Here to discuss LTR, but since you raised it. This is no longer a high SC6 price environment, it’s now low cost which focusses financiers and investors on producers and developers with low costs of production. Just my guess, but I’d place a large sum of money on LTR failing to produce for less than $1k/t in its first two quarters.
Having said this, it’s Pretty hard to get a specific gauge on LTR because the company hasn’t released any cost guidance, or the results of the independent consultants review of the revised BCFM. The DFS cost figure is now worthless for multiple reasons.
If the BCFM isn’t to the liking of the financiers, the following equity raise will be biblical in terms of the total destruction of the share price here - outcome of BCFM is due by end of July. For the record, I hope the financing is successful because the alternative would likely be devastating for most of the sector.
Another holder of LTR who I respect
@SugeKnight indicated that LTR management had told him that they would announce the results of the 4MTPA expansion to the market by the end of June. Given end of June has now come and gone and it’s still radio silence - my money is on there being fairly large issues with what they will do.
They’ve gone too far down the path to simply call C&M now, but there’s a decent bet they will be burning large amounts of cash as soon as they produce (and this is before we consider the risk of any major stuff ups with ramp up).
The only questions left now are just how big will the loss on production tonnes be, will the cash balance be enough to cover the company until SC6 prices rise or until refinancing takes place next year (assuming finance is secured).
The increasing size of the short position in the BEOT is highly suggestive that some folks may believe the financing has zero chance at these price levels. If so, shorts will win big league and they’ll have an equity raise to close their positions into. Any raise would be minimum 10% discount and as high as 25%, given management will be desperate and will have zero other options. In theory this could mean a raise down near ~75 cents.
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