This was the original package:
On 19 October 2023, the Company announced that it had signed a commitment letter and credit approved term sheet with a syndicate of lenders for a A$760 million debt funding package, subject to the parties agreeing formal documentation and other customary conditions precedent.1 The finalisation of the debt package has been impacted by recent reductions in the independent forecast pricing for spodumene upon which the lenders' credit approvals were based.2 Accordingly, the Company has now commenced discussions on a revised, smaller debt facility that will reflect the Project Review. As a result, the commitment letter announced on 19 October 2023 will terminate. The Company has been advised by lenders within the syndicate that they remain highly supportive of the Project.
Liontown has approximately $515 million cash at bank at 31 December 2023, having now fully drawn the A$300 million project funding package secured from Ford. This is expected to fund construction activities required for first production in the middle of 2024. The Company expects to be able to provide a funding update by the end of the March 2024 quarter.
Then, this was released during March:
Liontown Resources Limited (ASX : LTR) (Liontown or the Company) is pleased to announce that it has entered into a A$550 million1 debt facility agreement (Debt Facility) which is designed to ensure the Company's Kathleen Valley Lithium Project (Kathleen Valley or the Project) is funded through first production and ramp-up to the 3Mtpa base case2.
This was released in July:
• Five-year US$250 million (A$379 million1) Convertible Notes secured at a conversion price of A$1.80 per share2 and a coupon equal to a reference rate of SOFR.3 • Total cash balance increased to approximately A$501 million4, providing balance sheet strength to fund Kathleen Valley ramp-up to 3Mtpa steady state production.5 • Funding will progress early enabling works in the underground mine to preserve the 4Mtpa expansion option on a 2027 timeframe and to support 3Mtpa production. Liontown continues optimisation studies for both the mine and the processing plant as part of its review of the 4Mtpa expansion case.6
The initial package was $760M, then changed to $550M, and then changed to $379M (convertible notes).
Note, they originally said $760M funding was expected to fund construction activities Required for First Production. Then, they said $550M was needed through first production.
But of course, they changed that to $379M in July. So massive cuts from initial estimates to the last estimate: cuts from $760M down to $379M.
Really cut right to the bone, not much fat left.
And given current Li prices have more than half since Oct 2023 (now sitting at USD $780), the question I would be asking is, can the company make money (cashflow positive)?
And if not, will it be doing a CR?
You can see why shorters are attacking this!!!
I don't doubt LTR has a big resource. But for me, I will wait and review the quarterly.
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