I think the main problem with all Lithium explorers is at this price point, most are marginal or lower than an incentive price,
When you do the numbers at the current lithium spot price, ASN would have a negative NPV and an IRR of 6% (when you factor in the loan repayments)
That is if we use the DFS model, ASN might make US$40 mill NPAT in 2027/2028 for US$500 mill CAPEX where 45% of the EBIT is chewed up in loan repayments.
Like all the others that are going to the banks, this will be a tough ask, and you can see the SP declines across all lithium stocks.
You can see why some projects are now being delayed/mothballed/C and M/sold etc etc
Money has been coming out of the Lithium stocks and into AI. Unless the Lithium prices reverse, which bears say will not happen for 3 years, junior lithium explorers may struggle, ASN is no different and will face the same headwinds as the rest
ASN Price at posting:
10.0¢ Sentiment: Hold Disclosure: Held
