PLS chart, page-22240

Report on MIn lithium
Electric woes
Falling demand for electric vehicles has coincidedwith rising lithium output. Worse, lower priceshaven’t cut global output.Production from China and Africa hasn’t budged. Wethink the low grades produced from both sourcesare unprofitable and will ultimately exit the market.Prices are now deep into the global cost curve.That doesn’t help the situation today, which is whyMinRes’s share price has fallen so far so fast.The partial sale of a haul road and closure ofYilgarn iron ore output - which was low marginand required significant fresh capital - show howdetermined management is to avoid a capital raise.We note that no debt matures before 2027 andinterest rates are fixed on drawn debt.If lithium prices fall enough to eliminate productionmargins, expect MinRes to shut its mines.This isn’t a business that has tolerated losing money; it shutoutput in the last downturn, and doing so again ispossible. It won’t please the market, but it should beenough to avoid a capital raise.