Lake Resources share price rockets 36% on 'significant milestone'

Lake Resources shares are flying on Tuesday amid an update on the Kachi Project.

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The Lake Resources N.L. (ASX: LKE) share price is off to the moon on Tuesday with a 36% gain.

Lake Resources shares hit an intraday high of 28.5 cents this morning after the company released an update about its flagship Kachi Project.

The lithium explorer has reported successful extraction and injection testing at the site.

The Lake Resources share price is currently 26.5 cents, up 26%.

Lake Resources share price spikes on news of 'milestone'

The extraction and injection tests were carried out with three purposes in mind, the company said.

They were to quantify hydraulic properties of the reservoir, test the viability of injecting into the core resource area, and develop data to support hydrogeologic modelling for wellfield design and reserve estimation.

Lake Resources CEO David Dickson says the testing shows "highly favourable reservoir hydraulic properties and allows us to optimise the future wellfield".

Dickson said:

The tests represent a significant milestone for the Project, as they provide important data and higher confidence for our modelling, which is essential for the completion of our DFS for Phase 1.

The results are indicative of high-yield, production-scale, extraction wells in the core resource area.

The company said it believed this was the first successful salar injection test in Argentina's Catamarca region.

Michael Gabora, Director of Geology and Hydrogeology for Lake Resources, said the testing indicated that earlier exploration sampling results "were conservative".

Gabora said:

The positive results of this testing now allow for design of scaled up production and injection wells for the next stage of testing and production wellfield design.

Lake last updated its resource estimate for the Kachi lithium brine project on 15 June.

The company increased its estimate by 53%. It raised the Measured, Indicated and Inferred estimate from 5.29 million tonnes (Mt) to more than 8.1 Mt of lithium carbonate equivalent (LCE).

This compares to the maiden mineral resource estimate of 4.4 Mt announced in November.

News follows mystery gains for ASX lithium share

Today's news follows two days of mystery gains for this ASX lithium share.

Yesterday, the Lake Resources share price rose 7.69% to 21 cents despite no news from the company.

Last Thursday, the lithium share rocketed 35% despite no news again, before giving back some of those gains on Friday.

Lake Resources will host an investor webinar on 23 August.

The company remains among the top 10 most shorted stocks on the ASX with 7.1% of shares shorted.

However, two months ago the shorting was 9.09%, indicating some pro traders are closing their positions.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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