Lake Resources NL (LKE.AX) Earnings Call Transcript & Summary

Good morning, and thanks for joining us for Lake Resources' September Investor Update Webinar. Joining me today is Lake's CEO, David Dickson; Scott Munro, our Senior Vice President of Technology, Strategy and Risk. And Jonathan Nielsen, our Project Technical Director, who we also referred to sometimes as the resident expert on DLE. We're excited to share with you today updates on our progress towards completion of our Phase 1 DFS. And talk a little bit in detail about recent results from Saltworks testing and DLE in general. And with that, I'm going to turn this over to Jonathan to get us started on Saltworks and what we learned from a recent report.

Thanks very much, Karen. Very happy to be here today and have a chance to talk about DLE technology and all the important work that we've been doing, carbonation. One of the things probably to start out with is to make a distinction. We have a couple of different demonstration plants that we've referred to as demo plants. The first that we're going to talk about here is the Saltworks carbonation where it's separated apart from the Lilac DLE Kachi plant. So just to make sure that we have a distinguishment there between the two because we will talk about both of them as we go through the presentation today. Significant milestones from Saltworks and the work that we've been doing and the conversion of lithium chloride, lithium carbonate been about 6 months or so worth of work with these folks. The work that we've been doing here really has been done with the purpose of creating data and providing data to support the process design and the DFS that we're working on. It builds confidence in the system and the technology that we're using and our ability to produce battery-grade lithium carbonate and it derisks the product. I mean those are the big milestones that we're trying to achieve when we do this -- did this work and we engaged Saltworks in this program. But the other thing that we did is we create provided a solid base for project due diligence. We've been able to test this at scale, unit operation -- [indiscernible] the unit operations going from reverse osmosis and purification, evaporation, carbonation, all of those that we were able to test at scale and provide that basis for future due diligence.

Jon, I think can I just jump on that. So for this lithium chloride to lithium carbonate part of the plant, this isn't proprietary technology that's sitting behind a wall.. This is all open up technology that's well proven, and we are just looking to how to put the pieces together in the most efficient manner for our project.

Precisely. Yes, this is conventional technology, the system that we have, as we talked about, the unit operations are all conventional. They're all in use today. Lithium carbonate production is simple chemistry, but it's a bit of a part when it comes to producing in the battery grade, and that's the work that we did was to be able to hone in on all of those different nuances to help us create the highest quality product that we can. This work was done with the 120,000 liters lithium chloride that was produced at site, the Kachi and it was shipped from Argentina to Bridge Columbia. It was the feed material that we used for this. I think -- and I want to be careful, but certainly, we think this is one of the largest DLE to prime to carbonate projects that's probably ever been undertaken. And one of the questions we kind of have is why did we do this? Why would you have a program of such size and not just use the minimums, why do you just produce the smallest amount that you possibly need. And it comes back to what we talked about before. If you're looking to provide data and you're looking to derisk the project. This scale, it gives us confidence. It gives us all of the information that we need to fit into the DFS for the process design. And the other thing that we did that's a little bit unique is that we generated a host of recycling waste streams that we'll use for vendor qualifications later on. Many times in these projects, the vendor qualification has to be done on synthetic solutions that they create because they don't have -- we were able to generate volumes of solution here that we've set aside and we're going to use those for the qualifications right there on that.

And when you're talking about, you're talking as we transition to feed and then into detailed design and procurement because at the end of the day, we want the most robust quality -- qualification process that we can get when we move into that detail for it execution based.

Precisely. Every project will go through that phase where you go into your vendor qualification, go through feed, and they all give us process guarantees and things and they'll do the test work to validate that on their own side for their own purposes. And in our particular case, they're going to be able to do that on a real solution that came from brine [indiscernible] Kachi created -- produced into [indiscernible], and converted into battery-grade carbonate and the recycle and watch solutions become [indiscernible]. I think we go to another slide here. We do have -- on the slide deck, we do have some pictures that you'll be able to see if some of the carbonate that we produced and some of the data. We converted about half of the contained carbonate into battery-grade material. And the other half is contained in, as I mentioned, the recycled solutions and launch solutions that we're going to hold for the validation work later.

So just to touch on that a little bit. We did the program in 3 batches, right?

Correct.

And each time we learn from the process, right? As you mentioned earlier, maintenance a combination part is to some extent an art as much as a size, right? But each time you can see we might have produced more product and we produce our better quality product. So now by the end of the [indiscernible] batch, which is the end of the program for us. We're in a great position to plan for folded execution there.

Yes, precisely. We -- our goal is battery-grade lithium carbonate, which is qualified at 99.5%. And you can see that all of the work that we did was greater than that from a purity standpoint. So we were happy to say that -- to see that, as we said, every step with an improvement in yield, in quality. And so we learned a lot. It was effort well spent with this group, and we're very happy with the situation we're at right now. I like to use the term, we put ourselves in the best position for success for our commercial plan.

And [indiscernible] a lot some available for offtake. So we could have offtakes lined up along the street [indiscernible].

Yes. This is not a project where we produced a couple of kilos in a lab so that we had some material available. We've got -- we need a trough.

And Jonathan, when you were working with Saltworks, they have their scientists and engineers. I mean, do they have any commentary around the quality of the lithium chloride and the process stuff that we're getting such a high lithium pit.

Yes. Certainly, when we started the program with them, they had commented about the purity of the [indiscernible] came into the site. These folks obviously have a chance to see a lot of different brine and different eluates in the field, and certainly a very positive comments. And the work that we've done here was a excellent collaboration between our technical team, the Saltworks technical team and our project partner and Lilac as well. This gives us a great opportunity for us to bring the teams together and really work towards the end goal of providing the very best product that we can. We've got a flow sheet that will be on the slide deck as well for those to see if they follow that talks a little bit about the work that we've done. We've highlighted in a box here, the Saltworks demo specifically because, as I mentioned, at the league that we have also the [indiscernible] demo and we don't want to confuse the 2. So the work that we just talked about is in the blue box at the bottom that goes through the steps post DLE that talk about to -- walk us through the concentration, purification and production of the carbonate unit. We have -- essentially, and we get these comments, these questions, we've highlighted some of the recoveries that we are targeting for the DFS and the commercial plant on here and water consumption and you may have a chance to talk about that a little bit more.

Well, I think it's important -- we've seen people ask questions, right? We've built demo plans. We've not built the commercial plant. The purpose of the demo plant was to demonstrate the processes that we're going to have in our commercial plant. It doesn't have all the recycling streams. It doesn't have all the recovery streams, but we've collected data that supports these recovery figures that we are using as the basis for our [indiscernible]. So 80% -- greater than 80% in the DLE part of the plant. So [indiscernible] demo plant that was provided by Lilac greater than 97% recovery in the carbonation stream, right, which means for us overall, 7% 8%, right? So we are confident that the demo plants have given us sufficient data that we can take these on the design and the DFS and then convince someone during our due diligence process based on the data that we've done. Is that correct?

Precisely. Right.

So I'm just trying to highlight the fact that we have a demonstration plant. We're there to show and collect data. We're not there to produce carbonate. That's not the primary purpose of this plant. It would not be an efficient use of resources for us to keep running this plant forever. Once we've got all the data we need, it's time to shut it down, right? That's the nature of the beast that's what happens with demo plants.

Yes. The demo plant is simply a system to validate a commercial process, nothing more than that. And it's not a commercial operation. It is not intended to be a commercial operation. All of the units are recycled and things are not in there and in the end, a particular production volume, production target is not the purpose.

That's really helpful because we do get a lot of questions on that. So I'm hoping that's clarified the purpose of what we're trying to accomplish here.

So Jonathan, there's still the naysayers in this industry, which I disagree with all the time. So here, we're expert, we represent like we've been in this industry for some time. I mean what do you say to the naysayers at [indiscernible] I mean you partly say to everybody, DLE works, right? DLE is a generic term or direct with mix structure. As a technical expert, what would just say to the naysayers?

Obviously, DLE -- in the lithium industry, DLE is a new technology, and that's what everybody is concerned about. But the reality is, is that DLE in ion exchange that we're using on our process, is not [indiscernible]. Ion exchange is a technology that's industry-wide, it's used all over and the assortment is unique to the lithium. Work that we've done when you start with -- even before the demo plant was produced, I think the Lake Lilac team has been working on this since 2019. A tremendous amount of work done, a tremendous amount of data. The DLE is field proven. We've been running the demo plant there now for millions of leaders of brine. Really a tremendous program that we've done, produced thousands of liters of eluate. It feels proven. The work, as Scott said before, you talk about demo plant, when you've done the work, you've done the work, we collected the data. So for the naysayers, I would say I understand that they want to see commercialization that we all do. That's the path that we're moving towards. But each of the steps that we've accomplished along the way, certainly for our project, and I would even say a larger umbrella for DLE and general, DLE works. There really isn't any question anymore that DLE works. And we've proven it in the field, we've proven it extensively in the field, well beyond lab tests. And I would say that you probably need to step back and realize that we -- just because we have to finish that commercialization doesn't mean it doesn't work, DLE works, just getting the steps up to the commercialization, we're getting there.

I think we often we do get prices off and DLE is a big bucket, right? The multiple that makes DLE. Maybe want just discussing why we think ion exchange, Lilac [indiscernible] the good match for our particular conditions.

Yes, absolutely. It's -- it is a question that we get often, and it's a very good question. It's viable. And you look at it and you said there's a number of DLE technologies that are out there. There's 3 that are kind of the primary. Ion exchange, there's absorption technology and solvent extraction technology. Membrane gets mentioned but as a technology alone, it's usually is supportive to one of the others. For us, in our application, there's really a few unique features that ion exchange brings that are really beneficial for us and needed for our particular resource. One of them is our brine in [indiscernible] South American brine in general, is that ambient temperature. We're talking between 10 and 20 degrees. So it's not a heated brine you might see in geothermal application [indiscernible]. So the kinetics are very important. When you have a brine that's not heated, ion exchange gives you wonderful kinetics. You don't have to worry, you can treat the brine directly. And that's a definite advantage for us to be able to have fast kinetics. Fast kinetics means that you have small equipment, faster processing and you have lower costs. The other thing is there's a lot of consumption. I mean our resource is located in an arid region of Argentina. So water is important and proper use of water is important. And one of the benefits of ion exchange technology is it's one that allows you most control over water use and minimize water consumption. So for us, that's a very important factor in technology choice. And one of the others is the eluate concentration. Ion exchange allows you to produce a higher grade value with. That's the lithium chloride that comes from the DLE. That's the product from the DLE. This is what we call eluate and the high concentration of lithium in that eluate, again, means there's less work to do downstream. You have less work to do to concentrate that up to the carbonation stuff, the purification and the work that we just deal with [indiscernible]. When you have higher lithium concentration, you have less work to do, less work to do means lower energy. So really, those things combined for this location, remote area region in Argentina really makes ion exchange an excellent fit for DLE technology for our resource.

One of the things that we talked about just a little bit ago, but I think we do get questions about it as to why do we run the demo plant as long as we [indiscernible] why do we have this program. We have 2 significant demo programs that we've run with Lilac on the brine and we just talked about the software extermination. And really, it comes down to that naysayer question and building confidence in the process for us and for the market. This program that we've been running, we'll be finishing it up here in another month or so. And by the time we're done, I think the estimates are we're going to run some 4 million liters of brine through this plant and produce a couple of hundred thousand liters of eluates. That's a tremendous test program. That derisks our [indiscernible]. That gives us fantastic data going into the design of the process, the DFS. All of the things that we need to optimize so that again, using this phrase again, putting ourselves in the best position for success for the commercial plant is gathering all of this data and feeding it into the commercial design, and that's what we've been able to accomplish with this. The other thing that we've done, and it dovetails a little bit of a conversation with Saltworks is, we have a little bit of a unique situation here where with the eluate production that we have we, again, will have vendor qualification work that will be in combination with the streams that we have from Saltworks. We have real eluate that we're going to be able to supply to those vendors that they're going to be able to do that work on when we get into the feed. Again, that's unique. Most of the time, they have to do all that work on synthetic solutions because they don't have it available. We have real solutions. So again, derisking and confidence in the process is really at a high.

So [indiscernible] Scott, would be good to see you. I cannot talk again about process were to go here to making us this not only commercial, but taking industrial scale and they contend to remind our shareholders what retention from where we are today, it's going up.

So Jonathan has mentioned. So we've done this extensive test program. We collect all the data. We've got third parties verify in various components of it, particularly when it's proprietary and be looking so but was [indiscernible] in the comp, right? So collecting all of that data, that will be available to support for DFS, right? The DFS is built on [indiscernible], right? Then the next question people ask us, well, yes, DFS is a nice engineering document, its deliverable. How do you then translate that to [indiscernible] plan, right? And again, as I highlighted, the carbonation stream is just open up known technology, nothing new, nothing that we should be concerned about. We can go to the public markets and buy from multiple vendors. With our friends at Lilac the DLE component, there are obviously proprietary pieces of that equipment. What I would say is that we have done the major scale up on this project, right? The orders of magnitude scale-up has been done when we move from bench to demo, right? Our next scale-up is about producing multiple modules of the same equipment. And we've had meetings this week with our friends at Lilac. And they highlighted the work that they've done as a result of this demo plant work to simplify their supply chain, right? So they've gone -- they've got rid of this much proprietary equipment that they can, and they're trying to use up the show supplies that they can get from multiple vendors because they have recognized that this isn't about making their equipment bigger. It's about making multiple repeatable modules for this same equipment. So they have now restocked that design. The largest single scale-up they've got left to do is 3 to 1 scale up, so less than our other magnitude. What we've already done the 10 to 1 scale ups, never 1, 3 to 1. Everything else is pretty much the same size it's going to be, and we're just going to have to repeat and produce multiple to these models. So really what I'd say at the moment is thanks to the demo plant. The guys have learned a bunch of lessons on the pop we kept that they would like to standardize and make available from a wider source of suppliers, then they plan to that. So they're going to give us that data when we get the DFS feedback in the next couple of weeks. That will be built into our program. And then when we move in field and detailed design in the next 18 months, we'll be ready with our [indiscernible] execution plan that isn't reliant on proprietary equipment or proprietary suppliers. It's a line on the full open market, which means that we can access the wider supply chain to get the best, most commercially viable project that we can. So really, we're trying to -- trying to not only allow from the science and the numbers that we need to the DFS, we're trying to prepare for that next phase we'll get to execution as we prepare that.

That's fantastic. And Scott, perhaps if we can go into a little bit about what you've been up to in the last 30 days since we last met and walk through some progress points on the DFS.

Yes. So the -- as I mentioned to Karen before project management is not really a spectator sport. So it can be -- it can look a little bit boring. If you look at it, it's the increments -- so I'll just give -- where we are in summary is we're on track for DFS by the end of the year, right? That's the major headlight -- what does that mean? Well, in terms of process design, as Jonathan has mentioned today, we essentially -- we've frozen the process design for the Phase 1 plant. That's now fixed. It's the basis for all of our modeling, all of our engineering design work, and we're using that as a basis of DFS. So that's frozen. That's great. That means we can free up all of the other work streams. However, there's another area where people are asking lots of questions. So we are just about to conclude all of the engineering work that will support the DFS. So that work was being conducted by District [indiscernible] in Argentina. They are completing that for us at the moment, and we have a third-party consultant who is reviewing the commercial output for that to validate that, that can be used in our DFS. So again, in terms of DFS positioning, where we want to be at this point, we're about 3 months from delivery of this document. So we're progressing well. Well, for the next phase of power, we need to transition from design, from feasibility to commercial agreements, that's a conditional precedent for moving the project forward. So we are now in the process of ramping up our efforts on commercialization of the power solutions. So that's engagement with independent power producers. We have [indiscernible] now who have expressed an interest to participate in the commercial process and that commercial process will commence in the next quarter, and we would hope to conclude that prior to -- well, it's a conditional precedent. We need to have it closed before we move on to the next phase of the project. In terms of the rest of DFS materials, process design and power or massive inputs for us, right? It drives a lot of the rest of the project, but we've used this time. We've been working with our friends in the hydrogeology groups. They've been asking for some modifying factors as they start to think about the next phase of the resource to reserve calculations. So we've been given on the input for that equipment list on our frozen as well. So we now know based on the process design, what equipment we need to go and procure so we're out engaging with the market to get pricing back for that. That will then feed into the CapEx and OpEx estimates, which is a key part of the DFS output. So that's process as much started, and it will take the next 2.5 months. That is the -- as we often say, the long pole in the tent, right? That's the part that holds up this whole thing. The EIA is progressing on track. So we're still on track for submission at the start of next year. We've now handed over the key deliverables from hydrogeology and process design to our EIA contractors so that they can start their work. We've also done a number of the statutory consultations in country. And that's an ongoing process where we meet the local community, we meet the local authorities to make sure they are up to date with what we've been doing. And I know we've been continuing to pump test because that's been a key area of focus on reinjection, and we invited the local authorities to come and witness that work as well. So good progress all along the activity streams and our [indiscernible]

Fantastic. That's great. David, I know you've had a really busy 30 days first, I think you're back on U.S. soil for a little while. Tell us what you've been up to?

Yes. So if we go back to the last webcast, I think what I explained to everybody is the operational update. The plan is my big focus is there's one thing and know this, I hope we will get this project final investment decision in Q1 of 2025. So that means working with all our stakeholders to make this project to move forward. So over the last month, European kind of all over, we spent most of the 1 week in Washington, D.C. But we're not only there, we've been with the U.S. government, but also networking from Canadian government, U.K. government. Then really looking at with organizations such as MSP, our business [indiscernible] kind of prominent in the whole [indiscernible] sector. So they will continue to progress on that. But the big focus really is more on very strategically deliver this, and now looking up everything commercially, right? So if you think about Q1 of 2025, we are going to look at our capital needs to get to that point. And then from that point on, was always there project financing, which obviously creates both equity and so we spent a lot of time with our advisers. We'll spend a lot of time with off-takers. And I think we highlighted to the shareholders before is that publication of the DFS and the [indiscernible] triggers a number of activities wanted to be, you get into detailed due diligence and negotiations with the [indiscernible]. So a lot of our focus has really been on how we deliver this. And then you've heard from Jonathan, Scott today, I'm not concerned about DLE, and I said that publicly many times and [indiscernible] presentation of the past markets last week, I think is -- DLE is all about efficiency and the capital efficiency, whether that's in CapEx or OpEx. But then DLE works, and that's why I asked Jonathan question with regards to the net sales because I think we've got a large number of new sales in this industry that just really need to get with the program. End of the day, a long-term, we've got a responsibility to ensure that we're extracting with the [indiscernible] a very responsible way. And I think this industry is kind of lacking some of that culture of the [indiscernible] resources can provide some of that as well. The other thing last week, Scott and I have the pleasure of both of us speaking at fast markets in Europe. Interest in marketplace in our European -- battery raw materials [indiscernible] when the U.K. Prime Minister decided to delay the ban on petrol cars or the sale of petrol cars from '23 to 2035, which this year came in line with just about every other country, but timing could have been better. But I think what's interesting in our conference is, whilst macro is really suppressed, right, the prices of lithium has come down, all given by what's happening in China. But long term is -- the supply-demand situation for lithium longer term is going to become stretched. And I think that's going to happen kind of '27, '28 onwards after all the forecasts. But one interesting thing is, as Scott and I observed is when you look at the supply demands, the only way this industry can meet the supply is for these DLE projects to actually move ahead. And that comes back to the part that says DLE has to work [indiscernible] we weren't in the Lilac as Jonathan described, DLE works, right? So we're going to pass that point and we're just going to have to leave the naysayers behind us and move forward and just make sure that our project normally is efficient, obviously very efficient from a capital basis. And it's a really big focus on the company today is, heard from Scott, is making good progress on DFS, where we're shifting more into the -- how do we hit that [indiscernible] investment decision in Q1 of 2025 and then stick to our plan we just let them by the second half of 2027.

It sounds like we're making great progress and excited that we are on track to deliver the DFS in December.

I'm going to move on to some investor questions that we've received recently. The first one is the status of our other projects.

Yes. No, good question. I mean, I think we've said this before, on the other 2 projects, we're still acquiring a lot of data [indiscernible] lot of what you call early exploration. And we're looking at a review of those 3 assets for this next coming month and we come to the market or towards the end of the year or really what our longer-term plan is with the particular assets. But now what we said before is with the amount of capital that we have as a company, and we have to prioritize our capital, and so we'll be in a lot of effort into Kachi because, obviously, that is our first line of sight of any revenue. And I think we demonstrated that by the work that we did by drilling deeper, for example, where we highlighted that we can [indiscernible] timeline or buying good quality of battery. So we'll come back to the market once we've been with is the valuation of this next month or so.

Great. Thanks. Also a question on how our engagement with Canada market is going and if there's any update there?

Yes. I'll let Scott -- Scott was down there not so long ago. I'm going to talk from a high level. I mean an important thing for us is the relationship that we have, the provincial government stage, and we continue to -- I think I said it before, we have a good relationship. We continue to strengthen that relationship. And again, we had a large delegation to our Canada market government come visit our site only last week. Everything remains extremely positive. They like what we're doing. I think the fact that we're utilizing DLE and we have a big focus on ESG is significantly kind of helping the relationship. But certainly no concerns with an [indiscernible] Canada market and Lake Resources position within Canada market.

Yes, I think as everyone knows, it's coming up for election season in Argentina. That's both federal and the governor of capital markets [indiscernible] favorable result in the primary process. But obviously, elections are elections. The elector will decide who won the race. So I'd say everyone is in that period of waiting to see the outcome. But we did -- even last week, we had a delegation both federal and provincial come to site again. And so they are very keen for this project to move ahead. There is a little residual reluctance to support mining at the market because there was a copper mine back in the day, that caused some issues related to water. So the governor and his team and the [indiscernible], they want to see a project work that maintains that water. And that's why ion exchange is a perfect trip for us. We are doing everything we can to preserve the water table in its entirety, but particularly the freshwater [indiscernible], which is used to support agriculture [indiscernible]. So obviously, fresh water is vitally important to them and that's not an overabundance of it. So we need to protect there. And so all of the engagements we do is to tell people we were going to do with freshwater to deal with [indiscernible] we're going to do with reinjection, and that's why again, we had people at site last week watching our latest reinjection test so we can get an experience for [indiscernible] what it really means to reinject at volume for duration and that's part of the world.

Speaking of reinjection, do we have any update on our efforts there and how we identify sites for induction well.

Reinjection is a model [indiscernible]. So our guys who like to play the models and likely to run the software programs, they could put reinjection anywhere in this field and it would work. But what we're trying to find is the optimal position for reinjection, right? So we've got data that will -- that allows us to build models that support the DFS. While we'll say that the reinjection program and extraction program will be a life of mine exercise. We will for each well that we have, we will have multiple monitoring works. So we will have real-time data coming back through the life of this -- so yes, we have sufficient data to create our planned layer to the field. But that may and probably will change because we will be collecting data all along. And even once we get the production, the great thing about our module design is we don't need to drill all of our wells at the front end and then leave them. We will be progressively adding wells as we step up and ramp up this project, and we'll have the benefit of all the data that we have collected up to that for. So we will continue to collect data. We have sufficient development model. We will continue the client data through even next year [indiscernible] and even beyond that, once we start going to execution. The [indiscernible] program is not for [indiscernible]. It is a live element. It is a live part of our management program. And even if you look at the EIA process and [indiscernible] market, it's like a document, it's a 2-yearly cycle, you need to renew and refresh, and reinjection will be a key part of that because we will learn more as we go.

I'm going to take advantage of Jonathan's expertise to answer some very detailed questions here, which actually relates back to water consumption. Jonathan, what volume of water is consumed for the wash cycle, is the water recycle -- does the water come back into the [indiscernible]? Can you walk us through that?

Sure. We won't talk in specifics about each stage of the process necessarily, but we look at it as an overall water consumption for the project. That's what we're trying to minimize, and that's what our goal is. The design that we have right now and everything that we're targeting is for a 10 cubic meter per tonne LCE produced water consumption. We have multiple -- and you'll be able to see in the slide deck on the diagram that we have. We have multiple points of water recovery. We use reverse osmosis, evaporation. Many, many steps within the process to recover the water that we use and recycle and keep that water going in a loop, which is typical for either the vertical processes so that we minimize the water consumption that we have. Again, going back, we've said a couple of times now, one of the advantages for ion exchange and the Lilac technology is that helps us keep that water consumption very low.

And is the brine wastewater treated prior to reinjection?

The only treatment that we look at right now is we want to ensure that the -- we call it the spent brine or the lithium depleted brine that goes back into the operator, goes back in and the same PH, the same condition as when it came out. There is a slight adjustment with sodium hydroxide, which produces sodium chloride, which is the majority of the brine that we are dealing with in any case that happens before it goes in. That's the only treatment that we're looking at. It's just to ensure that the reinjection of the brine it goes back in, in the same PH as when it was removed. That's the pretreatment that we're looking at right now.

One more very technical question. What is the volume of asset consumed? How much excess asset is consumed? And what is the volume of sodium hydroxide consumes the balance of the Ph?

Well, when we talk about specifics about the consumption, all of those numbers will come out with the DFS, so when that is produced in December, you'll have the specifics about those. But just to speak about, I think, the question -- behind the question here. Asset consumption, when you're dealing with ion exchange technology is really a simple sociometric exercise. For every lithium ion that you extract, you replace it with a hydrogen ion. So there's very little excess asset that's needed for that. We do have a few points within the process where again, you're adjusting in PH for different process parameters for each unit operation. So there's some consumption there. But in general, when you're looking at asset consumption, you're looking at the ion exchange you're looking at DLE when you boil it down, it's really sociometry, it's chemistry, and there isn't much of a need for excess there. So we don't have a lot of excess asset consumption for this process that goes into the [indiscernible] or anywhere else. All of that is contained within the process. We recover it, and it's stay in the loop.

Great. I learned a new word today, for sure. And what is the recovery rate at Kachi for 200 milligrams per liter brine?

So the process, and again, you'll see some of these numbers on the diagram in the presentation. The target that we have for the DLE technology for the DFS process design right now, its greater than 80% recovery. The remainder of the process, which, again, stepping back and it fits into this conversation, the work that we did at Saltworks with the carbonation, all of the steps post-DLE to make the lithium into a carbonate product. We have about a 97% recovery there. So our overall process target is a 78% recovery, greater than 78% recovery for overall lithium from brine -- from lithium into carbonate.

Thank you. I think we've covered most of the other questions that we've received in your prior remarks, but just to circle back online, demo plant production. I know there was some confusion about demo plant production. And hopefully, we clarified that today. But Scott, I don't know if you wanted to add anything more here.

Yes. We're seeing some requests for explanation. We believe that there may have been some public release by Lilac eventually. In 2022 to say that the demo plant was designed for 40 tonnes per annum capacity. I'm not quite clear where that came from. But again, if you look at the agreements that we have in place, we were public about what we're trying to achieve. We were trying to achieve 2,500 kilograms of contained lithium [indiscernible] carbon equivalent in eluates from the demo plant. That was supposed to take 6 to 8 months, it took 6 months, right? So we are right on track. But again, if you say 2.5 tonnes in 6 months, then it's our pipeline plan. The other thing I'd say, I have been at site many times, right? If we -- if that was a 40-tonne per annum plant, we would need 2,000 [indiscernible] to containers or 2,000-meter cubes of storage. And then certainly didn't see who [indiscernible] where all we ever bought 250 meters cubes of storage because that's what we were intending the plan to do. So the plant has done exactly what we wanted it to do. There's no underperformance. It has performed the way it was supposed to perform. We learned a lot through the process. So we'll make it better as we go along. And that's why we gave the team a chance to run the program a little bit longer than originally planned. We gave them an extra 5 months of work as they wanted to learn some more from the plant and we had the opportunity to do that. But that work is now done. By the end of October, we'll be finished with the demo plan, and it will be decommissioned. -- and set off to whatever its going to go.

Fantastic. Well, those are all of our questions for today. David, any closing remarks?

Yes. The only thing I wanted to highlight to our shareholders is going back to the operational update, we're heavily criticized because of the significant growth in CapEx. And we highlighted to everybody that the reason being is that this is a project where 80% is processed plant, 20% is essentially mining and really the process plants for the growth in costs. What is interesting now is that a lot of the industry has now started to catch us up right. So there is a developer in the U.S. in [indiscernible], the DFS like a couple of weeks ago and when they look at their schedule and their CapEx, it actually comes in line with what we are -- what we predicted back at our operational update. They're interested as there's a number of other developers that are now starting to come out with cost increases and one most recently and most of the cost increases are actually related to the processing side of the project, not the managed side. So this goes to say what we're trying to explain that the operational update is, this is an industry which is emerging. This is an industry that needs to collaborate probably more with other industries, particularly with regards to process. So we are -- as I said before, we're more of a specialty chemicals business, not a mining business, not in oil and gas. And I think we're seeing now with these rollouts on capital costs, whether it's more gas for actual really as a result of the industry actually learning the whole process and around extracting lithium combine and obviously convert go to battery grade or whatever. So I think that the industry is now starting to realize what relates to the cost. And I don't know it was [indiscernible] back in June, but we are trying to see is what else is happening in the industry is that I think it demonstrates this leadership team has got a good handle on....

Absolutely. Well, with that, I want to thank everyone who's joining us today. And thank you, Jonathan, so much for sharing your insights and expertise.

It is good to be here.

I really appreciate the update. To our shareholders, thank you very much for the questions you submitted. We tried to cover as much as we could. But as always, feel free to e-mail me directly if you have additional questions that were not covered on today's webinar. Thank you, and we look forward to updating you next month.