The Lake Resources NL (ASX: LKE) share price is surging higher, up 8.96% in early trade.
The ASX lithium stock closed yesterday trading at $1.00 per share and is currently fetching $1.095.
This comes in the wake of a new lithium deal announced this morning.
What new lithium deal was reported?
The Lake Resources share price is running hot after the miner announced a strategic investment and offtake agreement with WMC Energy at its Kachi Project, located in Argentina.
The Conditional Framework Agreement (CFA) will see WMC Energy take a 10% strategic investment in Lake Resources for $1.20 per share. That's 20% above the Lake Resources share price on opening this morning.
The offtake agreement is for 50% of the Kachi Project's lithium product, up to 25,000 metric tons per annum (mtpa) of battery grade lithium (LCE). The offtake will be priced based on an agreed market price formula. It lasts for an initial 10-year term, with an option to extend for another five years.
Commenting on the collaboration, Lake Resources executive chairman Stu Crow said:
The CFA delivers a long-term strategic alignment with WMC and its supply chain into its European and North American customers. WMC Energy has a track record of being a market leader in nuclear fuels and expanded into battery materials including lithium to serve predominantly the US and European lithium-ion battery supply chain for EVs with their strategic needs.
Lake Resources CEO David Dickson added, "Increasing customer and consumer scrutiny around the environmental and ethical credentials of lithium projects particularly from the European markets drives our focus on sustainable extraction."
Also likely spurring the Lake Resources share price higher today is the prospect that the Kachi Project will be fully developed faster.
Amrish Ritoe, director of corporate business development for WMC's battery materials team, said, "With our extensive network in Europe and North America, we are well positioned to create a partnership with Lake and others that will help Lake to accelerate the development of the Kachi Project."
The agreement remains subject to Lake Resources achieving a standard set of conditions.
Lake Resources share price snapshot
With today's intraday gains factored in, the Lake Resources share price is up an impressive 91% over the past 12 months. That compares to a 7% loss posted by the All Ordinaries Index (ASX: XAO) over the full year.
