Lake Resources NL Annual Report 2014

FY2014 Annual Report · Lake Resources NL

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Lake Resources N.L.

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ANNUAL REPORT 2014

Corporate Strategy

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.

Company Directory
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.

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

Chairman’s Report

Dear Shareholder

During the year under review, the company’s
activities focussed on finding a joint venture
partner for the Chagai project in Balochistan,
Pakistan. 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. 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 copper,
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.
The
exploration target is large tonnage - low grade
copper amenable to low-cost open-pit mining
and trucking to the adjacent Saindak mine.

During the September 2013 quarter, the
Directorate General of Mines and Minerals,
Government of Balochistan, advised that it had
cancelled the Company’s three exploration
licences in Balochistan due to lack of
exploration activity. Appeals were lodged
against the cancellations and following a
hearing in January 2014, the Company was
advised that the cancellations had been set
aside and
licences were
restored.

the exploration

At the time of the cancellations, the directors
believed that it was prudent to write down the
value of the Company’s investment in Pakistan
to zero in the accounts dated 30th June 2013.

In May 2014, the company disclosed that it has
entered an Exclusivity Agreement with Colt
Resources Middle East (CRME) to negotiate a
transaction whereby CRME can earn a majority
interest in Lake’s three Chagai exploration
licenses in Balochistan – these negotiations are
in progress at the time of this report. Details are
set out under Exploration.

Approximately 70 km west of Lake’s Koh-i-
Sultan project (see Figure 1). Barrick and
Antofagasta each hold a 50% interest in Tethyan
Copper Company Limited (Tethyan), whose
principal asset is a 75% interest in the Reko Diq
project, with the Government of Balochistan
holding 25%. 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 (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. In November 2011, the
Government of Balochistan rejected the
applications. Tethyan is pursuing international
arbitrations in order to protect its legal rights. In
the Antofagasta Annual Report and Financial
Statements 2013 (p.159), the company stated
that “Tethyan is seeking monetary damages only
and is no longer seeking the grant of a mining
lease at Reko Diq.”

On the world scene, volatility of world
economies and commodity demand and prices
continue to dominate the outlook. While our
efforts during the year to date have focussed on
securing a partner to advance exploration of its
licences in Pakistan, we continue to investigate
other investment and exploration opportunities.
The Company will need to raise further working
capital to continue with any planned activities.

ANNUAL REPORT 2014

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.

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. In late 2005, work in Argentina was terminated to
concentrate on the company’s more advanced copper and gold targets in Pakistan.

PAKISTAN

AUSTRALIA

ARGENTINA

Pakistan

With a population of about 196 million (July
2014 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.

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.

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 supported 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 6th 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
8th September 2013, Mr Mamnoon Hussein
was inaugurated as President for a 5-year term,
replacing Mr Asif Ali Zardari.

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.

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…”
(Antofagasta website, antofagasta.co.uk/
interior/operations/f_explora.html)

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. In November 2011, the
Government of Balochistan rejected the
applications. Tethyan is pursuing international
arbitrations in order to protect its legal rights. In
the Antofagasta Annual Report and Financial
Statements 2013 (p.159), the company stated
that “Tethyan is seeking monetary damages
only and is no longer seeking the grant of a
mining lease at Reko Diq.”

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 Reko Diq
porphyry copper-gold deposit and the Saindak
copper-gold mine.

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 2014

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.

the exploration

Initial exploration of the RL in 1998-1999 by
Lake Resources 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 in 2000 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
Subsequent ground
mineralisation.
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.

Lake Resources N.L.

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 2008, Lake undertook a 5-hole, 2,284 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 (drillholes LRMDDH 001 – 005).

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 ppm 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.

During the first half of 2012, a reverse
circulation (RC) drilling program totalling
2,070 m was completed at the Koh-i-Sultan
project (drillholes LRMRC 003 – 019).
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.

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

ANNUAL REPORT 2014

A number of the drillholes were terminated before reaching planned depth when they encountered
potentially lethal concentrations of pressurized H2S gas.

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. 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: 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: 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: 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: 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).

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) with minor gold
in some of these drillholes:

! LRMRC-010: 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: 46 to 48 m (2 m @ 0.31 g/t Au).
! LRMRC-014: 78 to 84 m (6 m @ 0.20 g/t Au).
! LRMRC-015: 74 to 76 m (2 m @ 0.38 g/t Au).
! LRMRC-016: 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: 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).

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) will 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.

Work Completed in 2013-2014

During the year under review, no field activities were undertaken. The company's activities focussed
on finding a joint venture partner for the Chagai project. In May 2014, the company disclosed that it
has entered an Exclusivity Agreement with Colt Resources Middle East (CRME) to negotiate a
transaction whereby CRME can earn a majority interest in Lake's three Chagai exploration licenses in
Balochistan.

The Transaction is to be governed by the terms of a Share Subscription Agreement and a
Shareholders Agreement.

There are 3 parties, Lake Resources NL (Lake), Colt Resources Middle East (CRME) and Aamir
Resources Consultants (Aamir).

The corporate entity for the Transaction will be a Pakistan incorporated company (OpCo) into
which Lake's exploration licenses will be transferred.

CRME will subscribe a minimum of USD1.9 million for 60% of OpCo with the funds to be
invested in exploration of the licenses within 3 years. The balance of OpCo shareholding will be
divided between Lake 27.5% and Aamir 12.5%.

CRME will subsequently subscribe a minimum aggregate of USD5 million in OpCo within 6
years, which will also be invested in exploration of the licenses at which point the shareholders
will be CRME 60%, Lake 15%, Government of Balochistan 12.5% and Aamir 12.5%.

For any subscriptions and expenditure
above USD5 million , Lake and Aamir will
be diluted until Lake reaches 10% which
will then revert to a 10% carried interest
with Lake's share of the investment
repayable from 80% of Lake's share of net
profits. Aamir, on diluting to 10% will revert
to a 5% free carried net profits interest.

In the event CRME invests the minimum of
USD 1.9 million within 3 years and then
decides not to invest an aggregate of $5
million within 6 years, then the
shareholding of OpCo will revert to CRME
51%, Lake 40% and Aamir 9%.

The agreement was in the process of being
finalised at the time of this report.

Lake Resources N.L.

ANNUAL REPORT 2014

Future Progam

Future activities of the company in Pakistan will depend on the outcome of the joint venture negotiations with CRME.

In the mean time, as pointed out in the Chairman's Report, we continue to investigate other investment and exploration opportunities.

Future exploration work will be redirected to take advantage of the opportunities presented by a lull in exploration activity in Australia where sovereign risk
is lower and modern geoscientific data is more available than many other countries.

The Company will need to raise further working capital to continue with any planned activities.

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