Pulse Markets Webinar - Justyn Peters, page-29

Interesting thoughts there J L, but i think youre looking at the numbers/situation a little wrong here. Not so miuch the values themselves, but how they are interacting. So i'll respond along a few lines of reasoning.

Firstly: Insolvency by Q3 w/o CR.
I strongly disagree with, and think there is a flaw with your logic to even bring this up. If LCK anticipated being in a position where it was CR or insolvency.. they would simply delay Stage 1 works, and the Stage 2 Scoping costs (approx $45m which you refered to) until more secure funding arrangements were determined. NO company would accelerate themselves into insolvency within 6 months by choosing to commit to 10s of Millions of project spending. If money was tight, there would be cutbacks in both stage 1 and 2 commercialisation. So the way i see it, there is no conceivable reason to even consider or suggest that LCK's solvency was predicated upon an immediate CR. Absolute worst case, they push back both S1 and 2 plans and use the existing facility for operating costs.. Which at $2.5m p/qtr having $7.6m on hand and $12mil still accessible in the existing facility they have over 7Qtrs of funding available (presuming project pushback).

secondly: Stage 2 LCEP scoping costs.
Not worth worrying WRT funding until Results of DLEC HOA are announced. They've stated that DLEC with be responsible for DFS, FEED and turnkey plant, while also arranging majority funding... it would seem the 1.5-2% would be part of that agreement and not an expense which would be negotiated independant of the primary deal.

Thirdly: your suggestion in the previous post vis-a-vis regarding setup for CR.
I see no strategic reason or benefit that the BoD would ever pursue a bad faith HoA with DLEC in order to prop share price for CR... and there are multiple reasons why this would be a terrible Course of action.
-During HOA they have exclusivity with DLEC, so they effectively would be wasting 1-2 months of any progress with alternate viable candidates
-LCK being perceived as using prospective partners as a stocking horse to prop SP for CR would likely impact possibilty of good faith negotiations with prospective future partners
-SP would be adversely impacted once market reacts to propped SP and CR, BoD would take every action necessesary to avoid the perception or opinion that such a situation could occur.
-LCK has no fiscal dependency to orchestrate a SP prop and CR. as mentioned above, by pushing back S1 progress have 7 Qtrs of funding (if accessing T2/3 of existing facility)
-LCK BoD has in my opinion always communicated honestly and in good faith with SHs, i see no reason they would seek to "set up" SHs now

Fourth:
I think we ought to watch this space regarding Stage 1 commercialisation expenses/plans and timelines. The main effort is obviously the overall LCEP and if a 5MW plant has to take the back seat to get a billion dollar agreement done, it will.


so here's my take on things.
LCK BoD know the significance of getting a deal like this done. They know the adverse impact of hyping SHs and having it fall over.. from my opinion watching recent interviews, both gentlemen appear to be very confident in the maturity of negotiations and are happy its progressing towards a mutually beneficial agreement. I am very confident that if things looked to not be going well that they would start shaping the market's expectations so as to not drop a dead cat out of the blue.
I see that DLEC has immense opportunity through this deal, entering the AS market by delivering an Australia first, multi billion dollar facility sets conditions for incredible follow on opportunity, so i think they're also highly motivated to close the deal.

I respect the fact that you're possibly watching for an entry, but it seems like you may also be viewing things not just objectively, but subjectively with a negative bias. I cant fathom how you could work things towards insolvency within months, to me that's some serious intellectual acrobatics to make that reach, and in context just doesn't fit. That said. some impatient SHs expecting an announcement this week may continue to sell and drive down SP over the next 2-3 weeks, i think its quite likely we hit teens again.. however would expect a run up to begin sometime in Wk 3 of June.
I wasnt surprised at all by the extension, just need to sit tight and see how it plays out.