The Lake Resources N.L. (ASX: LKE) share price is dropping on Thursday.
In morning trade, the lithium developer's shares are down 2% to 99 cents.
Where next for the Lake Resources share price?
Today's decline by the Lake Resources share price could be short-lived according to a broker note out of Bell Potter this morning.
The note reveals that the broker remains very positive on the lithium developer following the announcement of a new offtake agreement and equity investment.
This has seen Bell Potter retain its speculative buy rating with a slightly trimmed price target of $2.52.
Based on the current Lake Resources share price, this suggests that investors could more than double their money over the next 12 months.
Though, Bell Potter warns that its speculative risk rating recognises a higher level of risk and volatility of returns.
What did the broker say?
Bell Potter highlights that Lake Resources has signed a conditional 25ktpa offtake and 10% equity agreement with SK On. This follows a recent deal with WMC Energy, which is also conditional, for the same offtake and equity.
It was pleased with the agreements and is now waiting for a successful demonstration of the DLE technology to de-risk matters.
It commented:
LKE's Kachi lithium project in Argentina is strategic in terms of scale, applied technology and uncommitted product offtake. Demonstrating the feasibility of ion exchange lithium extraction is key to de-risking the project; with success likely to disrupt traditional brine lithium production. The technology also brings significant ESG benefits including less land disturbance and water consumption. Key near term value catalysts include Kachi demonstration plant performance and a definitive feasibility study by the end of 2022, then progressing through to product qualification, binding offtake and financing from early 2023 for a subsequent final investment decision.
