Lake Resources NL Annual Report 2013

FY2013 Annual Report · Lake Resources NL

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Lake Resources N.L.

ANNUAL REPORT 2013

Corporate Strategy

Company Directory

Lake Resources' mission has always been to develop a profitable
minerals discovery business, concentrating on the effective use of
the geosciences and leveraging these skills to make strategic
investments. To this end, our focus is on:

Exploration in the most prospective areas for world-class
deposits that will attract major mining companies as joint
venture partners at an appropriate stage.

Use of the most cost-effective practices and technologies
including multispectral satellite images, reprocessing and
reinterpretation of existing databases and application of
appropriate deposit models.

Formation of alliances with major mining companies for
exploration and development of the Company's discoveries.

Development of a revenue stream comprising net smelter
royalties and net profits interests when mining companies
develop deposits discovered by us.

Seed capital investments in other emerging resources sector
companies.

The board considers that the corporate culture required for successful
mineral exploration is significantly different from the culture of the
downstream businesses of mining and smelting.

Accordingly, Lake Resources does not place a high priority on
becoming a miner, preferring instead, to retain royalty and net profits
interests in its discoveries and to remain focussed on its core
business of mineral exploration.

Lake Resources N.L.
A.B.N. 49 079 471 980

Directors

Ross Johnston
Chairman

Peter J Gilchrist
Managing Director

James G Clavarino
Exploration Director

Registered Office

3-7 Maud Street
Newstead QLD 4006
GPO Box 1239
Brisbane 4001 Australia

Contacts

Telephone: +61 7 3257 1111
+61 7 3252 0255
Facsimile: +61 7 3257 2122
Email: lakeresources@lakeresources.com.au
Website: www.lakeresources.com.au

Auditors

Hayes Knight Audit (Qld) Pty Ltd
Level 19, 127 Creek Street
Brisbane 4000, Australia

Bankers

Australia and New Zealand Banking Group Limited
102 Brisbane Street
Ipswich 4305, Australia

Share Registry

Link Market Services Limited
Level 15, 324 Queen Street
Brisbane 4000, Australia

ASX Code
LKE

Lake Resources N.L.

Chairman’s Report

Dear Shareholder

During the year under review, the company's
activities focussed on data compilation and
evaluation for the Chagai project in Balochistan,
Pakistan, following a percussion drilling
program that was completed in the second
quarter of 2012. This project is situated in the
Tethyan magmatic arc, which extends from
Turkey, through Iran into Pakistan and hosts a
number of copper gold deposits including the
Saindak copper-gold mine and the giant Reko
Diq copper-gold deposit of Tethyan Copper
Company limited (TCC) (see below). Lake
Resources has been exploring the region since
1998.

At Koh-i-Sultan, exploration targets are world-
class copper and gold deposits associated with
an extensive system of intensely altered breccia
and volcanics on the margin of an extinct
volcanic caldera.
Lake Resources has
undertaken drilling programs in 2005, 2007-8
and 2012. Geologically significant gold and
trace elements have been intersected in a
number of holes - these results support the
accumulating evidence of potential for
economic porphyry copper-gold deposits.

The Dasht-i-Gauran area is situated to the
west of copper mineralisation reported by TCC
from drilling at its Sor Baroot Prospect at the
Reko Diq Project, and covers a number of
possible alteration zones identified from
interpretation of satellite images.

The Amalaf area adjoins the northern boundary
of the Saindak copper-gold mine.
Our
exploration target is large tonnage - low grade
copper amenable to low-cost open-pit mining
and trucking to the adjacent Saindak mine. A
percussion drilling program scheduled for the
second quarter of 2012 was postponed as a
result of a new Government of Pakistan policy
requiring security clearances for expatriate
personnel engaged in exploration activities in
the region. Application for these clearances is
in progress.

The Exploration Licences were due for renewal
in September 2015. The Company has lodged
appeals against the cancellations and is
awaiting notice of a date for hearing of the
appeals. Other avenues for restoration of the
Exploration Licences are being investigated by
the Company's Country Manager in Pakistan. In
view of the uncertainty of the legal processes in
Pakistan, the directors believe that it is prudent
to write down the value of the Company's
investment in Pakistan to zero in the accounts
dated 30 June 2013.

In their First Quarter Report 2013, Barrick Gold
stated that “In February 2013, the ICC tribunal
issued a ruling denying Tethyan Copper
Company's request for provisional measures.”
In their Second Quarter Report 2013, Barrick
noted that “Pakistan received an extension to
file its opposition brief in the ICSID matter until
September 2013.
The ICSID tribunal is
considering scheduling a merits hearing for
mid-2014. The ICC tribunal has scheduled
hearing dates for June 2014, and is considering
the scope of these hearings.”

On the world scene, volatility of world
economies and commodity demand and prices
The
continue to dominate the outlook.
Company is currently focussed on the status of
its exploration licences in Pakistan – any future
developments of the Company will depend on
the outcome of the Company's interest in these
licences. The Company will also need to raise
further working capital to continue with any
planned activities.

I wish to thank my fellow directors,
management and contractors for their
contribution to the operation of the company.
Thanks also to you, our shareholders, for your
ongoing support. We look forward to your
continuing association with Lake Resources.

Ross Johnston
Chairman

Approximately 70 km west of Lake's
Koh-i-Sultan project is the giant Reko Diq
copper-gold deposit (see Figure 1). Barrick
and Antofagasta each hold a 50% interest in
Te t h y a n C o p p e r C o m p a n y L i m i t e d
(TCC/Tethyan), whose principal asset is a 75%
interest in the Reko Diq project, with the
Government of Balochistan holding 25% .
According to Antofagasta “The mineral
resource at Reko Diq is estimated at 5.9 billion
tonnes with an average copper grade of 0.41%
and average gold grade of 0.22g/tonne at a
cut-off grade of 0.2% copper equivalent…”
( A n t o f a g a s t a w e b s i t e ,
antofagasta.co.uk/interior/operations/f_explor
a.html)

Following the submission of a feasibility study
to Government of Balochistan in August 2010,
for development of the project, Tethyan
submitted an application for a mining lease in
accordance with the Balochistan Mineral Rules
in February 2011.

In the financial report for the six months ended
30 June 2012, Antofagasta stated that “On 15
November 2011, Tethyan was notified by the
Government of Balochistan that the Government
had rejected the application. Tethyan is pursuing
two international arbitrations in order to protect
its legal rights: one against the Government of
Balochistan with the International Centre for
Settlement of Investment Disputes (“ICSID”)
asserting breaches of the Bilateral Investment
Treaty between Australia (where Tethyan is
incorporated) and Pakistan, and the other
against the Government of Balochistan with the
International Chamber of Commerce (:ICC”),
asserting breaches of the CHEJVA ( Chagai Hills
Joint Venture Agreement). Constitution of the
ICC and ICSID arbitration panels is in progress”.

ANNUAL REPORT 2013

Exploration Projects

Mineral exploration is an inherently risky undertaking. Typically, for every
one thousand mineral occurrences investigated, only one hundred
warrant drilling and of these, only one ultimately proves to be
economically mineable.

Factors that influence investment decisions for scarce
exploration funds include geological prospectivity,
availability of geological, geophysical and exploration data,
access to land, sovereign risk, government policies,
infrastructure and competitive advantages.

PAKISTAN

AUSTRALIA

ARGENTINA

From its inception in 1997, Lake concentrated its early efforts in Pakistan
and Sweden. In 2004, the Company wound down exploration in Sweden and
shifted its focus to a promising new exploration play in Argentina, whilst continuing
exploration in Pakistan. Following encouraging results from the company's first drilling program in
Pakistan in late 2005, work in Argentina was placed on hold to concentrate on the company's more
advanced copper and gold targets in Pakistan.

Pakistan

With a population of about 193 million (July
2013 estimate), the Islamic Republic of
Pakistan is bordered by Iran, Afghanistan,
China and India, and has a land area of 771 000
square kilometres, about one tenth of the area
of Australia.

The Republic is made up of four provinces -
Sindh (capital, Karachi), Punjab (Lahore),
Khyber Pakhtunkhwa (formerly North-West
Frontier (Peshawar)) and Baluchistan (Quetta)
and seven areas ('agencies') on the border with
Afghanistan known as the federally-
administered tribal areas (FATA). Pakistan also
administers part of the former princely state of
Jammu and Kashmir – Gilgit-Baltistan also
known as Northern Areas. Islamabad is a
special 'Federal Capital Territory'.

Pakistan has a federal system of government
with a bicameral legislature comprising the
National Assembly, and an upper house, the
Senate. All four provinces have their own
elected provincial assemblies and each
provincial government is headed by a chief
minister who presides over the provincial
cabinet. Provincial governors are appointed by
the president. Local or district governments are
headed by elected nazims.

Following a major earthquake in Pakistan in
October 2005, Australia contributed more than
$80 million in emergency assistance. In 2010
Australia's program grew in response to the
devastating floods which swept through
Pakistan in July of that year, providing $75
million in humanitarian and early recovery
assistance.
Australia's total official
development assistance to Pakistan for 2012-
2013 is estimated at A$86 million.
In
2012—13 Australia is supporting the World
Food Programme to provide emergency food
rations for up to 975 000 people displaced by
conflict in the Federally Administered Tribal
Areas.

Commercial links between Australia and
Pakistan include BHP Billiton's investment in
Pakistan's Zamzama gas field valued at US$100
million. Total two-way trade in 2012 was
A$879 million, principally food products, coal
and cotton exports from Australia to Pakistan
and textiles and rice from Pakistan to Australia.
There is a growing Pakistani community in
Australia of approximately 33 000 people of
Pakistani ancestry and, in 2012, there were
close to 11 000 Pakistani students studying in
Australia.

Pakistan held National Assembly and provincial
parliamentary elections in May 2013.
Pakistan's Government is led by Prime Minister
Mian Muhammad Nawaz Sharif (since 6 June
2013). The next National Assembly election is
due in 2018. An election for 54 of the 100
seats in the Senate was held in March 2012
with the next election scheduled for 2015. On
th8 September 2013, Mr Mamnoon Hussein
was inaugurated as President for a 5-year term,
replacing Mr Asif Ali Zardari.

Australia established diplomatic relations with
Pakistan after partition and has had a resident
mission in the country since 1948. Bilateral
relations between Australia and Pakistan
include agreements on promotion and
protection of investments, defence, agriculture
and development assistance.

Lake Resources N.L.

A F G H A N I S T A N

Amalaf

AFGHANISTAN

IRAN

Chagai
Project

Quetta

N A T S I K A P

I N D I A

Dasht-i-Gauran

Karachi

TCC Reko Diq
Project

Koh-i-Sultan

Zahidan

Saindak
Copper-Gold
Mine

I R A N

Taftan

Rail

Lake resources Licence

In the early 1990s, BHP (subsequently BHP
Billiton (BHPB)) commenced exploration of the
Chagai region, discovering a cluster of
porphyry copper-gold deposits at Reko Diq.
Tethyan Copper Company Ltd (TCC) continued
exploration under an agreement with BHPB until
early 2006 when TCC was taken over by
Antofagasta PLC. Following the takeover, the
TCC mineral interests have been managed and
operated by a 50:50 joint venture between
Antofagasta and Barrick Gold Corporation.
Government of Balochistan has a 25% interest
in the project.

The current mineral resource at Reko Diq is
estimated at 5.9 billion tonnes with an average
copper grade of 0.41% and average gold grade
of 0.22 g/tonne at a cut-off grade of 0,2%
copper equivalent (Antofagasta PLC, Annual
Report 2009). Feasibility, environmental and
social impact studies were finalised and
submitted to Government of Balochistan in
August 2010 and applications for mining leases
were submitted in February 2011. On 15
November 2011, Tethyan was notified by the
Government of Balochistan that the
Government had rejected the application.
Tethyan is pursuing international arbitrations in
order to protect its legal rights.

s e a l e d

Hwy

Nok Kundi

P A K I S T A N

CHAGAI PROJECT
Lake Resources is exploring for epithermal gold
and porphyry copper-gold deposits in the
Chagai region in western Balochistan.

Regional Setting

The project area is situated in the Tethyan
Magmatic Arc which extends from Turkey
through Iran into Pakistan. Important mineral
deposits in the Arc include the Saindak copper-
gold mine, adjacent to Lake's Amalaf EL, and
the Reko Diq porphyry copper-gold project of
Antofagasta PLC and Barrick Gold Corporation.

Access is by sealed highway from the provincial
capital of Quetta to the border with Iran. A wide-
gauge railway parallels the highway.

The first systematic geological mapping of the
region, at a scale of 1 inch to 4 miles (1:253
440), was undertaken in 1952-56 under a
Canada-Pakistan Colombo Plan project. In
1956-70, mapping and appraisal of geological
resources in Pakistan was undertaken under a
cooperative program between geological
Survey of Pakistan (GSP) and the U.S.
Geological Survey which resulted
the
discovery of the copper-mineralised quartz-
diorite stocks at Saindak.

Further exploration at Saindak during the
1970's resulted in the discovery of porphyry
copper, gold and molybdenum in three
deposits totalling 440 million tonnes @ 0.41%
copper and 0.5g/t gold,

During 1991-93, under a turnkey contract,
Metallurgical Construction Corporation of
China (MCC) constructed a metallurgical plant
and open pit mine based on the South Orebody
(78 Mt averaging 0.43% Cu and 0.5 g/t Au).
The project was handed over to Saindak Metals
Limited in January 1996 after a successful trial
operation which produced 1 550 tonnes of
blister copper. Due to a shortage of working
capital, the mine was placed on a 'care and
maintenance' basis until 2003 when it was re-
commissioned under the management of MCC,
who continue to operate mining and smelting
operations at Saindak.

ANNUAL REPORT 2013

Tenements

Lake Resources commenced regional
exploration in the Chagai region following the
granting of a 10 000 sq km Reconnaissance
Licence (RL) in early 1998.

In March 2000, the RL was relinquished and four
Exploration Licences (ELs), covering 920 sq
km, were granted to Lake. These ELs expired in
March 2009 and were replaced with three new
ELs that were granted for a period of three years
commencing on 10 September 2009. In
2012, the ELs were renewed, over reduced areas
(approx. 50%) for a further period of three years
to September 2015. Details are set out below.

Balochistan Tenements

Tenement

EL Number

Area
(sq km)

Lake
Interest

Date of
Grant

Date of
Expiry

Previous Work

Amalaf

(71)/5468-78

46.9

(see Note 1)

10/09/2009

9/09/2015

Dasht-i-Gauran

(72)/5492-5503

29.12

(see Note 1)

10/09/2009

9/09/2015

Koh-i-Sultan

(73)/5479-91

85.1

(see Note 1)

10/09/2009

9/09/2015

Note 1. Clause 12 of the Licence documents provides that the grantee “…will also sign an agreement with the
Government of Balochistan within a period of two months regarding participation/entry of the Government of
Balochistan in the said licence/project with 12.5% share on 100% discount i.e. without any investment or 25%
share with investment in accordance with the Latest Policy of the Government”. Government of Balochistan
advised in a letter dated 15 May 2010 that preparation of a draft agreement is in progress.

At Koh-i-Sultan, Lake is exploring for gold and
copper associated with an extensive system of
intensely altered breccia and volcanics
covering an area of more than five square
kilometres on the margin of an extinct volcanic
caldera.

Subsequent to 30 June 2013, the Directorate
General of Mines and Minerals, Government of
Balochistan, advised that it has cancelled the
Company's three Exploration Licences in
Balochistan due to lack of exploration activity.
The Company has lodged appeals against the
cancellations and is awaiting notice of a date for
hearing of the appeals. Other avenues for
restoration of the Exploration Licences are
being investigated by the Company's Country
Manager in Pakistan.

The Amalaf area adjoins the northern boundary
The
of the Saindak copper-gold mine.
exploration target is large tonnage - low grade
copper amenable to low-cost open-pit mining
and trucking to the adjacent Saindak mine
operated by Chinese company Metallurgical
Construction Corporation (MCC).

Initial exploration of the RL by Lake comprised
geological interpretation of multispectral
Landsat TM images, reprocessing and
interpretation of airborne magnetic survey data,
follow-up geological reconnaissance and
geochemical surveys. This work identified
numerous areas for more detailed exploration.

Work on the EL areas commenced with detailed
geological interpretation of merged Landsat
ETM and SPOT satellite images at 1;25,000
scale that produced detailed geological maps
and identified alteration zones that could be
associated with copper-gold mineralisation.
Subsequent ground investigation of these
targets included geological reconnaissance,
geochemical sampling (stream sediment, soil
and rock) and ground magnetic surveys.

In 2004, revised geological interpretations
based on stereoscopic ASTER satellite images
and computer-processed spectral data at
1:25,000 scale were completed. The ASTER
spectral data provided enhanced discrimination
between different alteration types that could be
related to mineralisation.

In 2005, Lake undertook a 6-hole reverse
circulation percussion drilling program — two
holes on each of the Company's three
Exploration Licence areas—with encouraging
results.

At Amalaf one of two holes drilled by Lake intersected low-grade copper-molybdenum over the
length of the hole (drillhole LRJJ-02, 12 -120 m, 108 m @ 0.17%Cu & 94 ppm Mo).

At Koh-i-Sultan, drillhole LRM-01, the first hole ever drilled to test this system, intersected copper
and gold mineralisation on the western margin of the system:

! 3
1
3 -
1
9 m @ 0.29 g/t Au & 1.63% Cu;
12 m,
1
! 12
12 -
1
6 m @ 1.14 g/t Au & 0.25% Cu;
1
18 m,
! 18
18 -
69 m @ 0.55 g/t Au & 0.03% Cu (includes 36-60 m, 24m @ 1.05 g/t Au);
87 m,
! 129
129 -
11 m @ 0.60 g/t Au & 0.02% Cu.
140 m,

The hole terminated at a depth of 140 m in continuing gold mineralisation.

In 2006, rock geochemical grid sampling (309 samples) at Koh-i-Sultan identified anomalous gold,
tellurium, bismuth and arsenic in a cohesive pattern over an area of about five sq km covering the
main Miri alteration system and associated zones to the west and south of the Nawah Caldera.

In early 2007, high resolution (2.5 m) stereoscopic satellite imagery from the Advanced Land
Observation Satellite (ALOS) was utilised to produce a new photogeological interpretation and a
digital elevation model (DEM) and 10 m topographic contour map.

In the latter part of 2007, preparations were made for a 3 000 m diamond drilling (coring) program to
test a zone of breccia and alteration centred on an interpreted north-south-trending fault zone, near
the western rim of Nawah Caldera at Koh-i-Sultan. A logistics base was established at the village of
Nok Kundi, approximately 35 km south of the drill sites, on the main highway linking the Chagai
region with the provincial capital of Quetta and 2.8 km of access track to proposed drill sites were
constructed.

During 2008, five holes were completed for a total of 2 284 m. Details of the drillholes are set out in
the table below.

Hole No.

North
(m)

East
(m)

R.L.
(m)

Azimuth
(degrees)

Angle
(degrees)

Total Depth
(m)

LRMDDH - 001
LRMDDH - 002
LRMDDH - 003
LRMDDH - 004
LRMDDH - 005

3 222 046
3 222 046
3 222 471
3 222 469
3 222 422

480 621
480 616
480 706
480 704
480 449

2 049
2 049
2 073
2 073
2 063

090.7°
272.7°
086.7°
263.7°
268.7°

-62°
-62°
-60°
-61°
-61.5°

507.2
538.4
550.6
392.2
296.4

Notes:

Location measured by GPS estimated accuracy ± 5 m horizontal, ± 20m vertical.
Co-ordinates are UTM, WGS84.
Azimuth is related to True North (magnetic variation 1.265° East)

The diamond drilling program resulted in two significant discoveries:

! porphyry-type copper-gold mineralisation in drillhole LRMDDH-002 (392 – 520 m, 128 m

@ 0.14% Cu and 0.19 g/t Au) and
a very large, variably-altered and mineralised breccia complex, intersected in all five
drillholes, over a width of more than 700 m and a north-south extent of more than 400 m.
Geologically significant gold values were intersected in the breccia in four of the five
drillholes.

Lake Resources N.L.

ANNUAL REPORT 2013

250m (approx.)

LRMDDH005
LRMDDH005

LRMDDH003 LRMDDH004
LRMDDH003 LRMDDH004

LRMDDH-004
LRMDDH-003

LRMDDH-005

Nawah

MIRI
MIRI
WEST
WEST

LRMDDH-001
LRMDDH-002

Caldera

MIRI
MIRI
EAST
EAST

Alteration
Alteration
Zone
Zone

LRM01
LRM01
GOLD ZONE
GOLD ZONE

BATIL
BATIL

LRMDDH001 LRMDDH002
LRMDDH001 LRMDDH002

New Access Track
New Access Track

Drillhole site locations.

Individual drillhole results are summarized
Individual drillhole results are summarized
below:
below:

2005 Percussion Drillhole LRM-01
3-12m, 0.29 g/t Au, 1.63% Cu
12-18m, 1.14 g/t Au, 0.25% Cu
18-87m, 0.55 g/t Au, 0.03% Cu
129-140m, 0.60 g/t Au, 0.02% Cu

! LRMDDH-001 intersected zones of vent
! LRMDDH-001 intersected zones of vent
breccias, altered breccias and barren
breccias, altered breccias and barren
feldspar porphyry. Gold mineralization is
feldspar porphyry. Gold mineralization is
present in altered breccia from 334 to
present in altered breccia from 334 to
340 m (6 m x 0.30 g/t Au), 364 to 376 m
340 m (6 m x 0.30 g/t Au), 364 to 376 m
(12 m x 0.55g/t Au) and 506 to 507.3 m
(12 m x 0.55g/t Au) and 506 to 507.3 m
(end of hole) (1.3 m x 0.77 g/t Au).
(end of hole) (1.3 m x 0.77 g/t Au).

2005 Percussion Drillhole LRM-02
3-75m, barren alt. porphyry.
75-131m, barren doleritic intrusive.

2km

During the first half of 2012, a reverse
circulation (RC) drilling program totalling
2,070 m was completed at the Koh-i-Sultan
project. The drilling, which was originally
scheduled for 2011, was delayed due to the
unavailability of suitable drilling equipment in
Pakistan. A crawler-mounted multi-purpose
(diamond coring and percussion) drill and a

crawler-mounted air compressor (900 cfm @
350 psi), were shipped from Australia by
Interdrill Pty Ltd and drilling commenced in late
March 2012.

Seventeen holes were drilled within an area
approximately 1,000 m east-west by 1,500 m
north-south, along Miri Nala, southwest of
Nawah Caldera.

! LRMDDH-002 intersected altered breccias
! LRMDDH-002 intersected altered breccias
and intrusive porphyry. Porphyry-type
and intrusive porphyry. Porphyry-type
copper-gold mineralization is present in
copper-gold mineralization is present in
potassic-altered porphyry from 392 to 520
potassic-altered porphyry from 392 to 520
m (128 m x 0.14%Cu and 0.19g/t Au).
m (128 m x 0.14%Cu and 0.19g/t Au).
Anomalous molybdenum is present in the
Anomalous molybdenum is present in the
upper part of the porphyry mineralization
upper part of the porphyry mineralization
and also in the overlying breccias.
and also in the overlying breccias.

! LRMDDH-003 intersected mainly altered
! LRMDDH-003 intersected mainly altered
breccias with lesser vent breccia and minor
breccias with lesser vent breccia and minor
porphyry. Gold is present in altered breccia
porphyry. Gold is present in altered breccia
from 136 to 158 m (22 m x 0.41g/t Au).
from 136 to 158 m (22 m x 0.41g/t Au).
! LRMDDH-004 intersected altered mainly
! LRMDDH-004 intersected altered mainly
altered breccias. Gold is present in altered
altered breccias. Gold is present in altered
breccia from 242 to 258 m (16 m x 0.50g/t
breccia from 242 to 258 m (16 m x 0.50g/t
Au) and 320 to 324 m (4 m x 0.16 g/t Au).
Au) and 320 to 324 m (4 m x 0.16 g/t Au).
! LRMDDH-005 intersected altered breccias
! LRMDDH-005 intersected altered breccias
from top to bottom. Supergene copper is
from top to bottom. Supergene copper is
present from 80 to 108 m (28 m x 0.26%
present from 80 to 108 m (28 m x 0.26%
Cu), including 8 m x 0.56% Cu from 80 to
Cu), including 8 m x 0.56% Cu from 80 to
88 m. Minor gold is present in the
88 m. Minor gold is present in the
supergene copper zone from 86 to 92 m
supergene copper zone from 86 to 92 m
(6 m x 0.19 g/t Au) and further down-hole at
(6 m x 0.19 g/t Au) and further down-hole at
204 to 216 m (12 m x 0.32g/t Au) and 256
204 to 216 m (12 m x 0.32g/t Au) and 256
to 268 m (12 m x 0.15 g/t Au).
to 268 m (12 m x 0.15 g/t Au).

(Cutoff grades used for the above intersections
(Cutoff grades used for the above intersections
are 0.10 g/t Au and 0.1% Cu).
are 0.10 g/t Au and 0.1% Cu).

Lake Resources N.L.

479500 E

480000 E

480500 E

481000 E

3222500 N

3222000 N

LRMDDH-005

LRMDDH-004

LRMDDH-003

LRMRC-017

LRMRC-016

LRMRC-015

LRMRC-013

LRMRC-014

LRMDDH-002

LRMDDH-001

LRMRC-011

LRMRC-012

3221500 N

LRMRC-009

LRMRC-018

LRMRC-010

LRMRC-008

LRM-01

LRMRC-019

LRMRC-007

3221000 N

LRMRC-005

LRMRC-006

LRMRC-004

LRMRC-003

LRM-02

LEGEND

Drill hole collar
and surface projection

LRM-01- 02
LRMDDH-001- 05
LRMRC-003 - 019

2005
2008
2012

500m

Map Grid UTM/WGS84/Zone 41N

Koh-i-Sultan
DRILL HOLES and ACCESS TRACKS

A number of the drillholes were terminated before reaching planned depth when they encountered potentially lethal concentrations of pressurized H2S
gas. Drillhole location and orientation details are set out in the table below.

Hole No.

LRMRC-003
LRMRC-004
LRMRC-005
LRMRC-006
LRMRC-007
LRMRC-008
LRMRC-009
LRMRC-010
LRMRC-011
LRMRC-012
LRMRC-013
LRMRC-014
LRMRC-015
LRMRC-016
LRMRC-017
LRMRC-018
LRMRC-019

North
(m)

3 220 787
3 220 968
3 220 970
3 221 003
3 221 009
3 221 447
3 221 441
3 221 624
3 221 779
3 221 769
3 222 006
3 222 006
3 222 171
3 222 171
3 222 260
3 222 172
3 222 175

East
(m)

479 689
479 623
479 615
479 765
479 762
479 645
479 649
479 800
479 971
479 970
480 116
480 124
480 316
480 312
480 558
479 588
479 597

R.L.
(m)

1,748
1,751
1,760
1,786
1,786
1,782
1,797
1,819
1,852
1,852
1,896
1,896
1.940
1.940
2,005
1,755
1,755

Azimuth
(degrees)

Angle
(degrees)

Total Depth
(m)

Reason for termination

090°
090°
271°
092°
273°
091°
272°
088°
270°
090°
269°
090°
089°
270°
271°
275°
095°

-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°
-60°

112
73
148
80
157
139
133
139
160
139
98
100
211
151
64
79
78

Intersected H S gas
2
Lost air
Risk of H S gas
Unpromising rocks

Risk of H S gas
Intersected H S gas

Intersected H S gas
Risk of H S gas
Intersected H S gas

Intersected water
Risk of H S gas
Risk of H S gas

Notes:
Co-ordinates are UTM, WGS84, Zone 41N, Azimuth is magnetic (magnetic variation 1.8° East), R.L is height above mean sea level

Location measured by GPS – estimated accuracy ± 5 m horizontal, ± 20m vertical.

ANNUAL REPORT 2013

Drillhole chip samples were collected
continuously via a cyclone splitter for 2 m
intervals and subjected to geochemical
analysis by ALS Laboratories in Brisbane for
49 elements including silver base metals and
a range or rare earths and trace elements by
ICPAES and ICMP analysis, and gold by fire
assay with AAS finish.

Work Completed in 2012-2013

During the year under review, work focussed
on compilation and evaluation of data from
the 2012 percussion drilling program.

At the southern end of the area, in the vicinity
of the gold intersection in 2005 drillhole
LRM-01, seven holes intersected variably
altered volcanics and breccia. Five of these
holes (LRMRC 005, 006, 007 &009) were
essentially barren, except for patchy elevated
levels of manganese.

However, significant gold was intersected in
four drillholes, with associated copper in two
of these holes, similar to drillhole LRM-01
drilled in 2005.

! LRMRC-003: from 64 to 68 m (4 m @
0.17 g/t Au) and 74 to 90 m (16 m @
0.14 g/t Au).

! LRMRC-005: from 90 to 92 m (2 m @
0.11 g/t Au), 96 to 100 m (4 m @ 0.29
g/t Au), 106 to 112 m (6 m @ 0.13 g/t
Au) and 124 to 134 m (10 m @ 0.43 g/t
Au).

! LRMRC-018: from 2 to 16 m (14 m @
2.20 g/t Au & 0.32% Cu, including 2 to
12 m (10 m @ 2.96 g/t Au & 0.44% Cu)
and 68 to 72 m (4 m @ 0.19 g/t Au).
! LRMRC-019: from 2 to 78 m, anomalous
gold over the complete hole (average
1.47 g/t Au) with copper in the top 18 m,
including 2 to 22 m (20 m @ 2.23 g/t Au
& 0.18% Cu), 22 to 58 m (36 m @ 0.27
g/t Au), 58 to 70 m (12 m @ 4.53 g/t Au)
and 70 to 78 m (8 m @ 0.39 g/t Au).

These results are interpreted to support
potential for a large porphyry copper-gold
target associated with the porphyry copper-
gold intersection in 2008 drillhole LRMDDH-
002 (392 to 520 m : 128 m @ 0.14% Cu and
0.19 g/t Au).

A substantial program of deep diamond
drilling (500 – 600m) would be required to
test these targets below the levels achievable
with RC drilling.

A planned RC drilling program at the Amalaf
Exploration Licence area that was scheduled
for the second quarter 2012, was postponed
as a result of a new Government of Pakistan
policy requiring security clearances for
expatriate personnel engaged in exploration
activities in this region. Application for these
clearances is in progress.

The future of further exploration will be
dependent on the outcome of appeals by the
company against cancellation of its
exploration licences in Balochistan.

These results are interpreted to support
potential for a significant gold target, with
possible supergene copper in the LRM001 –
LRMRC003/005/018/019 area. The copper-
gold association could indicate potential for
porphyry copper-gold mineralization
beneath this area.

To the north, drillholes LRMRC 010 – 017
intersected zones of geochemically
anomalous molybdenum (>5 ppm up to 130
ppm) and copper (>300 ppm up to 1675
ppm). Minor gold was intersected in some of
these drillholes:

! LRMRC-010: from 28 to 42 m (14 m @
0.16 g/t Au), 56 to 70 m (14 m @ 0.34
g/t Au) and 134 to 139 m (5 m @ 0.13
g/t Au).

! LRMRC-013: from 46 to 48 m (2 m @

0.31 g/t Au).

! LRMRC-014: from 78 to 84 m (6 m @

0.20 g/t Au).

! LRMRC-015: from 74 to 76 m (2 m @

0.38 g/t Au).

! LRMRC-016: from 86 to 92 m (6 m @
0.13 g/t Au), 110 to 120 m (10 m @
0.13 g/t Au) and 150 to 151 m (1 m @
0.21 g/t Au).

! LRMRC-017: from 06 to 08 m (2 m @
0.11 g/t Au), 12 to 14 m (2 m @ 0.11 g/t
Au) and 16 to 20 m (4 m @ 0.11 g/t Au).

(Cutoff grade used for the above intersections is
0.10 g/t Au)

The information in this report that relates to Exploration Results, is based on information compiled by Jim Clavarino who is a Member of The Australasian Institute of
Mining and Metallurgy. Mr. Clavarino is Exploration Director of Lake Resources NL and is employed by Argent Resources Pty Ltd. Mr. Clavarino has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr.
Clavarino consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Glossary of Terms

Lake Resources N.L.

PAKISTAN

ARGENTINA

AUSTRALIA

In this Report, the following words have these meanings unless the context otherwise requires:

"Alteration" means chemical changes to rocks and minerals, commonly related to ore-forming processes.
"Andean-type arc" means a chain of volcanic centres and intrusives associated with continental plate margins.
"Anomaly/anomalous" means abnormal; in geological data may indicate a target for investigation.
"Argillic alteration" means a type of alteration of rocks and minerals to clay minerals.
“Base metals" means any of the more common metals such as copper, lead and zinc.
"Batholith" means a large body of intrusive igneous rock.
"Breccia" means a rock made up of angular coarse fragments.
"Caldera" means a more or less circular volcanic depression whose diameter is many times greater than that of a volcanic vent.
"Chalcopyrite" means one of the sulphide minerals of copper.
"Diamond drilling" means a method of drilling using diamond tipped drill bits to recover solid core samples from the ground.
"Disseminated" means mineral particles scattered more or less evenly within rock or zone of rocks.
"Epithermal" means ore deposited at shallow depths from ascending hot solutions.
"Float" means rocks no longer in their original place.
"Geochemical sampling" means the collection and chemical analysis of geological samples for metals and trace elements.
"Geophysical surveys" means surveys using instruments to detect and measure naturally occurring and induced magnetic, electrical and electromagnetic properties of
the earth.
"GIS" (Geographic/Geologic Information System) means a system for defining, storing, manipulating and presenting spatially related information such as geological,
geophysical, geochemical and topographic data.
"Gossan" means the outcropping ferruginous deposits derived from the oxidation of underlying sulphide minerals.
"Gravity (survey/data)" means measurements of the earth's field of gravity, which varies depending on the underlying rocks.
"g/t" means grams per tonne, a measurement commonly used for precious metal ores.
"Island arc" means a chain of volcanic islands associated with oceanic tectonic plate margins.
"km" means kilometres.
"Magnetic (survey/data)" means measurement of the earth's natural magnetic field, which varies depending on the underlying rocks.
"Magnetite" means one of the oxide minerals of iron.
"Massive sulphide" means mineral deposits containing a high proportion of sulphide minerals.
"Net smelter return" means the payment made by a smelter to a mine for the contained metal in concentrate after deduction of all smelting and refining costs, penalties,
deductions and freight.
“Porphyry deposits" refer to a type of mineral deposit (usually copper, molybdenum and gold) associated with intrusive igneous rocks where the valuable minerals are
present in disseminated form.
"ppb" means parts per billion, a measurement of concentration.
"ppm" means parts per million, a measurement of concentration.
"Precious metals" means gold, silver or any of the platinum group of metals.
"Quaternary age" means a geologic period of time from 1.8 million years ago to present.
"Satellite images" means digital images of the earth's surface compiled from spectral data collected by sensors carried in special-purpose satellites, readily available for
all parts of the world from various commercial and government sources.
"Sheeted dykes" means groups of thin (relative to length) tabular igneous intrusives.
"Sovereign risk" means the potential risk that could arise due to a change in government or government policy.
"Sq km" means a measurement of area in square kilometres.
"Stockwork" means a network of veins.
"Stratigraphic" refers to identifiable geological strata.
"Stratovolcano" means a stratified volcanic cone of large proportions.
"Stream sediment sample" means a sample of the silt and sand collected from a stream bed for geochemical analysis.
"Supergene deposit" means a mineral deposit formed by descending surficial solutions.
"Tectonic plate" means a distinct cohesive block of the earth's crust.
"Tenements" means mineral exploration and mining titles granted by government agencies.

Lake Resources N.L.

3-7 Maud Street
Newstead QLD 4006
GPO Box 1239
Brisbane 4001 Australia

Telephone: +61 7 3252 0255
Facsimile: +61 7 3257 2122
Email: lakeresources@lakeresources.com.au