Ann: Funding Facility Extension and Cleansing Notice, page-33

Extract from 24 September story. https://www.fnarena.com/index.php/2019/09/24/behind-the-lithium-market-meltdown

Behind The Lithium Market MeltdownCommodities | Sep 24 2019By Tim Boreham, Editor, The New Criterion.Behind the lithium market meltdown.

The stronger-for-longer lithium story is not exactly panning out as such, with a global oversupply emerging and the upbeat blue sky stories supplanted by tales of woe from the emerging producers. The same thing’s happening with that other wonder battery metal, graphite.
Suddenly a litany of woes has enveloped the lithium sector, although arguably the downturn has been years in the making.
Last month Alita Resources ((A40)) entered voluntary administration just months after getting its Bald Hill lithium concentrate plant in WA into production. Alita’s problem – meeting banking covenants – shows there are no new corporate ways of getting into trouble other than having too much debt and too little cash flow.
Pilbara Minerals ((PLS)) has tapered back expansion plans for its Pilgangoora project, while Galaxy Resources ((GXY)) cut the value of its Mt Cattlin mine by $178 million. Even the privately owned Greenbushes, the world’s biggest mine and previously Australia’s only lithium producer – has curtailed expansion plans.Meanwhile, grateful Kidman Resources ((KDR)) holders voted overwhelmingly in favour of Wesfarmers’ $776m takeover offer.
That’s not to say the battery material theme underlying the surge of interest in the metal is invalid.

But not all lithium material is the same and not all the projects are the same, so now’s the time for investors to take a discerning stance.

“We see many analysts compare companies by resource size and grade,’’ says Pan Asia Metals chief Paul Lock. “In reality these comparisons often mean little when one considers geology, geography, political risk, policy settings and the location of end markets.

”The only rule that counts is being a relatively low cost producer, because even a decent 100 million tonne resource means little if you can’t extract it economically!!!!! Me (Kachi-Lilac??)

“Once a discovery has been made then the barriers to entry are low,” he says. “As a result (hard rock) spodumene concentrate has become a commodity.

”Lock attributes the price malaise to oversupply of spodumene concentrates from Australian suppliers, China’s decision to cut electric vehicle (EV) subsidies and bottlenecks in conversion capacity.

On the flipside, demand for lithium ion batteries has not abated, although growth has not met expert forecasts.

CATL, China’s biggest lithium ion battery maker, reported a 166% surge in half year revenue, while Chinese EV sales overall have grown 81% in the year to June. Lithium Project near Phuket in southern Thailand.As well as being South East Asia’s only lithium project, Reung Led by Volkswagen, the European car makers have set ambitious targets for electric car production –

but the trouble is the scarcity of locally produced battery-grade lithium.

This emphasizes how vital the PFS and the results from the Lilac tests are, even those bulk samples that will be done on site at Lilac's plant in California, which, we can envisage from what's in that last ann, are not to be far off.

Kachi is an enormous, BRINE, asset, producing, from what we see, battery quality lithium at the low end of the cost structure.

But, we have to wait for those outcomes and, hopefully, no more self inflicted wounds, because, despite what is happening in the "lithium" sector,it's far from being relevant to LKE. BUT, LKE decisions are most certainly contributing to the SP. Undoubtedly!!!