LTR (ASX) Ann: Project and Funding Update

Originally posted by cefh17: ↑

Notes from conference call (on my phone at midnight bear with me!)
Project on track
project on budget
Commissioning starting March 24
Spot is ~875
Banking group is 'very supportive', all 8 lenders still engaging with the smaller funding package
$515m cash end of Dec, sufficient funds to complete construction

Questions:
(Goldman) confirm relating to Ford deal: "deal stays on foot"
(Goldman) what is Available debt from syndicate? Uncertainty about funding package: 760 takes off ford debt so fresh debt is 460, aiming to ascertain what resized debt is will be lower than 460. Price forecast used by syndicate uses WoodMac forecast is 950 spod in 25/26. TO says that is a very low price
(Goldman) Clarify project changes: the Capital brought forward for development work to bring 4mtpa forward, question whether it's prudent to accelerate it and the funding required for acceleration. Capital cost of upgrade was $70mAud, $36m AUD for 4mpta acceleration.
(City) any discussions with OT partners for funding?: now commence discussions with banks initially to finalise debt facility, customer discussions ongoing with downstream but may go about debt also. Will also discuss with major shareholders
(City) any surprises in development? 290m already done underground
(UBS) what elements of $788m can get reduced?: use of funds was refinancing ford (gone-460), cost overruns (110m), cap reserve (150m) balance working capital (this is the figure being reviewed). The $350m buffer included the $110m structure, would want a buffer
(UBS) was it just 1 independent forecaster the banks were using? Banks felt comfortable with WoodMac, there was optionality to use another forecaster
(JPM) how much is left to spend?: 515 is cash in bank, sufficient to complete construction.
(JPM) is there a gap if 150 is needed for ramp up buffer?: work needed to revise what amt of capital is needed now that 4mtpa is off the table. 460 was needed back then, 460 is being reduced
(JPM) mining cost update?: what was said in Oct $73A/tom cash cost, still there now. AISC will be reviewed
(JPM) 2.5mtpa?: No, 3!
(JPM) sound like you're more bullish than WoodMac, if you weren't inhibited by that would you be inhibited by expansion?: feel we are stronger than the forecaster, banks require it and so LTR have to live by it and that's the reality
(John Bishop) Assessing work cap req what works going into ramp up assumptions, relying just on DFS rates? Stress testing?: our assumptions matured substantially, own team working on it since publishing, very conservative view on recoveries and strong in that regard.
("") Have revised estimates been given to market?: No, going to closer to production, 78% recovery should be still held onto, question is when it can be hit
(Sam C.) Cash requirements, 515 to production, 150 working capital, when on base case will ops be cash flow positive?: view Q3 was from WoodMac prior to the latest price slump, no date yet as they still have to assess based on capital requirement changes
(Barron Joey) debt facility clarification, was it all 8 banks or 1?: all 8 highly supportive
("") Feels like this has been dumped on you?: it was triggered by the WoodMac price forecast, banks advised late Friday evening that they couldn't extend the commitment later
("") Is ford an option?: will talk with customers, ford debt facility would require further offtake or something else, will consider it
("") Ramp up 12mo?: $650A cost base is AVG over ten year period, higher initially of course
("") Sustaining capital?: will be reviewed after changes
(Bell potter) banking syndicate?: 8 banks are 4 domestic, efa, clean energy, softgen and HSBC.
("") What's the difference between WoodMac and internal estimates: WoodMac expecting supply from Africa and lepidolite, LTR view is pricing signals means some of supply will not come online
("") Off takers any changes?: 3mpta ramp up and firt tonnes is still a target and still holds

TO: were targeting meaningful change in overall debt facility. Commodity cycle is being experienced, doesn't wanna be flat footed for when the market turns, what levers we can and will pull when the market turns strongly. Potentially seeing an overcorrection, may bring 4mpta if that turns to be the case

Expand

awesome summary of the teleconference
thank you !

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(20min delay)
Last 97.8¢		Change 0.023(2.36%)		Mkt cap ! $2.352B

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97.5¢	98.5¢	96.5¢	$4.708M	4.821M

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