The lithium bonanza is far from over, and everyone is trying to get in on the action.
Lake Resources NL [ASX:LKE] is the latest lithium explorer to go parabolic, with their share price doubling over the past week.
Today though, the company had a new update. Confirming that a definitive feasibility study (DFS) is on the way. News that impressed at the market open but has seen shares slip back to a neutral position at time of writing.
Let’s delve into the details.
Lake Resources Drilling begins
Dubbing themselves a ‘clean lithium developer’, Lake Resources has declared that drill tests are underway — part of a necessary process to bring them closer to finalising their DFS.
Despite only being shallow, this drilling will be vital. Allowing for further geotechnical investigation on the Argentinian site. Which, of course, is beholden to COVID-19 safety protocols.
Lake Resources is hoping and planning to extract 20,000 litres of brine, samples that will be sent to California for testing and analysis. Again, all of which will help progress the DFS.
Speaking of which, management has also confirmed that the DFS is ‘fully funded’, thanks largely to a specific share placement to Acuity Capital. A deal that should hopefully get Lake Resources the data it needs to decide whether to commit to this project or not.
And as Managing Director Steve Promnitz comments, this is exactly how Lake wanted to start 2021:
‘Lake has started 20211 on the front foot by formally launching our Kachi DFS, and ramping up engagement with investors and potential industry partners. Interest in the sector has never been stronger in environmentally responsible, direct lithium extractions.’
Now they just have to back that claim up with an actual mine. Which will rely on said ‘interest’.
What’s next for the LKE share price?
Obviously, the immediate focus is the results of this shallow drilling program. The first steps towards collecting data for the DFS.
Don’t expect that focus to change too much until the study is done either. Because all the engagement and investor liaising will be worthless if the project isn’t promising.
For current shareholders, the wait now continues. With the results of this study likely to dictate what Lake does next. As you’d expect.
As such, if you’re looking for more immediate lithium investments, Lake may not be right for you. Instead, we recommend you check out our latest report on the sector. Including three of our favourite lithium stock picks for 2021.
Grab your copy of this report, right here.
For Money Morning