Cash flow in June qtr was insufficient to even meet interest commitments. The company actually has less cash at the end of June ($31 mill) than they did at end of Dec 2014. ($71 mill) The other $21 mill shown by LYC at end of June is the lenders interest. Things were so precarious, the lenders had to agree to Lynas having access to interest money to stay solvent. So in the last six months Lynas have burned through another $40 mill in cash.
There is not a shadow of doubt that they will get a going concern statement again. Unless, in the unlikely event both lenders give the company a letter of support that they will not call in the loan for 12 months of the accounts being signed. And the chance of that happening is between none and zero.
Auditors are not forward looking, they sign off on history.
LYC Price at posting:
3.8¢ Sentiment: None Disclosure: Held
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