ASCENDANT: The Kathleen Valley Story Part 1, page-34

Elephant in the room - funding…

As it was explained - numerous times - the expansion to 4M was under review with the 3M plant proceeding as planned.

What has actually happened is that much of the 4M expansion has already been built out and incorporated into the existing plant architecture. Because err… reasons.

As explained by management and as presented to the banks/loan syndicate (many times) - any expansion was planned to coincide with Lithium price recovery.

Now - let’s just say the lithium winter is a bad one (which is looking likely) - but now you’ve already “expanded” much of your facility…

Less demand, less sales/revenue but your Opex structure is
running off a 4M rather than 3M plant. You can’t unbuild it or turn it off - it’s always going to be high. Any advantage previously from being a low cost producer has just been blown out of the water. You are now a high cost producer ramping up into in a low demand environment.

DYOR IMO