Lithium Related Media Articles, page-28437

You say apples to apples but that is so difficult when comparing operations.

Sigma had a bit of a reputation for overstating revenues and then getting hit by massive price adjustments upon delivery. Quite entertaining if you want to go back through their reports. They massage like the best of them and as an aside I have no doubt Tony O has a poster of Ana on his wall for motivation. What LTR could accomplish if Ana were running things

Meanwhile LTR have pulled every accounting lever they could - particularly last quarterly. Q3 LTR delayed substantial sustaining capex (those pesky mills eventually need relining and belts will tear when mesh, rods and bolts from UG travels... Was another OP cutback due or was it a tailings dam lift? Will be quite an achievement to bump it all into FY26 but wouldn't surprise me. They are running lean and mean. LTR also shifted inventories. I've gone into detail on that previously, but how you have an objectively far worse stockpile of ROM ore / osp and attribute an increase in value of $8.5m I don't know. Not only that, they celebrated it as a strategic investment - now that was moxie. It sure helped with Opex and we were in the realm of unaudited non-GAAP numbers.

So serious question to others out there. How do you compare apples to apples? So maybe, just maybe SMM are on the right track to occasionally post a cost curve comparison that is just opex.

In accounting terms for when it counts, LTR only declared UG commercial in May with 1st stoping? Correct me if I'm wrong. In fairness they did state their Opex and AISC in the last quarterly treated it as though that was not the case but it still remained unclear how much was capitalised - what was the split? The annual report will be the best guide.

LTR Q3FY25 figures were so far under guidance that it was plain as day. IIRC in the last earnings call, a highly respected analyst called them on it and the response was a somewhat infamous, don't rely on your skid maths. The latter part of the LTR reply mentioned the inventory movements. Not going to break down what happened there because if you don't understand you won't understand with further details. Suffice to say, ~$8.5m of Opex was shifted into Capex and out of the presentation headline figures.

What concerns me at this point is LTR drifting away from their own self declared status as the most transparent. IMO it began with the quarterly where LTR were asked in the earnings call to provide crucial, standard data (IIRC feed grade) and due to an awkward phone delay, TO wrongly laughed it off thinking peers don't provide that info.

So will LTR trend towards the standard practice we see from the likes of Sigma and play to the audience or will they return to supposed core values? If I were LTR I'd certainly at least start including freight costs if they want to keep comapring CIF received pricing to FOB AISC.

Ultimately what you get are charts like the SMM one being discussed (I actually quite like it BTW because it strips away some of the BS + variances and allows investors to fill in the blanks without much work). A chart that is used to positively pump LTR while ignoring the lower Sigma cost position. If that isn't cherry picking then I don't know what is.

Use the chart or don't use it. Personally if I felt it was particularly innacurate I wouldn't.

I reiterate, it would be nice to see LTR return to their stated core value of transparancy. Maybe then apples to apples would be more possible. For the time being it appears to me that LTR massage claimed Opex - FOB and AISC along with other Capex as well as cashflow timing of payments, among the most crafty in the industry.

I think I've been consistently clear I believe that LTR investor relations are second to none.

In light of all that, good on SMM for sharing that chart in the webinar. I was getting tired of explaining that other cost curve charts that were fixed points in time were useless when it came to anything unintegrated because they don't change with lower SC costs etc.

Full disclosure, I like SMM. The team there are IMO the most accurate in the industry and most welcoming. Give them a call yourselves. For those that say they are China based so manipulating or posting propoganda, why is it that Fastmarkets, Platts, Benchmark (BMI) pricing tracks so closely to SMM?

If you do contact them, try [email protected] +86 151 6315 1871 (WhatsApp), [moderators that contact info is publicly listed by SMM as a primary point of contact] ask about their methodology and why their pricing shifts in line with LTR shipping departures. It may surprise you, but like all price agencies they pick up the phone and ask, what are you shipping, or we've noticed you just shipped, and what was the price? They then cross check with buyers to substantiate. In very basic terms that is how all the price agencies operate. SMM just so happen to have the best, IMO, connects with converters and traders within China and as all should know, very little Spodumene conversion happens anywhere else.

There is no great conspiracy amongst price agencies to suppress. They just report what is happening and funnily enough, it tends to track with what companies ultimately announce.

Do you know that as a fact? Substantiate please.