USD 125 million debt due in less than 12 months - we can't pay this?

Folks, it looks like we're screwed here. Management needs to be moving on this ASAP.

Our existing USD 125 million debt facility falls due in August 2020.

I draw your attention to the latest quarterly cashflow statement;

"Altura has a senior secured loan note facility fully drawn to the facility limit of US$125 million. The interest rate is 14% p.a. for the first 18 months of the loan and 15% pa thereafter. The facility has been restated to reflect the closing AUD/USD foreign exchange rate at 30 June 2019 of 0.7013", which is shown in the cashflow statement as am amount of A$ 178.24 million.

I note that the current AUD/USD exchange rate is around 0.6775, this increases the amount we owe by A$ 6.25 million to A$184.5 million, as the AUD grinds lower this only worsens.

As per the latest quarterly cash flow report we have the first actual interest payment due of A$15.391 million due this quarter (previous interest payments of A$20.1 million have been capitalised and remain to be paid).

We have a current daily interest cost of A$ 75,000.......

Why does this matter I hear you ask?

Well let me tell you.....we are now in a very different environment for debt finance and the lithium price is at a very different level relative to July 2017 when the facility was first put in place. Adding to our pain is that we have a 6-month lag for pricing with Ganfeng, its also likely that we have the same lag in place for all supply agreements as this appears to be industry standard (see PLS.ASX). Hence we need lithium prices to have improved materially for at least 9-months for us to begin to see any benefit in realised pricing here.....BUT, our A$184.5 million loan is fully due in less than 12-months.... the squeeze has commenced....

A40 has shown us that contracted floor prices are essentially worthless, should the lithium price continue to decline as expected, we will be in a world of hurt come August 2020. Based on cashflow analysis by other users, we will need to raise further equity on a very regular basis just to keep management paid and our daily interest bill of A$75,000 in check.......we have so much to do with so little....

If the pumpers want to argue that AJM is far larger than A40 and in a better position to negotiate, we only have to look at BHP's & RIO's experiences in iron ore in Q4 2008 - their contracted customers simply ignored what had been agreed and left the biggest resource companies on the planet holding inventory at Port Hedland - with no other buyers in sight.... we are likely to be in the same boat here, or worse, as China does 100% of all hard rock processing for spodumene.

As we continue to dilute, the reality is that there is no floor to our share price...... basic math and analysis shows us that the current situation and looming debt repayment are just not sustainable or achievable....

I have sold all on this basis..... the dream is over.