolidated lake sediments and harder cemented sediments or ignimbrites. To date 170 stations have been processed.

The results correlate well with dense lithologies intersected at 300m depth in PP2-JV003 in the south, and suggest the presence of unconsolidated sediments to a depth in excess of 500m under gravel cover. The survey suggested the majority of the basaltic material visible at surface is a thin veneer overlying lake sediments, which is very positive for the project as it increases the potential volume of sediments to host brines.

To view tables and figures, please visit:

About Lake Resources NL

Lake Resources NL (ASX:LKE) is a lithium exploration and development company focused on developing its three lithium brine projects and hard rock project in Argentina, all owned 100%. The leases are in a prime location among the lithium sector's largest players within the Lithium Triangle, where half of the world's lithium is produced. Lake holds one of the largest lithium tenement packages in Argentina (~200,000Ha) secured in 2016 prior to a significant 'rush' by major companies. The large holdings provide the potential to provide consistent security of supply demanded by battery makers and electric vehicle manufacturers.

The Kachi project covers 69,000 ha over a salt lake south of FMC's lithium operation and near Albemarle's Antofalla project in Catamarca Province. Drilling at Kachi has confirmed a large lithium brine bearing basin over 20km long, 15km wide and 400m to 800m deep. Drilling over Kachi (currently 16 drill holes, 3100m) has produced a maiden indicated and inferred resource of 4.4 Mt LCE (Indicated 1.0Mt and Inferred 3.4Mt) within a 8-17 Mt LCE exploration target (refer ASX announcement 27 November 2018).

A direct extraction technique is being tested in partnership with Lilac Solutions, which has shown 80-90% recoveries and lithium brine concentrations in excess of 3000 mg/L lithium and is planned to be trialled on site in tandem with conventional methods as part of a PFS to follow the resource statement. Scope exists to unlock considerable value through partnerships and corporate deals in the near term.

The Olaroz-Cauchari and Paso brine projects are located adjacent to major world class brine projects either in production or being developed in the highly prospective Jujuy Province. The Olaroz-Cauchari project is located in the same basin as Orocobre's Olaroz lithium production and adjoins Ganfeng Lithium/Lithium Americas Cauchari project, with high grade lithium (600 mg/L) with high flow rates drilled immediately across the lease boundary.

Two drill rigs are currently drilling at Cauchari with results anticipated to extend the proven resources in adjoining properties into LKE's area with results anticipated from November into December 2018. This will be followed by drilling extensions to the Olaroz area in LKE's 100% owned Olaroz leases.

Significant corporate transactions continue in adjacent leases with development of Ganfeng Lithium/Lithium Americas Cauchari project with Ganfeng announcing a US$237 million for 37% of the Cauchari project previously held by SQM. Nearby projects of Lithium X were acquired via a takeover offer of C$265 million completed March 2018. The northern half of Galaxy's Sal de Vida resource was purchased for US$280 million by POSCO in June 2018. These transactions imply an acquisition cost of US$55-110 million per 1 million tonnes of lithium carbonate equivalent (LCE) in resources.

The demand for lithium continues to be strong for lithium ion batteries in electric vehicles, according to recent data from the leading independent battery minerals consultant, Benchmark Mineral Intelligence. Supply continues to be constrained suggesting good opportunities for upstream lithium companies.



Steve Promnitz
Managing Director
Lake Resources N.L.
T: +61-2-9188-7864

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