I've been observing the LTR trade pattern. Each early morning,...

I've been observing the LTR trade pattern.

Each early morning, big long holders try to support the price, jack it up to entice new buyers. The early buyers have not done well, as the stock price retreats in the afternoon as shorters swamp the sell especially towards the end of the trading day.

From my observation, there's distribution happening and a committed short determined to see the price going lower. As they say, the trend is your friend, and right now, the downward trend is the shorter's friend.

LTR can't drawdown on their $550mil debt facility, the drawdown is needed in Q3 which means next few months, until the following conditions are met.

* Unfortunately for LTR, the lithium spot price has not moved to provide the confidence that the Base Case Financial Model can be sufficiently robust enough....and you'd also wonder if the bankers will have cold feet? We should know very soon. If not, it would be a great opportunity for Gina to increase her stake cheaply via a cheaper CR to include also instos and retailers.

Customary for a debt facility of this nature, and also including:
• demonstrating compliance with customary tests;
• providing a Base Case Financial Model (“BCFM” based off, amongst other things, independent price forecasts and management forecasts of production, capital and operating costs, and which demonstrates compliance with financial ratios; and
• entry into key project tripartite agreements.

And if you were instos, you have to contemplate, given that LTR is no longer a mandatory hold after being removed from ASX100, if it would be better to reduce their position now before being subjected to another CR in the event that the bankers pull out.

If the bankers are not satisfied with the BCFM to be in compliance with ratios, they may require LTR to undertake a CR with reduced amount of syndicated loan e.g $550m loan could be reduced to $200-300m with balance to be procured via a discounted CR.

You see this condition that the loan be repaid within a year of drawdown, suggest that the banks are not all that convinced given the state of lithium pricing.
No scheduled repayments and interest capitalised during the term of the debt facility, with bullet payment on maturity on 31 October 2025

The risk of LTR is the funding uncertainty which does not yet preclude the prospect of a discounted CR and secondly even with loan secured, it remains open to a larger risk with loans compared against equity funding should SC6 price falls below $1000 ahead.