Lithium developer Lake Resources on Monday announced further cost reductions to extend its financial runway and better position the company to complete a strategic partner selection process for its Kachi project, in Argentina.

The ASX-listed company previously announced a 40% reduction in expenditure for the March quarter, but is now implementing further savings. These include reducing its workforce by 50% across its noncore operational and administrative staff and additional streamlining of other general and administrative expenditures.

As a result of these actions, Lake expects a 30% reduction in expenditure in the June quarter, compared with the March quarter.

“We are committed to taking all necessary actions to preserve our financial flexibility while we execute a thorough and prudent strategic partner selection process that results in the best outcome for Lake and its shareholders,” said CEO David Dickson.

Goldman Sachs is acting as financial adviser to find a strategic partner for Kachi. Lake has reached out to a wide array of potential partners, including car and battery manufacturers, lithium producers, oil and gas companies, sovereign wealth funds and private equity.

The company expects the process to conclude in the second half of the 2024 calendar year, with a final investment decision to follow about nine to 12 months thereafter.

Dickson stated that Lake planned to deliver the Kachi project in 2028, which would align with the start of a prolonged period of structural deficit for battery-grade lithium chemicals.

A definitive feasibility study (DFS) for Phase 1 of the Kachi brine project has shown strong and competitive economics. The DFS estimates a post-tax net present value of $2.3-billion and an internal rate of return of 21%. The Phase 1 development is estimated to require an initial capital expenditure of $1.38-billion.

Kachi's total resource is estimated at 10.6-million tonnes of lithium carbonate equivalent and the project has a projected mine life of 25 years. Phase 1 is expected to deliver 25 000 t/y of lithium.