In afternoon trade, the Lake Resources N.L. (ASX: LKE) share price has given back its morning gains and slipped into the red.
At the time of writing, the lithium developer's shares are down over 1% to $1.13.
Why is the Lake Resources share price falling?
Investors have been selling down the Lake Resources share price this afternoon following the release of another short attack from J Capital.
According to the release, the investment firm has secured information from the United Kingdom that paints a very different picture to an announcement from August 2021 relating to potential funding from the UK Export Finance (UKEF).
That announcement was titled "Strong Expression of Interest to Fund Project to approximately 70% of total Kachi Project funding requirements."
However, J Capital alleges that UKEF was not a fan of the announcement.
What is J Capital saying?
Below are a few key paragraphs from J Capital's update:
We made a Freedom of Information Act (FOIA) application to the UK government to verify Lake Resources' (Lake) claim that it has "confirmed" funding from UK Export Finance (UKEF). These documents seem to reveal that Lake has made statements that are incorrect about the expression of interest (EOI) from UKEF. UKEF says that Lake is just at the start of the application process.
Lake claims the EOI from UKEF provided in August 2021 "considerably de-risks the project." A cache of documents released by UKEF under the FOIA request shows a conflict between the information Lake presents to the market and UKEF's view of the EOI supporting the project.
UKEF appears to be critical of Lake's press release for characterizing the EOI as a "strong" expression of interest and has instructed Lake not to say that the EOI is an endorsement of the Kachi project's ESG benefits. The same cache of documents takes issue with a Reuters article quoting then-Managing Director, Stephen Promnitz saying the UKEF "really liked the ESG benefits of Kachi." In respect to this, the UKEF has said "Lake should refrain from inferring a statement from UKEF".
J Capital also highlights that despite the above, Lake Resources stated in its annual report that there is a 100% probability that its Chairman, Stu Crow, will receive 5 million performance rights that are dependent on signing finance agreements for the project. It adds:
Unless there have been some recent undisclosed developments, Lake is aware the financing from UKEF is not "confirmed" and yet, despite this, they have made provision for Mr Crow to receive the performance rights that have now vested.
Lake Resources has not yet responded to the report.
