Australia-listed lithium explorer Lake Resources announced on Monday further delays to its flagship Kachi project in Argentina and a new development approach.

The integrated brine project in Catamarca province was planned to start its 50,000 tonnes/year production capacity by 2024. However, Lake Resources now see a two-phased approach starting in Q4 2027 makes more sense. It plans to commission four trains in two stages, with full capacity expected in 2031, although the last train should come online in Q4 2030.

Company’s ceo David Dickson told investors in a webcast monitored by Kallanish that the big drivers for the new strategy were to reduce risk, access to supply chain and resources, but also the company’s ability to raise capital.

He adds in a statement the decision comes after findings in the past nine months regarding infrastructure, power, logistics requirements and Lake Resource’s reservoirs. “This path to production will unlock value and maximise execution efficiency. This approach also provides expansion optionality to 50,000 t/y, and potentially more,” Dickson says.

Phase 1, which will feature two trains of 12,500 t/y lithium carbonate each, is set to cost $1.1-1.5 billion, according to the company’s internal estimates. The capex estimate could change in the definitive feasibility study (DFS) planned for completion by year-end, Kallanish understands.

Despite receiving support from its debt providers and offtake partners, Lake Resources seems to have failed to please investors. Following the announcement, its stock price sunk 20% to AUD 0.38 ($0.26)/share.

Dickson says he plans to start negotiations on binding offtake agreements over the next six months, although details weren’t given. Previous conditional framework agreements include two 25,000 t/y deals - one with SK On and one with WMC Energy. It had also held early negotiations with Ford and Hanwa.

Lake’s vp of technology, strategy and risk Scott Munro told investors the company’s relationship with its direct lithium extraction (DLE) technology partner, Lilac Solutions, is working “really well” following earlier distress. The technology has been validated with Kachi samples delivering purity higher than 99.8%, the company claims.