Lake Resources

Articles From: J Capital Research
Website: J Capital Research

We made a Freedom of Information Act (FOIA) application to the UK government to verify Lake Resources’ (Lake) claim that it has “confirmed” funding from UK Export Finance (UKEF). These documents seem to reveal that Lake has made statements about the expression of interest (EOI) from UKEF that are incorrect. UKEF says that Lake is just at the start of the application process. Despite Lake’s spin to promote the stock, the facts are the project has:

• no export financing in place
• no binding offtake agreements
• no definitive feasibility study

Lake claims the EOI from UKEF provided in August 2021 “considerably de-risks the project.” A cache of documents released by UKEF under the FOIA request shows a conflict between the information Lake presents to the market and UKEF’s view of the EOI supporting the project. UKEF appears to be critical of Lake’s press release for characterizing the EOI as a “strong” expression of interest and has instructed Lake not to say that the EOI is an endorsement of the Kachi project’s ESG benefits. The same cache of documents takes issue with a Reuters article quoting then Managing Director, Stephen Promnitz saying the UKEF “really liked the ESG benefits of Kachi.” In respect to this, the UKEF has said “Lake should refrain from inferring a statement from UKEF”.

Lake may be misleading investors where it says in its 2022 Annual Report, “It has been confirmed that the project will be funded 70% by international credit agencies sourced by SD Capital and GKB Ventures, with the remainder being provided by equity.” There have been no ASX announcements to this effect, which seems surprising in light of how significant the sourcing of funding is to the project. Chairman Stuart Crow’s 5 million performance rights, which are dependent on signing agreements to finance the Kachi project, are now considered to have 100% probability of being achieved. Unless there have been some recent undisclosed developments, Lake is aware the financing from UKEF is not “confirmed” and yet, despite this, they have made provision for Crow to receive the performance rights that have now vested.

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Originally Posted November 7, 2022 – Lake Resources

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