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Lake Resources' shares in Australia surge after launch of strategic review

The shares of Australia's Lake Resources soared by more than 9% after the company announced a strategic review on its Kachi lithium project, located in Argentina.

The lithium developer believes that the asset is undervalued, even though the long-term demand has increased for battery metals after a recent drop in the price of lithium carbonate.

The price of lithium carbonate fell to its lowest level since August 2021 last month, due to a prolonged decline in demand from the electric vehicle industry.

The benchmark index rose 0.1% to 0050 GMT, while Lake's stock is on course for its largest one-day gain since April 24.

The company is considering a number of options, including the sale of a stake in the project or a possible sale or merger.

The Kachi Lithium Brine Project is the largest independently-funded project in South America's "lithium triangular" region, with resources totaling more than 10.6 million metric tonnes of lithium carbonate.

Lake Resources stated that recent examples of companies with Argentine Lithium projects receiving proposals far exceeding their current market valuations has influenced the decision to explore alternative strategic options.

The review is more than five-months after the company agreed to sell its non-core assets of lithium brine in Argentina for nine million dollars. Reporting by Nichiket in Bengaluru, editing by Mohammed Safi Shamsi & Alan Barona

(source: Reuters)