LAKE RESOURCES N.L.

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Lake Resources N.L.

2011 ANNUAL REPORT

ANNUAL REPORT 2011

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

A.B.N. 49 079 471 980

Directors

Ross Johnston Chairman

Peter J Gilchrist Managing Director

James G Clavarino Exploration Director

ASX Code

LKE

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: [email protected] 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

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Lake Resources N.L.

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Chairman’s Report

Dear Shareholder

During the year under review, the company's activities focussed on fund-raising through a non-renouncable rights issue to existing shareholders and preparation for further exploration and drilling exploration activities in the Chagai region in the province of Balochistan, Pakistan. This region is situated in the Tethyan magmatic arc which extends from Turkey through Iran into Pakistan and hosts the Saindak copper-gold mine and the giant Reko Diq copper-gold deposit of Tethyan Copper Company limited (TCC) (see below).

At Koh-i-Sultan , we are exploring for 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. A small (2 hole) percussion drilling program conducted in late 2005 intersected strong gold mineralisation in drillhole LRM-01 on the western margin of the system. A subsequent 5-hole diamond drilling program in 2008 resulted in two additional discoveries:

! porphyry-type copper-gold mineralisation in drillhole LRMDDH-002 (392 – 520 m, 128 m @ 0.14%Cu and 0.19 g/t Au) and
! a very large breccia complex, intersected in all five drillholes, over a width of more than 700 m, with geologically significant gold values in four of the five drillholes. It is believed that the southern extension of this breccia also hosts the gold mineralisation intersected in drillhole LRM-001.

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. Our exploration target is large tonnage - low grade copper amenable to low-cost open-pit mining and trucking to the adjacent Saindak mine. In late 2005, one of two holes drilled by Lake to test part of this target intersected significant low-grade copper-molybdenum over the length of the hole with minor gold (12 -120m, 108 m @ 0.17%Cu & 94 ppm Mo).

Elsewhere in the Chagai mineral belt, joint venture partners Barrick Gold Corporation and Antofagasta Plc, continued to advance the Reko Diq copper-gold project, situated 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 (TCC), whose principal asset is a 75% interest in the Reko Diq project, with the Government of Balochistan holding 25% .

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.co.uk/ interior/operations/f_explora.html).

Barrick Gold, in their report for the Second Quarter 2011 (p.7), stated that “…the Supreme Court of Pakistan has ruled that the provincial government of Balochistan has the authority to grant a mining lease to the project company, Tethyan Copper. Efforts to secure the mining licence and associated Project and Mineral Agreements are expected to continue in the second half of 2011.”

On the world scene, commodity demand and prices have remained strong, with the gold price at record levels, reaching over US$1 800 per ounce during August 2011.

Our Company will remain focussed on its objectives and continue to position itself to take advantage of exploration and investment opportunities as they arise. In the March 2011 quarter, a non-renounceable rights issue of 35 161 513 shares at $0.05 (5 cents) per share was successfully completed, raising a total of $1 758 756. The current issued capital of the company is now 70 236 026 shares.

The next phase of exploration in Pakistan will concentrate on drilling our gold and copper targets at Koh-i-Sultan and the copper target just north of the Saindak Mine at Amalaf in the second half of 2011.

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

ANNUAL REPORT 2011

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. Following the encouraging results of the company's first drilling program in Pakistan in late 2005, work in Argentina was placed on hold to concentrate on the company's more advanced copper and gold targets in Pakistan.

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PAKISTAN
AUSTRALIA
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Pakistan

With a population of about 187 million (July 2011 estimate), the Islamic Republic of Pakistan is bordered by Iran, Afghanistan, China and India, and has a land area of 796 000 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 – GilgitBaltistan 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.

Pakistan held National Assembly and provincial parliamentary elections in February 2008. Pakistan's Government is led by Prime Minister Yusuf Raza Gillani. The next National Assembly election is due in 2012. An election for half of the seats in the Senate was held on 4 March 2009. The next Senate election (for one-half of the seats in the chamber) is due in March 2012.

Following the resignation of President Musharraf in August 2008, Asif Zardari, widower of the political leader, Benazir Bhutto, who was assassinated in late 2007, was elected President in September 2008.

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 20102011 is estimated at A$119 million.

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 2010 was A$703 million.

Major participants in the minerals exploration sector include Antofagasta PLC, a large Chilean copper miner and Barrick Gold Corporation, the world's largest gold producer, at the Reko Diq copper-gold project in Balochistan. There is a growing Pakistani community in Australia of approximately 17 000 Pakistan-born people and, in 2010, there were close to 5 000 Pakistani students studying in Australia.

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Lake Resources N.L.

CHAGAI PROJECT

Lake Resources is exploring for epithermal gold and porphyry copper-gold deposits in the Chagai region in western Balochistan.

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A F G H A N I S T A N
AFGHANISTAN
IRAN Quetta
Amalaf Chagai
Project I N D I A
Dasht-i-Gauran Karachi
Zahidan TCC Reko Diq
Project
Saindak Koh-i-Sultan
Copper-Gold
Mine
Taftan
Hwy Nok Kundi
I R A N
Lake Resources Licence P A K I S T A N
sealed
Rail
P
A
K IS
T
and
A
N
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Regional Setting

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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 Saindak copper-gold mine, adjacent to Lake's Amalaf Exploration Licence, and the Reko Diq porphyry copper-gold project of Antofagasta PLC and Barrick Gold Corporation.

Access is by sealed highway from the provincial capital of Quetta to the border with Iran. A widegauge 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 in the discovery of the copper-mineralised quartz-diorite stocks at Saindak.

Further exploration at Saindak during the 1970s resulted in the discovery of porphyry copper, gold and molybdenum in three deposits totalling 440 million tonnes @ 0.41% copper and 0.5 g/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 million tonnes 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.

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. The Government of Balochistan has a 25% interest in the project.

ANNUAL REPORT 2011

The current 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 0.22 g/t 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. Efforts to secure mining leases and associated Project and Mineral Agreements with the Government of Pakistan and Government of Balochistan are expected to continue in the second half of 2011.

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. In March 2003, three of the ELs were renewed over a reduced area for a further period of three years and again in 2006. These ELs expired in March 2009. Applications were lodged for new replacement ELs. Following negotiations with relevant authorities in Balochistan, three new ELs were granted for a period of three years commencing on 10th September 2009. The ELs are renewable for further periods of three years, up to a maximum of nine years. Details are set out below.

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Balochistan Tenements

Tenement	EL Number	Area (sq km)	Lake Interest	Date of Grant	Date of Expiry
Amalaf	(71)/5468-78	94.42	(see Note 1)	10/09/2009	9/09/2012
Dasht-i-Gauran	(72)/5492-5503	58.76	(see Note 1)	10/09/2009	9/09/2012
Koh-i-Sultan	(73)/5479-91	171.40	(see Note 1)	10/09/2009	9/09/2012

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”. Negotiations will be undertaken with Government of Balochistan to meet the provisions of this clause. Government of Balochistan advised in a letter dated 15th May 2010 that preparation of a draft agreement is in progress.

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 Saindak mine.

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 , 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.

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Lake Resources N.L.

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Previous Work

Initial exploration of the RL by Lake 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 a number of areas for more detailed exploration.

Work on the EL areas commenced with detailed geological interpretation of merged Landsat ETM and SPOT satellite images at 1:25 000 scale that resulted in detailed geological maps showing alteration zones that could be associated with copper-gold mineralisation. Subsequent ground investigations 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 six-hole reverse circulation percussion drilling program — two holes on each of the Company's three Exploration Licence areas—with encouraging results.

At Amalaf one of two holes drilled by Lake intersected significant 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:

! 33 -1 112 m, 19 m @ 0.29 g/t Au & 1.63% Cu; ! 12 -12 118 m, 16 m @ 1.14 g/t Au & 0.25% Cu; ! 18 -18 87 m, 69 m @ 0.55 g/t Au & 0.03% Cu (includes 36-60 m, 24m @ 1.05 g/t Au); ! 129 -129 140 m, 11 m @ 0.60 g/t Au & 0.02% Cu.

The hole terminated at a depth of 140 m in continuing gold mineralisation. i

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 the latter part of 2007, preparations were made for a 3 000 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. A logistics base was established at the village of Nok Kundi, approximately 35 km south of the drill sites, on the main highway linking the Chagai region with the provincial capital of Quetta and 2.8 km of access track to proposed drill sites were constructed.

Drilling commenced in December 2007, but was interrupted in mid January 2008 when unusually severe weather conditions including heavy rain and snow falls resulted in damage to the access track and water supply dam.

Drilling resumed in mid-April 2008 and continued until 6th August 2008 when a local thunderstorm severely damaged the site access road and water supply dam. Five holes were completed for a total of 2 284 m.

ANNUAL REPORT 2011

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LRMDDH-004
LRMDDH-003
LRMDDH-005 Nawah
New Access Track
LRMDDH-001
MIRI LRMDDH-002
WEST
Caldera
2005 Percussion Drillhole LRM-01
3-12m, 0.29 g/t Au, 1.63% Cu
MIRI
12-18m, 1.14 g/t Au, 0.25% Cu
18-87m, 0.55 g/t Au, 0.03% Cu LRM01 EAST Alteration
129-140m, 0.60 g/t Au, 0.02% Cu Zone
GOLD ZONE
BATIL
2005 Percussion Drillhole LRM-02
3-75m, barren alt. porphyry.
75-131m, barren doleritic intrusive.
0 1 2km
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Details of the drillholes are set out in the table below.

Hole No.	North	East	R.L.	Azimuth	Angle	Total Depth
	(m)	(m)	(m)	(degrees)	(degrees)	(m)
LRMDDH - 001	3 222 046	480 621	2 049	090.7°	-62°	507.2
LRMDDH - 002	3 222 046	480 616	2 049	272.7°	-62°	538.4
LRMDDH - 003	3 222 471	480 706	2 073	086.7°	-60°	550.6
LRMDDH - 004	3 222 469	480 704	2 073	263.7°	-61°	392.2
LRMDDH - 005	3 222 422	480 449	2 063	268.7°	-61.5°	296.4

Notes: Location measured by GPS estimated accuracy ± 5 m horizontal, ± 20m vertical. Co-ordinates are UTM, WGS84 Azimuth is related to True North (magnetic variation 1.265° East)

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Lake Resources N.L.

Following geological logging and photographing of the drill core, selected intervals were sampled at 2 m intervals and forwarded to the ALS laboratory in Brisbane, Australia for geochemical analysis for a range of elements including precious and base metals.

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 g/t 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. It is believed that the southern extension of this breccia also hosts the gold mineralisation intersected in drillhole LRM-001.

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250m (approx.)
LRMDDH003 LRMDDH004
LRMDDH005
LRMDDH001 LRMDDH002
N
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Drillhole site locations.

Individual drillhole results are summarized below:

! LRMDDH-001 intersected zones of vent breccias, altered breccias and barren feldspar porphyry. Gold mineralization is present in altered breccia from 334 to 340m (6m x 0.30g/t Au), 364 to 376m (12m x 0.55g/t Au) and 506 to 507.3m (end of hole) (1.3m x 0.77 g/t Au).
! LRMDDH-002 intersected altered breccias and intrusive porphyry. Porphyry-type copper-gold mineralization is present in potassicaltered porphyry from 392 to 520 m (128 m x 0.14%Cu and 0.19g/t Au). Anomalous molybdenum is present in the upper part of the porphyry mineralization and also in the overlying breccias.
! LRMDDH-003 intersected mainly altered breccias with lesser vent breccia and minor porphyry. Gold is present in altered breccia from 136 to 158m (22m x 0.41g/t Au).
! LRMDDH-004 intersected altered mainly altered breccias. Gold is present in altered breccia from 242 to 258m (16m x 0.50g/t Au) and 320 to 324m (4m x 0.16 g/t Au).
! LRMDDH-005 intersected altered breccias from top to bottom. Supergene copper is present from 80 to 108m (28m x 0.26% Cu), including 8m x 0.56% Cu from 80 to 88m. Minor gold is present in the supergene copper zone from 86 to 92m (6m x 0.19 g/t Au) and further down-hole at 204 to 216m (12m x 0.32g/t Au) and 256 to 268m (12m x 0.15 g/t Au).

(Cutoff grades used for the above intersections are 0.10 g/t Au and 0.1% Cu).

ANNUAL REPORT 2011

Work Completed in 2010-2011

During the December 2010 quarter, a non-renounceable rights issue was offered to existing shareholders in the Company for up to 35 161 513 shares at $0.05 (5 cents) per share. Shareholders applied for a total of 9 091 125 shares, leaving a shortfall of 26 070 388 shares. As reported to the ASX on 7 March, 2011, the shortfall was placed during the March quarter with parties unrelated to the directors or any of their associates. In total, the rights issue raised a total of $1 758 756 and the issued capital of the company is 70 236 026 shares.

Following the capital raising, exploration activities resumed in the second quarter of 2011 in preparation for planned drilling later in the second half of 2011. At Koh-i-Sultan, geological reconnaissance was undertaken to evaluate possible drill-sites. Repairs were made to previous access tracks and construction of new tracks to access planned drill sites commenced. Repairs and upgrades to the Company's exploration base at Nok Kundi were carried out.

Future Program

At Koh-i-Sultan planned work, including 4 000 m of reverse circulation percussion drilling, will focus on delineating the extent and distribution of mineralization at priority targets including:

! the gold zone discovered in 2005 percussion drillhole LRM-01.
! the main Miri West breccia complex, where anomalous levels of gold, silver, arsenic, bismuth and tellurium have been intersected in drillholes LRMDDH-001 – 5.
! the porphyry copper-gold mineralization discovered in drillhole LRMDDH002.
! other alteration/breccia zones with anomalous surface geochemistry at Batil and Miri East.

At Amalaf , bedrock sample drilling is planned to test for porphyry-type copper mineralisation in a 3.5 km long area in Sulphide Valley where one of two holes previously drilled by Lake (LRJJ-02), intersected significant low-grade copper-molybdenum over the length of the hole with minor gold (12 -120 m, 108 m @ 0.17%Cu & 94 ppm Mo). A program of shallow reverse circulation percussion drilling totalling approximately 1 000 m is planned for the fourth quarter of 2011.

At Dasht-i-Gauran , work will focus on a possible westward extension of copper mineralisation reported by TCC from drilling at its Sor Baroot Prospect.

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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.

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Lake Resources N.L.
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Glossary of Terms

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PAKISTAN
AUSTRALIA
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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.

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Lake Resources N.L.

3-7 Maud Street Newstead QLD 4006 GPO Box 1239 Brisbane 4001 Australia Telephone: +61 7 3252 0255 Facsimile:I +61 7 3257 2122 Email: [email protected]

www.lakeresources.com.au

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LAKE RESOURCES N.L. Annual Report 2011

65240_rns_2011-10-25_5a40ddff-4896-4448-a458-0c573c5fab26.pdf

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