Ann: FY24 Full Year Results, page-27

"Which year is the greater anomaly? Hmmmm"

Valid question. Probably both, I'd say.

Trouble is, with limited historical precedent it's difficult to know what a "normal" year looks like.

But that's a moot point at the minute, because the more pressing issue is the rate that the company is burning through its capital resources:

Looking at the second-half cash flows, Net Receipts less Payments of Leases was -$88m (and that's before payments for exploration & evaluation, capex, taxes etc), and the lithium price was probably close to 30% higher in the half than it is currently, so that number is going to get a lot more negative at the prevailing lithium price.

As a result, Net Cash fell by $500m in over the past 6 months, to be at $1.07bn at 30 June 2024 balance date (certain to be below $1.0bn today). It was a whopping $2.9bn at 30 June 2023. Such is the extent of the capital drawdown.

Hard to believe that this company went from generating hundreds of millions of dollars in surplus capital a mere 12 months ago, to facing a capital adequacy issue today.

Despite securing additional borrowings capacity, the odds on an equity capital raising went from zero 12 months ago, to a number that is now a non-trivial probability above zero at some point. And the longer the lithium price remains where it is, the higher that probability goes.

Looking at the current cash flows, I don't think there will be much incentive for short-sellers to cover their positions; the opposite probably. I strongly suspect they'll wait for a capital raising to cover.

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