LLKKF - Lake Resources NL (LLKKF) Investor Conference (Transcript)
2023-08-23 03:12:09 ET
Lake Resources NL (LLKKF)
Investor Conference Call
August 22, 2023 21:00 ET
Company Participants
Sean Miller - Senior Vice President of Field Development & Evaluation
David Dickson - Chief Executive Officer
Scott Munro - Senior Vice President of Technology, Strategy & Risk
Conference Call Participants
Presentation
Unidentified Company Representative
Good morning, and thanks for joining us today for Lake Resources Investor Webcast. Joining me today is CEO, David Dickson; Scott Munro, Senior Vice President of Technology Strategy and Risk; and Sean Miller, Senior Vice President of Field Operations. Our format today will be conversational, as Scott, Sean and David speak to the progress we have made since our June operational update. Accompanying our discussion today is a prepared slide presentation, which is user-controlled, so you can view it at your own pace.
I do want to call attention to Slide 2, which contains our disclaimer. Please be sure to read this slide before delving into the presentation materials. I will now turn this over to Sean to kick us off today. John, there’s been a couple of recent announcements regarding finding some additional drilling as well as successful extraction and injection testing. Could you address what this news means for us?
Sean Miller
Absolutely, Carol, thank you. We’re excited about the recent drilling results in the North and overall performance of the improvements in the operations. We’re seeing a large vertical and natural expansion of the lithium bearing by in the reservoir. – multiple exploration targets for injection of spend bring, the Nortel all intercepted lithium bearing brine above 200 milligrams per lead shop, which is fantastic for our reservoir. As a result of Brianne locations, additional exploration drilling and testing the suitable injection locations is currently underway. It’s worth mentioning that we are also seeing in areas outside of the central resource area, core grains, macromolecules that will provide for favorable conditions for Jacco. Operationally, we’ve seen a 40% improvement in drilling arise this year. We have just recently drilled 600 meters at 23 Elenor.
Previously, we had only drilled to 400 beaches as also Brian’s 322 meters within this well, averaging 232 milligrams per liter. We’ve also just successfully completed stage one of our extraction and injection tests, which is a key milestone to achieve DFS. We successfully projected 30 million liters over 27 days. This test demonstrates the viability of injection in the core resource area and provides complements that injection is possible in more geological favorable areas outside of the core sale. We believe it’s the first successful reinjection in Chiaka made grades from these tests were above 260 milligrams, which is 20% higher than what we saw during the exploration phase. I’m not pretty much covers the 2 main updates that have recently announced.
Unidentified Company Representative
That’s great. And will there be further work update coming prior to the PFS?
Sean Miller
Absolutely. So the full year is we'll see an update to our resource and our -- so their expected late 2 months.
David Dickson
Maybe if I can add just something that Sean has highlighted. Obviously, we've had 2 very promising press releases over those last couple of weeks. I just want to highlight to our shareholders that I fully understand, particularly on the press release around the drilling and the extraction and the reinjection because that was something which was a big focus for us to actually achieve that was a great result and great work by the team. And then secondly, we had the press release where we highlighted about drilling deep barge. This was a strategic decision that we took as a company to say, hey, we're seeing some good quality brands at the levels that were drilled before. But I think we've got indications of this reservoir actually goes deeper. So we have invested a small number of dollars and we decided to drill deeper and we're seeing these good results now over a period of time as we do more extensive drilling, then we'll get a better handle of what this actual reservoir looks like. But I think the promising thing is that we've seen some really good results both in reinjection and drilling deeper.
Unidentified Company Representative
That's really exciting to hear. And I'm sure as we get the Jorupgrades we'll have a better sense of what this really means. Scott, if I could turn to you now to pick up from where Sean left off. Can you just talk about the progress we've made over the past couple of months or the DFS and the EIA?
Scott Munro
Okay. So obviously, DFS and EIA are key targets for us this year, and we're really focused on delivering those on schedule as we communicated in the operational update. The operational update was key for us because it allowed us to confirm the decisions we've made on set validation. And so following those announcements, we're moving ahead with Phase 1 DFS, which is for 2 trains of 12,500 tonnes per annum battery-grade lithium carbonate capacity. And so we had to revise the designs and the layouts of the plan that we'd previously been looking at -- the key steps in this last month will finalize the heap material balance, which allows us to set up the plot plan and the drawings and layout. Those are now set the model reviews ongoing with a team at the moment allows us to move into hazard for the plant and then release all of the data on the process flow sheets to our environmental consultant to do the EIA work.
So really a key deliverable for us this monitors to get the heat material balance on with our partners, Alila, that’s achieved. It’s a key step for us moving forward towards the end of the year and delivery of the DFS. You can see on the left here on if you’re looking at the slides that were put together, this is the initial top plan that we’ve put together a more compact footprint than the previous plan that we looked at, and we’ve relocated the plant to the Southwest quadrant of the field to be closer to our planned extraction and reinjec’ion areas. All of that work has been combined in this refraction of the FS work. In addition, we are kicking off workshops both on the local community. So our second statutory consultation where the community for the EIA is scheduled to take place this more. And we have teams in country this week with the environmental consultant to go through all of the process technology that other we’ve created so far. So good progress there as well in both documents are on schedule for delivery in accordance to the previous plan.
Unidentified Company Representative
That's great. It sounds like a terrific progress on all those fronts. We've gotten a lot of questions about the power solutions since we last updated our investors. And I wondered if you could provide some additional color on where we are with Power Solutions, how much power we actually need and any details you can share?
Scott Munro
Okay. On the color, where we are at the moment for Phase 1 of the plant, we're looking at a requirement for around 60 megawatts of capacity for that first Phase 1 of the project. It comes in 2 steps. Train 1 requires about 20 to 25 megawatts of power for commissioning and start-up activities and then we step up to 60 megawatts. The reason the second train requires more than the first is because it includes reagent a manufacturer using the chlor-alkali plant. So really, what we're looking for is a solution that gives us access to 60 megawatts. Our best solution, as we communicated previously, our more technically sound solution is a grid connection. -- in discussions with local providers and the local statutory agency, we'll look at the grid in Argentina. It's been determined that the Northern outfromLaPuna and Salta is the best solution for us, and that's the one that we are working with our engineering contractor Distribu to perform a feasibility study for.
So they've been released to perform that work and we're expecting that in the not-too-distant future. That will be incorporated into the results of that will be incorporated into our overall DFS plan so that we'll grow a good solution for both power and the plants well. That capacity, so the lines that we plan to burn from the NO can actually accommodate more projects than just us. So that's a key part of the solution here. So we have started initial discussions with other potential industrial users in the Corrigo so that we can actually share infrastructure and share capacity. So we, as I've mentioned previously, for Phase 1, we only need 60 megawatts of capacity, the lines that we're looking at and the lines that we're sizing up at the moment actually have a capacity of 220 megawatts in total capacity, so we're looking at partnering up with 2 or 3 other users to work with the system. In addition, the next phase, we'll be doing technical work up to now really getting feasibility down, understanding what our requirements are. Next phase is really moving on to that commercial assessment. So we have engaged with more independent per producers from the local market. We're going to run a commercial process for them. They are signed up to take part and that will be happening in the second half of this month with the support of our consultant in-country, GME.
So all of that’s in place is moving forward. I did want to add because we had – did have some questions about whether we were looking at solar for the project. So the first 20, 25 megawatts worth of power at site that we need for Train 1. We plan to produce a significant proportion of that using our own solar spread at site. So we are always going to have a minimum solar contribution that site. But there is an alternative that we continue to look at, which is for an all solar and battery backup solution instead of the transmission system. – that hasn’t yet been technically proven, but we continue to pursue it as an alternative to the transmission system. So solar is part of our mix, all the solutions, but it could become a larger part of our mix, depending on how the technical valuations go.
David Dickson
And maybe if I just can to what Scott just talked about. And then when we go back to the general operational update. I don't think our shareholders really understood the complexes are actually getting power to what action since the 19th of June, all the work that Scott and his team have done to progress probably quicker than anticipated. And I think we have from state is that we're seeing technical socials. And as Scott said, now those tenant cosolution now we're able to decide what is the best for us. But the big element is what is going to be the commercial agreement associated in auctions. And so Scott and his team will address that over this next as next coming months. But I think just for our shareholders' benefit is that we have the visibility of a number of carications that like core stays for the development. And it's probably also worth adding that the appetite a country from the IPPs is high for this type of project. The most profitable sector for our providers in Argentina is business-to-business, private power purchase agreements, and that's exactly what we are. That's their main opportunity to make return on their investment. They get very small profit allocation from the government for other types of business. So we've had lots of interest in the 4 main bar providers in country participate in our project, and that really helps us to move the debt.
Unidentified Company Representative
That’s great. I can tell from the questions that have come in about power that I think this was an area of concern given how remote we are in Argentina, given what it would take to pull this together. And I recall at the operational update, we talked about several good solutions on more from the South and then the combinations are up. So it sounds like you can make great progress on this front. David, where are you most focused now, given that Scott and Sean are deep in the operations and have breaks well in hand as marked by the progress that we’re reporting on, where are you most focused at this point?
David Dickson
Yes. So we -- well, if we just step back, what has not been this future months since we did the operation level. You've heard from Scan, Sean, great progress on both on the drill and the extraction side, that Jon said and then scope from really defining the project, defining what this thing is going to look like looking at solving the issues around power. And with all that, we said back in the 18th of June, we're going to deliver DFS by December and your fertility that is still on schedule. So we're 2 months further along, and we're still on target for the end of the year so. And the benefit of having these updates that we can provide to shareholders updates on the progress in the DFS. So I was say we're happy that, and we're dealing with the right issues, right? So since the operational update, and I think I said before, we have all the technical and management resources in place now to execute, right?
So my focus with some of the team is now what are the strategic elements that we have to address to make sure that actually is going to be successful. And there's a number of things that I'm focusing my attention on. I mean, firstly, there's a political signal. We get a lot of questions about the clinical site in Argentina and there's very difficult to address those questions when the election isn't until October, and we'll get to see that come of that. But as I've said consistently is that whenever we talk to which party in Argentina, it's clear that whoever has been a win this election has got a large core for developing the lithium market within Argentina. And one poorly for us, it is that we got a lot of strong support actually within the province or cadamarket. But politically, it looks a little bit more stable. And so for us, we're catching it online. I think we're in a good place. So there's nothing much we can do on the clinical side, also we monitor on a BLA basis. We have Malhan country monitoring things regularly and also conversing with government officials, international government officials, et cetera.
So I think we've got on top of it. I was in Argentina with both Scott and Shawn, just a few weeks ago and spent a lot of time talking to ambassadors from various countries, actually talking to the government. So I think from that aspect, the late resources in the Catcher development is well known within this sector. But the big focus now is, okay, how do we finance ourselves from now and ultimately raise money for the large capitals needed to execute. So a lot of the focus has been in that area looking at the CFAs and then also looking at the capital needs. Again, we've highlighted as we have CAs in place which are nonbranding today. And we also have a plan in place to look at the ECA-backed finance for this Catcher. Where we sit today is the trigger for actually again to the next phase with these 2 elements is really win with the deliver of the DFS, right? So in the meantime, until that point, we are in regular dialogue. I'm talking to the owners of the 2 CFAs, both SKO and WMC is a very regular basis. We're talking to the ECAs. We're talking to the banks on a regular basis. Scott and I will be in another 2 in a few weeks.
Again, talking to a number of these stakeholders. But the critical time is going to be once we publish PFS. That really then triggers a number of things where we've got to get to work to get a number of new things upon such really where the big will focus is and where I'm focused on a lot of efforts today.
Unidentified Company Representative
So you're no less busy just shifting your focus -- just shifting the focus.
David Dickson
Making cash a reality.
Unidentified Company Representative
That's great. Well, I mean I think it's safe to say that when you look at what's gone on in just these 8 weeks since we last never the investment community, we can say that we're on target. The drilling program continues to confirm the large scale and quality of our brine process plant design is underway. We've made important progress towards finalizing the power solution and again, we're on target for completion of DFS in December, which will allow us then to move on to these other conversations with the export credit agencies and finalizing our conditional framework agreements. So with that, I know we promised investors we would address the many questions that we've gotten since June '19.
And if you turn to Slide 8 of the presentation, we've organized the questions by topic. And we'll do our best to address as many of these today as we thought like possible. But please continue to send in your questions, and I promise you we will get back to you promptly. And for those of you who have taken the time to submit them. I want to thank you very much for your participation. So I'm going to start with questions we've received around the DLE process and the Live relationship. Still lots of concern about whether LiLAC technology can work at commercial scale. Where are we with LiLAC with testing the technology and where do we get the comfort that this will work in a commercial scale?
Scott Munro
Yes. So obviously, we've had the demo plant in operation at Cache. -- well, it ran for about 6 months, we achieved the main milestones, and we are continuing to operate or to sell OpEx. So the major technological scale up for that deployment has been done. So we've moved from bench to demo size the demo size to commercial size, the scale up is actually significantly smaller. So all of our other magnitude scale-ups are no longer required levers to know the largest single scale apple would like to do is a 3:1 or 1 of the components -- so what we do have is multiples of these do in stock. So we'll have multiple modules to make the project work. So in terms of scale up, we'll be very little left to go to go from where we are now, where we want to get to. Obviously, the reason for the DFS is to show commerciality of that technology, and we're tracking towards delivering that in December.
What I will say is that the product that hellbent getting from the DL is exceptionally clean. So the rural that we are taking to Seltorksto turn into Carbon, it’s some of the cleanest products that, that contractor has ever had to handle. So we’re very confident that the products we’re going to get out of this entire system. – is going to be a high quality, and it’s going to be very repeatable, and we don’t have a lot of moving parts when it comes to what we put in and what we take out. So I think for us, all of the major milestones for the Live been achieved. We are confident now that we’re going to get a repeatable deliverable product that comes out at the end of this plan. And we know that people who want to buy it, by getting some extremely high-quality product. So I think for us, not to underplay the DLE technology, but it's the part that we have spent so much payment effort getting to understand that we are comfortable now that this is ready to move from demo.
Unidentified Company Representative
That’s great to hear. And in terms of the relationship with LiLAC, do you feel comfortable that this is a relationship that will go the distance and that will – are they 25% owners today?
Scott Munro
No, we're currently at 20%, not because they haven't achieved all the requirements for that. It's just we need to have signed an agreed offtake agreement to get someone to sign off against that last 5%. So it's nothing that iLohas done and still expect that they will achieve 25% as we move through the next stages of the project -- the relationship, I would say, is barely very constructive. They've got a lot of great people. They've got a lot of people with experience in large construction projects that they've brought on their team and our team are working together as Warren unit, and it's helped us to progress the things that the heat material balances and the plant layout in line with the schedule that we put together. So we haven't had any time and we'll have to stop and restart things. We're moving forward together as just add to that scope, we're also seeing a lot of collaboration within our hydrogeology teams as well and sharing it the way soloing together around the new codes...
David Dickson
Just to add what Scott was saying, we’re still doing some work at say at the value. And I said this to shareholders before. I think we’re more in the phase of – it is worth tinkering with the process, but we’re playing with, of course, that, and I’ve said this publicly make things or does DoD work. It’s not about the conduction side about lower going to need the capital cost and ultimately, what’s going to be the OpEx, right? That’s what’s going to make us compete. And that’s where the focus is on. And I think people need to shift away from this deal working on the work, but it’s more focused on how commercial is and that’s what Scott and the teams are working with. I’m working with Lioviouslyha their more senior level and then into that you get with regards to strategically delivering this project because as you said, if they are – they become a 25% shareholder look at 25% of the equity component of refinancing the Gulf of play so we’re going to work closer with them to work strategically and how we raise that money. But to Scott’s point, I think the relationship to be is very good shot.
Unidentified Company Representative
And you've mentioned a couple of times that the demo plant is still up and running. Are you continuing to produce lithium carbonate at the demo plant and can you sell it as a way to get revenue to...
Scott Munro
So the demo plant for us is actually split into 2 components, right? We've got the on-site demo plant for the DLE and so that produces, let's say, import from our right. So as we announced earlier this year, when we hit in Wilson, we shipped that lithium chloride from site that was about 120,000 liters of lithium chloride that we then send to our contract to SoftWorks in Canada. -- and it is actually at SoftWorks where we produce lithium carbonate. So that first 120,000 liters we have processed the first 2 batches of 40,000 liters each, and we're doing the final 40,000 liter batch right now. So we will have all of our lithium carbonate in place within the next 2 weeks. That lithium carbonate is a relatively small quantity. The reason it's been produced is so that we've got enough to do testing and to demonstrate quality of what we produce and to have available samples to give to potential off-takers.
So really, what we’re producing here is subcommercial scale, we couldn’t sell it even if we wanted to because we don’t have a production licensing country, what we’ll say is we are also still producing lithium florist – we don’t intend to tell that in lithium carboning rig. What we want is more lithium chloride samples available to help us when we move into the feed and the deal design phase of the project because we do need to do it then tested on some of the downstream elements. So we have material. We’ve got sufficient to do the testing that we require for BFS and eFeedindecl desi and we also have sufficient to satisfy any offtake up when they’re looking for samples to make sure that what they’re buying is what they want to buy. That’s what we’ll try to do.
Unidentified Company Representative
That makes a lot of sense, very clear answer. Thanks for walking us through that. Scott, I know that you've given a lot of proof points of progress on the DFS. We still have investors concerned that maybe we're going to get to December and not be ready. What components would you say are most at risk?
Scott Munro
The challenge always with engineering estimates is getting enough response back from the supply chain, right? Because supply chain is a big component of our spend. We can do estimates on an hours and construction hours and logistics and all these things. But we will require feedback from the supply chain, and that’s for major equipment vendors, all of the components that make up the system. And so we want a good quality BFX. We want something that is supported by actual bids from potential suppliers. We don’t want something that’s just taken out of a handbook and transferred into the estimate. So the critical part for us is to make sure that we get good engagement with supply chip. And my team is out there working the phones, working their relationships so that when the packages show up on the debt, people are ready to respond, they are willing to respond because it obviously takes in some effort, and they know this is for DFS. It’s not for a actions of about where they can win some work. So we are using relationships that have been developed over the last few months to make sure that we get the responses we need on the major pack’ges that will form the basis for our estimate.
Unidentified Company Representative
So moving on to the offtake agreements or the conditional framework agreement to be more precise that we have in place right now. A lot of questions around the clarity on the status of these agreements and whether they're still holding anti-agreed price point. that they were created at, especially in light of the share price, which was 5 multiples at the current level. With the agreed equity holding and capital will be honored?
David Dickson
So these are, as you said, condition timework agreements – and the sugar wines, when we published would be at – there’s a lot of things that are going to be happening between been, I guess, 4 months away when the disposed. At that point, that’s when we start to negotiate where will our stock price be in Lizama very cost to the deck. But the way I always address this was that end of the day was a huge demand lithium carbonate barring markets. And so when you look at the other deals again is on the market, there’s everything to equity injections to injections at asset level to prepay it. So I think in those negotiations is a long way to go. What is going to come back to is how much the offtakers are prepared to pay as an investment to get their 25,000 or 50,000 tons of offtake. And we can talk about it where I mean the market today is very healthy. With regards for – on the supply side with regards to the supply and demand side looking forward. And we can touch on that when we talk about market and stuff. But we’re not extending here concerned and we certainly not getting any indications from our 2 off-takers that they don’t want to continue with the agreement. The thing is there’s nothing really happens until we get to that point of debt.
Unidentified Company Representative
Would guess that we're going to have a similar answer in terms of working with the export credit agencies and questions around project funding because you mentioned earlier that a trigger point for those conversations is also the completion of the DFS. But we have heard from investors that they're concerned about how we're going to fund this project given the growth of CapEx that we announced back in June. The range that we provided was $1.1 billion to $1.5 billion needed for Phase 1. And with our current market cap and unresolved power supply solution -- and I'm quoting the question. What is our view on whether this will still be an attractive project to fund from an export credit agency's perspective?
David Dickson
Yes. So first of almost, what we've demonstrated back in operation, what it is. The economics of this project even on those CapEx levels are still very attractive. And the question will always be as what is the long term within price? And again, we can talk about that later. I think for the project financing of Barabe understand is that today, we have to many Cs and Gansmo support of the project. And we did present this data of these numbers to those support stakeholders partenariat -- we are still in dialogue with those states. What has that is -- we don't -- we give a band on CapEx between 1.1 and 1.5%. So we can't sit down to negotiate with the banks until we start to firm up on our numbers and on stronger areas, that's going to be one of the outputs from the DF. So again, when we get the DFS public, then we have a number of the level of CapEx that we need to raise. We'll obviously have a split between equity and debt, and then it really will allow us to get to work. We don't need to fund the net places until Q1 of 2025 when is the time that we're targeting to go to a final investment decision.
So today, we have time on our side to work through what is best suite to finance this project. But certainly, CA is having run away and the banks had not run away based on new numbers. I also think a little bit of that is reflective of that in the market since we work in our announcement, there's a number of other companies who have started to announce higher CapEx range. 2 weeks ago, there was one company who can enter PFS with a CapEx of $1.3 billion or 7,000 tonnes. -- not out fire from where we will be given the operational update. So I think the banks and ECAs, now we're starting to adjust the reason level of CapEx numbers previously were only significantly underestimated. But ultimately, at the end of the day, the banks are focused and is is always focused on one is a dance. They just want to be tank there and worse. And if you look at lithium market, and it was not to look at what is being said in the political or the hotel -- we look at long-term price and then what we start to see is a couple of years ago, people are looking at PFS of $14,000 a ton. Hess had 70,000 of can BFS at $3,000 a tonne. So people are now starting to creep up on the method pricing, which always gets back to say the economics projects will stack up. The rate don't know exactly what this one's going to look like. I [indiscernible] under path of what is going to be some sort of ECA back came.
Unidentified Company Representative
How do you think about working capital from now to FID?
David Dickson
No, that’s a really good question. We – and I’ve spoke 2 weeks ago at the end of June 30, the annually Australian financial year. We had still had something like $90 million librough terms is just over USD 60 million – on average or on Marvis about $5 million lots. So based on that, we sell, we have similar lot 12 months of run rate may, -- we have other things that we would like to do in that period of time. And then on had a chart hens really good work on drilling and listing works. So used to move at some point to increase the land engineering towel to select. We feed dare contractor and maybe EPCM. So there are going to be some lumps that are going to come along. So what we’re looking at is our budget, our facial plan with helping our capital strategy. And then part of our capital strategy also taken into consideration like we expect to start to see proceeds from our off-ticker or something like that. So we’re very much focused on how much money we’re spending, how much money will go up much when we need to spend and then everybody manage that from the capital to until middle of next year.
Unidentified Company Representative
So I would imagine that when you think about other projects and drilling at other sites, so sure that's a consideration is protecting the cash that we have to be used at CACI. But we are asked quite often about whether our focus is exclusively on getting patch up and running, what would we consider between now and time to version drilling and some of our other tenements?
Sean Miller
Yes, absolutely. So that is great. We haven’t been locally on cut up to date. What we are doing now though is starting to lead our attention to other sentiments of projects that help – we’ve done a lot of work in the background on just making sure our permits and licensing, prognose areas. The next step is for the team to go through and evaluate all of the work and the dark that we have today. So basically all an opinion on each of the areas of what the best strategy is to play forward. And then basically in taking poses the leadership team to work out where our money is best states. We want to make sure as we’re spending our cash. We’re going to get a return for it. We’ve a lot of been drilling necessarily in those areas. So with all the strategic group within the business, and we are moving attention to those other projects now.
David Dickson
Yes. An example, look at it is what we've just announced is we'll spend a little bit more money on drilling deep red capture. -- ultimately, we're looking at big expansion that didn't catch you this allowed us to explore deeper where we have indications that was buying resin so good results on that. So as Sean with his team, we're looking at strategically where there's the best place to go to get our dollars, but also we're certainly happy with the money spent on to catch and going.
Unidentified Company Representative
And just as a reminder to some investors who might not be familiar, our other projects are also in Argentina, which brings me to my next question around the political instability. You've mentioned it before, David, that it's certainly a big year for Argentina, there's a presidential election coming up in October. What is the impact of the hyperinflation we're seeing there and access to supplies and labor. What's the impact on the company?
David Dickson
Yes. So the question just asked them well. I think today or like resources, the impact is minimal, not saying right, but understanding is that sola a company on average spent $5 million a month. Some of that is in Argentina. So technically, we actually don’t spend a lot of money in Argentina and Argentina today. When it comes to us spend a lot of money in Argentina is broadly is into 2025 onwards. So obviously, we’re looking at more longer range when it’s going to happen. But between now and then, there’s election has to happen. There’ll be a follower from the election. And we saw what happened in the primaries only a week ago, where everybody was caught by surprise of the result of the primaries now. There’s going to be a lot of activity going on between now and also October 2 for the action – but that’s where these things will start to look at in the last ones. We know who’s on power. And then there on litho market, whether there going in the economy, there’s just so many so many moving parts. But what is interesting to consider though is that we’re looking at production same half of 2027. By the time we get to that point, there’s going to be another general election, roughly about time. So there’s a lot of politics that we’re going to get through between now and against as I said, today, we were not spending excuse amount of money in Argentina. So it is an impact in the company significantly. But certainly, we’re watching.
Unidentified Company Representative
Yes, lots of moving parts. And while we are asking you to look for your crystal ball, tell us what you're thinking about listing on pricing.
David Dickson
So in anticipation of Denis was back looking at some of the recent benchmark in fast markets. And I think I've always said that again, combat my short tenure in the mining business and lithium business with less than long one. When you're taking it for sure is an extremely fragmented the forecast looking forward are really fragmented. I think what I'm confident is the lithium price then is going to start to move up. But -- and I look at -- I said earlier, with some of the prices that were for PFL in some time ago $42,000 a tonne, the most recent accelerate developer we're using the 30,000 of plot. And so things are shifting in that direction. Look at some of the benchmarks, it's interesting. You look at it easy penetration was to go ahead as planned by the governments want to do the number of cones and you look at the ambition of the big large car manufacturers is intensive than the demand for lithium by 2030 is over 5 million tonnes or million. Today, we produce less than a million tons.
And if you look at all the projects that are planned to go ahead, we might get to just poor till – that tells me a significant investor comanagement the whole supply and that the balance. So I think for us, we use the dot pressure up there and real I’ll let Scott maybe add to it. We used $23,000 per ton as our base case. And we run another case of spot price and I think the week deal. But yes, I mean, I think, Germany, woodvithin late resources as you anticipate that within prices going to be on the up. That’s obviously not talking about smart price in tin we’re talking about prices from 27 or 2021 was urine production. But yes, and I don’t see any other way why it’s not as penetration – we can see it when we as you can see in Europe but starting to be on to hear your views on within pricing.
Scott Munro
Well, it was interesting. I was in Salta last week for the symposium. They had all of the major pricing forecast agencies or and Joe Lowry, Master Life goes given more of the notes peaches. And it was interesting how everyone was forecasting the supply and demand would be roughly in balance by 2030. And then each one of them said, but they think everyone might be a little bit optimistic on the amount of supply that's going to come into the market. Because if you look at the number of projects we need to make that balance happen ex allot projects. I mean most of those projects need to come in Argentina. And so the strange thing about pricing forecast is 2 benchmarks. One forecast is a surplus, on forecast a deficit, but they're all forecasting roughly the same price, and it's roughly the price that we used in our market update. And so it's interesting that even though wares shown surplus and wanes deficit that they're both coming out with the same number.
So it will be interesting to see where this thing trends. It does need an awful lot of projects to come onstream in the next 5, 6 years, Ditto achieve the balance that everyone is talking about. And again, just anecdotally, he talked to end users this material. And they casually throw out that they're going to have 600% growth in 5, 6 years. That is a lot of projects. That is a lot of lift. And as on the supply side in that you work really well and really have to make that half. So that should some tell us that we should have growing demand, strong market and pricing that should be supported. So we started to ported.
Unidentified Company Representative
That's a really exciting forecast, and I guess we'll see how it plays out. Well, I just want to thank you for joining me here today because I'm really excited to connect with our investors and keep the investment community closely posted on our progress on our perspectives. And we look forward to staying in touch with all of you and reporting back in about a month's time. Thanks for your time today and talk soon. Thank you.
David Dickson
Thank you. Bye.
Question-and-Answer Session
End of Q&A
For further details see:
Lake Resources NL (LLKKF) Investor Conference (Transcript)