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Why the Lake Resources (ASX:LKE) share price jumped 16% to a 52-week high

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The Lake Resources N.L. (ASX: LKE) share price has continued its positive run on Tuesday.

Earlier today the lithium-focused mineral exploration company’s shares were up 16% to a 52-week high of 18 cents.

Why is the Lake Resources share price at a 52-week high?

This morning Lake Resources announced that shallow drill testing is underway on-site at its flagship Kachi Lithium Brine Project, Argentina. This is part of the development activities required for the Definitive Feasibility Study (DFS).

According to the release, geophysical studies have assisted the planning of the shallow wells. These will be followed by further geotechnical studies, in addition to recent works conducted on proposed sites for Lilac Solutions’ direct lithium extraction demonstration plant and for the future production plant.

Pleasingly, the company advised that it is well financed for the DFS and these activities. Late last year it raised ~$3.4 million through its controlled placement agreement with Acuity Capital. These funds will be used towards the Kachi DFS, further exploration, and working capital.

Novonix update.

In addition to this, the company provided an update on its work with Novonix Ltd (ASX: NVX).

The release explains that Novonix continues its test work on Lake’s high purity lithium carbonate.

If all goes to plan, this will be used together with commercial battery cathode precursor materials to form a NMC622 cathode that will then be processed into NMC622 lithium-ion batteries for testing.

Management notes that this will enable Lake and its potential customers to make direct comparisons of Lake’s lithium product’s performance in familiar battery chemistries. Initial indications are anticipated to be reported next month.

Lake’s Managing Director Steve Promnitz commented: “Lake has started 2021 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.”

Investors will no doubt be watching the Lake Resources share price closely in February when the results from the tests are released.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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