Lake Resources N.L.
ANNUAL REPORT 2016
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
Auditors
Nexia Brisbane Audit Pty Ltd
Level 28, 10 Eagle 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
Telephone: +61 7 3257 1111
+61 7 3252 0255
Facsimile: +61 7 3257 2122
Email: lakeresources@lakeresources.com.au
ASX Code
LKE
www.lakerources.com.au
Lake Resources N.L.
Chairman’s Report
Dear Shareholder,
During the previous year, the company entered a joint venture for its Chagai Project in Balochistan,
Pakistan. The project is situated in the Tethyan magmatic arc, which extends from Turkey, through
Iran into Pakistan and hosts a number of world-class copper gold deposits including the Saindak
copper-gold mine and the giant Reko Diq copper-gold deposits.
Under the terms of the joint venture, Colt Resources Middle East (CRME) can earn a majority interest
in the project through exploration expenditure of US$1.9 million within 3 years and a further US$3.1
million within a further period of 3 years.
During the year under review, no significant exploration activities were undertaken on the project
pending approval of government security clearances for key project personnel – the security
clearances were granted in June 2016.
Meanwhile, the company continued to investigate other investment and exploration opportunities.
On 25th May 2016 the company advised in an announcement to ASX Limited, that it had signed a
conditional purchase agreement for all the shares in Lith NRG Pty Ltd, a private explorer with lithium-
focused exploration applications in Argentina, together with a capital raising to fund exploration.
The agreement is conditional on completion of due diligence and approval by shareholders at the
company’s annual general meeting.
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
1
ANNUAL REPORT 2016
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 incorporation 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
ARGENTINA
AUSTRALIA
Pakistan
CHAGAI PROJECT
Lake Resources is exploring for epithermal
gold and porphyry copper-gold deposits in the
Chagai region in western Balochistan through a
joint venture with Colt Resources Middle East.
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
the
is by sealed highway
provincial capital of Quetta to the border with
Iran. A wide-gauge railway parallels
the
highway.
from
Lake Resources began 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 and
subsequently renewed, over reduced areas
(approx. 50%) for a further period of three years
to September 2015.
2
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
Taftan
Rail
a
n
d
Chagai Project
Exploration Licences
s e a l e d
Hwy
Nok Kundi
P A K I S T A N
Zahidan
Saindak
Copper-Gold
Mine
I R A N
During 2014-15, the company entered into an Exclusivity Agreement and associated Shareholders
Agreement and Share Subscription Agreement with Colt Resources Middle East (CRME) and Aamir
Resources Consultants whereby CRME can earn a majority interest in the Chagai Project through
exploration expenditure of US$1.9 million within 3 years and a further US$3.1 million within a
further period of 3 years. Lake’s initial interest in the project is 27.5%, reducing to 15% equity or a
10% carried interest if minimum exploration expenditure is met by the incoming parties under
certain conditions.
Pursuant to these agreements, Lake Resources surrendered its three exploration licences and new
exploration licences covering the same areas as the surrendered licences were granted to the
Pakistan-incorporated operating entity, Chagai Resources (Pvt.) Limited for a period of 3 years,
effective 12th June 2015. Lake Resources’ interest in Chagai Resources is held though a wholly
owned Pakistan-incorporated subsidiary, Lake Mining Pakistan (Pvt.) Limited.
Lake Resources N.L.
Tenement details are set out below.
Chagai Resources Balochistan Tenements
Tenement
Amalaf
Dasht-i-Gauran
Koh-i-Sultan
EL Number
(143)/2801-02
(144)/2803-4
(145)/2805-6
Area
(sq km)
46.7
29.1
85.1
Lake
Interest
(see above)
(see above)
(see above)
Date of
Grant
12/06/2015
12/06/2015
12/06/2015
Date of
Expiry
11/06/2018
11/06/2018
11/06/2018
A condition of the new licences is that the Balochistan Government should have up to a 25% interest in the licences – the government previously advised that preparation
of a draft agreement was under way.
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
operated by Chinese company Metallurgical
Construction Corporation (MCC). In 2005, one
of two RC percussion holes drilled by Lake
low-grade copper-molybdenum
intersected
(see previous annual reports for details).
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.
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 undertook drilling programs in 2005, 2007-8 and 2012. Geologically
significant copper, gold and trace elements were intersected in a number of holes — these results,
reported in detail in previous annual reports, support the potential for economic porphyry copper-
gold deposits.
During the year under review, site visits to the project area were undertaken by CRME personnel to
assess infrastructure and access requirements and a detailed program and budget for resumption of
exploration on the licence areas was prepared.
Commencement of field work was delayed pending approval of government security clearances for
key project personnel – the security clearances were granted in June 2016.
3
ANNUAL REPORT 2016
New Projects
As pointed out in the Chairman’s Report, the
company continues to investigate other
investment and exploration opportunities.
Lith NRG Pty Ltd
On 25th May 2016 the company advised in an
announcement to ASX Limited, that it had
signed a conditional purchase agreement for all
the shares in Lith NRG Pty Ltd, a private explorer
with lithium-focused exploration applications
in Argentina together with a capital raising to
fund exploration (see location map below).
The agreement is conditional on completion of
due diligence and approval by shareholders at a
general meeting.
Basic Terms:
! Lake Resources (LKE), which has
95,876,034 shares on issue, would acquire
Lith NRG Pty Ltd, which is a private
Australian company with potential lithium
exploration applications in NW Argentina,
subject to successful Due Diligence.
! Proposed consideration for the purchase of
50% of Lith NRG P/L would be 50,000,000
LKE Completion shares (fully paid ordinary
shares in LKE), once shareholders approve
the transaction and a key Condition
Precedent is satisfied, namely that the rights
to the exploration applications in Argentina
be transferred into an Argentine subsidiary
wholly owned by Lith NRG P/L, which is
currently underway.
! A further 50% of Lith NRG would be acquired
for two tranches of 25,000,000 Performance
Rights in LKE (Milestone Shares), converted
on achievement of certain milestones,
including when 50% of the current titles
applications are granted and a minimum $2
million future capital raising.
4
! Options would be issued at 1 option for
every 2 LKE shares at $0.05 per share, with
an 18 month expiry, granted as each
Condition Precedent and hurdle is met.
! A capital raising of $0.5 million at $0.02 per
share, fully committed, would be conducted
with the transaction to fund exploration.
! Two new seats on the LKE board are
proposed, once the key Condition Precedent
has been met. One of the new directors is
proposed to become Managing Director, a
geologist with significant experience with
lithium in Argentina. A salary and incentive
package would be provided at market rates.
Exploration Tenements:
! As at 20 July 2016,
the exploration
tenements comprised a total of 53 Mining
Lease Applications totalling approximately
94,000 Hectares in 3 areas in north-west
Argentina - Olaroz-Cauchari, Paso and
Kachi (see location map below).
Shareholders will have the opportunity to vote
on the agreement at the company’s annual
general meeting in the September 2016
quarter.
22° S
Map Area
Mendoza
A R G E N T I N A
BUENOS AIRES
N
Olaroz-Cauchari Area
1000km
Jujuy Prov.
24° S
C H L I E
San Salvador de Jujuy
Paso Area
A R G E N T I N A
Salta
Cacamarca Prov.
Kachi Area
Salta Prov.
26° S
Cafayate
100km
68° W
66° W
San Miguel de Tucuman
64° W
Lake Resources N.L.
PAKISTAN
ARGENTINA
AUSTRALIA
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 2012 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.
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
www.lakeresources.com.au