(Reuters) – Short seller J Capital Research alleged on Monday that Lake Resources NL’s plan to produce lithium in Argentina is based on a Lilac Solutions Inc process that is unlikely to work, the latest attack on a wave of news technologies to produce electric vehicle battery metal.
Shares of Lake, which are traded in Australia, fell 6.3% on Monday after J Capital’s report https://www.jcapitalresearch.com/uploads/2/0/0/3/20032477/2022_07_11_lke. pdf described several alleged missteps by Lake’s management and claimed that the technology developed by Lilac is too expensive to operate and uses too much fresh water.
Private company Lilac is among the most prominent developers of so-called Direct Lithium Extraction (DLE) technologies aimed at extracting battery metal from brine using a range of equipment, although none has worked on a commercial scale. (Full story) https://www.Reuters.com/business/sustainable-business/new-lithium-technology-can-help-world-go-green-if-it-works-2022-04-07 (Full story ) https://www.Reuters.com/article/mining-lithium-technology-idCNL1N2UK302
“Lake has hitched his cart to Lilac’s yet-to-be-proven technology,” J Capital Research said in the 17-page report. “Investors still have no evidence that Lilac DLE technology works at scale, and if so, at what price.”
Lilac signed an agreement with Lake last September to develop the Kachi lithium project in Argentina, part of a plan to transition from a technology company to a lithium producer. https://www.Reuters.com/business/sustainable-business/australias-lake-resources-teams-up-with-clean-tech-firm-lilac-develop-argentina-2021-09-21/#:~: text=MELBOURNE%2C%20Sept%2022%20(Reuters), up%20more%20than%2020%25%20higher
In April, Ford Motor Co signed a preliminary lithium supply agreement with Lake. (Full story) https://www.Reuters.com/article/ford-motor-lithium-lake-resources-idCAKCN2M31K1
Representatives for Lake could not immediately be reached for comment. J Capital declined to disclose the size of its short position.
Lilac’s technology uses ceramic beads to draw in the lithium in discontinuous cycles, similar to a washing machine, after which a mixture of water and acid is used to wash the metal.
J Capital alleges in the report that the beads only operate for 150 cycles, making Lake’s project unprofitable.
Lilac managing director Dave Snydacker said that figure was “factually inaccurate” and that his company had tested the balls to over 1,000 cycles.
“I don’t know where they’re getting that number from. Maybe they’re guessing,” Snydacker told Reuters, adding his company plans to deliver a pilot plant to the Lake site in Kachi by the end of the day. of the month.
“We have a high degree of confidence in the success of our plant because we have backed the design with so much test work.”
(Reporting by Ernest Scheyder; Editing by Marguerita Choy)
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