Ann: Production Update, page-56

This announcement was a bit of a surprise and way out of left field.
I understand I will get bashed for saying this, but it is the last thing AJM needed right now.
Higher production costs and unexpected maintenance. Lower shipments than forecast, which is particularly concerning when it appears that Ganfeng has been the likely major customer this quarter and will be reimbursed the 30% from the prepayment. Also given Ganfeng's Mt Marion SC6 pricing, I can only assume the price for AJM will be at the contractual floor.
I cannot see how they will meet the February interest payment.
The shortfall from the rights issue is unlikely to be placed.
Nemaska has just fallen over after being unable to secure a financing package. This is particularly relevant considering it provides a barometer for the appetite of financing distressed debt in the lithium sector.
Given today's update I would have to question whether the company is solvent.
I think best case scenario right now for holders would be for AJM to negotiate a debt for equity swap with current note holders at perhaps a 75% dilution. This may sound excessive but take into account removing the debt would align the market cap more closely with enterprise value.
I genuinely wish you all a Merry Christmas.